What do you think?
Rate this book
Shocks, Crises, and False Alarms: How to Assess True Macroeconomic Risk
An essential new guide to navigating the turbulent macroeconomic landscape as you form your strategy. War. Inflation. Recession. Pandemic. The semblance of macroeconomic stability is long gone, with the volatility of recent years challenging leaders and companies to preserve and create value as they navigate the business landscape. When turmoil hits, executives and investors face notoriously unreliable macroeconomic forecasts, whipsawing data, and contradictory opinions. Are disruptions transient and ephemeral—or permanent and structural? False alarms are costly traps, but so are true structural changes that go undetected. Leaders must also assess the doom-laden public macroeconomic discourse, which habitually presents worst-case scenarios as foregone conclusions. How can executives avoid these traps and make better strategic decisions? In this incisive, perspective-shifting book, BCG Global Chief Economist Philipp Carlsson-Szlezak and Senior Economist Paul Swartz provide a fresh and accessible way to analyze and understand the macroeconomy—what they call "regime analysis"—that pushes beyond conventional model-based prediction to emphasize structural context and judgment. Focusing on what it takes for macroeconomic regimes to break, they apply their approach to key risks in the real economy, financial structures, and geopolitical arrangements to help senior executives and investors assess the true risks of their economic context and to build their capacity to respond to changing conditions more effectively. With rational optimism rather than gloom, Shocks, Crises, and False Alarms speaks to the key macro debates and controversies that shape our time, and it empowers leaders with the analytical skills to assess and judge macroeconomic risks for themselves, with a new way of thinking that will continue to apply as risks change over time.
320 pages, Hardcover
Published July 9, 2024
Ratings & Reviews
Friends & Following
Create a free account to discover what your friends think of this book!
Community Reviews
Displaying 1 - 24 of 24 reviews
January 8, 2025
key takeaways:
1. don't have a master-model mentality - use scenario forecasting rather than point forecasts.
2. better to have some optimism. don't rely on headlines which will be pessimistic more often than not
3. identify drivers and dynamics. History is important but isn't everything. Context matters.
4. Will always be impossible to predict small details (e.g. Maybe you'll predict Covid = Supply shocks, but you won't be able to predict how much each country gives out in stimulus package or what trade policies they might enact.)
5. Not all capital stock is equal. Structures (e.g. bridges, airports) depreciate slowly, adding to the capital stock for multiple decades, but today's investments are generally in IP / software, which depreciates much quicker. Investment must also overcome depreciation and need to keep the existing capital stock steady.
6. Productivity booms take time. E.g. 1990s ICT boom was 30 years in the making --> uplift for about 10 years (lifting by 100 bps), then there was the slump. Gravity of growth (diminishing returns)
7. Need to separate Political Willingness vs Political Ability (e.g. Greece might be Politically Willing but Politically Unable bc of wider Eurozone politics)
8. On debt levels - more of a problem if growth < rates. Debt risk is more about shifts in burdens, constraints, and costs than about sudden and dramatic collapse. Debt levels provides little information.
1. don't have a master-model mentality - use scenario forecasting rather than point forecasts.
2. better to have some optimism. don't rely on headlines which will be pessimistic more often than not
3. identify drivers and dynamics. History is important but isn't everything. Context matters.
4. Will always be impossible to predict small details (e.g. Maybe you'll predict Covid = Supply shocks, but you won't be able to predict how much each country gives out in stimulus package or what trade policies they might enact.)
5. Not all capital stock is equal. Structures (e.g. bridges, airports) depreciate slowly, adding to the capital stock for multiple decades, but today's investments are generally in IP / software, which depreciates much quicker. Investment must also overcome depreciation and need to keep the existing capital stock steady.
6. Productivity booms take time. E.g. 1990s ICT boom was 30 years in the making --> uplift for about 10 years (lifting by 100 bps), then there was the slump. Gravity of growth (diminishing returns)
7. Need to separate Political Willingness vs Political Ability (e.g. Greece might be Politically Willing but Politically Unable bc of wider Eurozone politics)
8. On debt levels - more of a problem if growth < rates. Debt risk is more about shifts in burdens, constraints, and costs than about sudden and dramatic collapse. Debt levels provides little information.
July 13, 2024
An engrossing, rational, well researched and argued account around macro economics. I found a lot of the information very useful as a guide to investing and deciphering the macro landscape and the implications of policy responses etc.
December 25, 2024
Well written, concise yet insightful perspective on macro for practitioners.
July 13, 2026
Shocks, Crises and False Alarms: How to assess true economic risk, 2024 by Philipp
Carlsson-Slezak and Paul Swartz. Harvard Business Review Press
“If it bleeds it reads”. The book Shocks, Crises and False Alarms is a classic explanation for
this quote. The book begins with the concept of Good Macro and how the concept is
challenged over the years due to a series of shocks and unforeseen risks. But the question is
Did an economy of global norms, smooth access to different economies and favorable
international relations really exist or was it an unattainable ideal. Followed by this discussion,
is Chapter 2, delving further into ways to deal with macro-economic risks. The rest 19
chapters are divided into three parts. Each part deals with a different level of macro-economic
risks.
The main attraction is the complex interplay between the economy and its media portrayal. It
makes me think why all the coverage in the news may be audio or video is focused more on
the downside. The authors give recent examples of the False Alarms such as, Covid 19 being
compared to the financial crisis of 2008 or the Rising US Federal interest rate having severe
effect on the Emerging Market currencies. The impacts of these shocks and false alarms on
the policymakers, investors and the overall economy have always been far reaching and
profound. The book’s compelling arguments on false alarms have convinced me to look at the
economy in more calibrated way. And make judgments ignoring the unwanted noise of
negative headlines and panic information circulated in the economy.
I strongly agree with the book’s critique that reducing the complex global environment into a
simplistic theoretical framework in pursuit of a bullet solution, is profoundly misguiding. The
forecasts based on these theories are frequently failing in the real world, creating confusion
and anxiety among policymakers, executives and investors. The primary purpose of this book
is to raise awareness of the False alarms and the negative discourse that surrounds the
economy.
The possibility of Crises is not denied but for every crisis there are too many false alarms.
While discussing of False alarms, the authors challenge Daniel Susskind’s perspective in the
book “The world without work (Susskind, Daniel (2020): A world without work: Penguin
Books). They strongly believe that a world with no work is a false alarm. They make a
counterpoint, stating that Daniel, in his book focused on technological unemployment but
overlooked the favorable outcome of increasing real income leading to the emergence of new
job opportunities.
We are benefitted by the three guiding principles for managing the macro-economic risks and
uncertainties. The first principle is to abandon the concept of Master Model. The Master
model is a rigid approach of coming to a definitive solution on basis of universal models,
huge datasets and computational analysis. The executives and decision makers should have a
mindset which is free from the dominance of any economic theory.
The second principle is to avoid being swayed by alarming scenarios. The doomsday
narratives and forecasts are often misleading than enlightening. They are majorly overstated
and the chances of a false alarms are comparatively high. The decision makers are warned
against business models that are heavily depended on clicks and headlines that describe the
state of economy on the edge of the cliff.
And the third principle is to adopt an eclectic approach to economics for better
understanding. The leaders should focus on the drivers of the macro-economic risk rather
than narrowing down to a precision. The executives are advised to choose their clicks wisely
and inquire about the people and the history behind the clicks, before making any decisions.
The decision makers need to have a broader aspect while looking for the possible stimulators
which could mitigate these risks.
The readers are empowered with practical tools that would help them take rational decisions
for themselves and make judgment which are not based on any outsourced headlines. The
approach of Rational Optimism in dealing with macro-economic risks is always safer than
following a school of thought that stresses on single reliable lens for a bipolar world.
The idea of Economics, not being reduced to a natural science is not a recent concept, it has a
long history. Many economists including John Maynard Keynes have cautioned against
Economics being treated as a purely natural science. The uncertainties relating to economics
need to be accepted and the decision makers should look beyond them. The authors further
explain deeper, that if economics treated solely may not as effective as when combined with
other disciplines. The outcomes of the economic models when brought together with other
disciplines would be more enriching and robust.
I strongly advocate for moving beyond these traditional economic models that give quick
solutions. A better understanding of the entire framework would be a more sensible approach
in navigating through economic crises. The readers must prioritize a flexible mindset over
theoretical rigidity and opt for nuanced judgment than reliance on any selective models.
One of the key strengths of the book is its emphasis on the vital role of stimulus in mitigating
cyclical threats and managing existential risk. The stimulus in this book is classified in two
types. First is the Existential stimulus designed to rescue the economy during times of crises,
including the willingness and ability of policymakers and politicians to arrange funding in the
financial markets and pass legislations to implement the changes. And second is tactical or
the compulsive stimulus which is driven by politicians and policymakers to address
immediate economic challenges with careful strategic planning. Careful implementation of
stimulus programs can help economy mitigate existential risk promoting economic growth
and stability.
This book brings together the co-authors extensive experience and dedication across many
disciplines with special focus on macroeconomics. Their unique perspective in dealing with
macro-economic risks is thought provoking, inviting readers to rethink their assumptions.
The collection of insightful charts that help the readers to have a better understanding of the
authors arguments are truly commendable. It is undoubtedly an indispensable resource for the
executives, investors, policymakers and the readers. An essential read for someone seeking to
navigate across the volatile waters of the global economy.
Carlsson-Slezak and Paul Swartz. Harvard Business Review Press
“If it bleeds it reads”. The book Shocks, Crises and False Alarms is a classic explanation for
this quote. The book begins with the concept of Good Macro and how the concept is
challenged over the years due to a series of shocks and unforeseen risks. But the question is
Did an economy of global norms, smooth access to different economies and favorable
international relations really exist or was it an unattainable ideal. Followed by this discussion,
is Chapter 2, delving further into ways to deal with macro-economic risks. The rest 19
chapters are divided into three parts. Each part deals with a different level of macro-economic
risks.
The main attraction is the complex interplay between the economy and its media portrayal. It
makes me think why all the coverage in the news may be audio or video is focused more on
the downside. The authors give recent examples of the False Alarms such as, Covid 19 being
compared to the financial crisis of 2008 or the Rising US Federal interest rate having severe
effect on the Emerging Market currencies. The impacts of these shocks and false alarms on
the policymakers, investors and the overall economy have always been far reaching and
profound. The book’s compelling arguments on false alarms have convinced me to look at the
economy in more calibrated way. And make judgments ignoring the unwanted noise of
negative headlines and panic information circulated in the economy.
I strongly agree with the book’s critique that reducing the complex global environment into a
simplistic theoretical framework in pursuit of a bullet solution, is profoundly misguiding. The
forecasts based on these theories are frequently failing in the real world, creating confusion
and anxiety among policymakers, executives and investors. The primary purpose of this book
is to raise awareness of the False alarms and the negative discourse that surrounds the
economy.
The possibility of Crises is not denied but for every crisis there are too many false alarms.
While discussing of False alarms, the authors challenge Daniel Susskind’s perspective in the
book “The world without work (Susskind, Daniel (2020): A world without work: Penguin
Books). They strongly believe that a world with no work is a false alarm. They make a
counterpoint, stating that Daniel, in his book focused on technological unemployment but
overlooked the favorable outcome of increasing real income leading to the emergence of new
job opportunities.
We are benefitted by the three guiding principles for managing the macro-economic risks and
uncertainties. The first principle is to abandon the concept of Master Model. The Master
model is a rigid approach of coming to a definitive solution on basis of universal models,
huge datasets and computational analysis. The executives and decision makers should have a
mindset which is free from the dominance of any economic theory.
The second principle is to avoid being swayed by alarming scenarios. The doomsday
narratives and forecasts are often misleading than enlightening. They are majorly overstated
and the chances of a false alarms are comparatively high. The decision makers are warned
against business models that are heavily depended on clicks and headlines that describe the
state of economy on the edge of the cliff.
And the third principle is to adopt an eclectic approach to economics for better
understanding. The leaders should focus on the drivers of the macro-economic risk rather
than narrowing down to a precision. The executives are advised to choose their clicks wisely
and inquire about the people and the history behind the clicks, before making any decisions.
The decision makers need to have a broader aspect while looking for the possible stimulators
which could mitigate these risks.
The readers are empowered with practical tools that would help them take rational decisions
for themselves and make judgment which are not based on any outsourced headlines. The
approach of Rational Optimism in dealing with macro-economic risks is always safer than
following a school of thought that stresses on single reliable lens for a bipolar world.
The idea of Economics, not being reduced to a natural science is not a recent concept, it has a
long history. Many economists including John Maynard Keynes have cautioned against
Economics being treated as a purely natural science. The uncertainties relating to economics
need to be accepted and the decision makers should look beyond them. The authors further
explain deeper, that if economics treated solely may not as effective as when combined with
other disciplines. The outcomes of the economic models when brought together with other
disciplines would be more enriching and robust.
I strongly advocate for moving beyond these traditional economic models that give quick
solutions. A better understanding of the entire framework would be a more sensible approach
in navigating through economic crises. The readers must prioritize a flexible mindset over
theoretical rigidity and opt for nuanced judgment than reliance on any selective models.
One of the key strengths of the book is its emphasis on the vital role of stimulus in mitigating
cyclical threats and managing existential risk. The stimulus in this book is classified in two
types. First is the Existential stimulus designed to rescue the economy during times of crises,
including the willingness and ability of policymakers and politicians to arrange funding in the
financial markets and pass legislations to implement the changes. And second is tactical or
the compulsive stimulus which is driven by politicians and policymakers to address
immediate economic challenges with careful strategic planning. Careful implementation of
stimulus programs can help economy mitigate existential risk promoting economic growth
and stability.
This book brings together the co-authors extensive experience and dedication across many
disciplines with special focus on macroeconomics. Their unique perspective in dealing with
macro-economic risks is thought provoking, inviting readers to rethink their assumptions.
The collection of insightful charts that help the readers to have a better understanding of the
authors arguments are truly commendable. It is undoubtedly an indispensable resource for the
executives, investors, policymakers and the readers. An essential read for someone seeking to
navigate across the volatile waters of the global economy.
March 10, 2025
This book is the "Nothing ever happens"-meme blown up to 250 pages
I understand this book was written by BCG consultants for aspiring executives to be grabbed at the airport bookstore and read on a 3h flight to meet some other BCG consultants, but the intellectual reductionism of the book is borderline offensive.
The main thread of the book is that real-world processes in politics, economics, and business are way more durable and persistent than detractors would like you to believe during or before moments of crisis. Good point, but I'd expect the target audience of this book (senior managers) to have sufficient intellectual acumen and life experience to realize this without the help of a book.
Beyond this general argument, the book is filled with the typical consultant flip-flop argumentation that is less helpful than a horoscope (at least that one tells me when to water my plants): "Many people believe horrible thing A might happen, but in most cases more benign thing B happens. Nevertheless, horrible thing A might still happen."
Economic scenario analyses are reduced to decision trees only three layers deep and fail to consider any scenarios that lie outside what has been observed in the US in the last 100 years. The few attempts that are made to look beyond this very narrow scope are mere regurgitations of economic hearsay presented as scientific fact.
The writing style is bland like 10-year-old oatmeal, except for occasional moments of weird American exceptionalism. Each of the 20 chapters begins with an executive introduction, then goes through a list of arguments, and ends with a summary of the list items you just read two pages ago. At first, I thought they used AI to write this, but even AI uses more engaging language. If it wasn't so disappointing, it could serve as a comedic testament to the soul-grinding pointlessness of the consulting profession.
I understand this book was written by BCG consultants for aspiring executives to be grabbed at the airport bookstore and read on a 3h flight to meet some other BCG consultants, but the intellectual reductionism of the book is borderline offensive.
The main thread of the book is that real-world processes in politics, economics, and business are way more durable and persistent than detractors would like you to believe during or before moments of crisis. Good point, but I'd expect the target audience of this book (senior managers) to have sufficient intellectual acumen and life experience to realize this without the help of a book.
Beyond this general argument, the book is filled with the typical consultant flip-flop argumentation that is less helpful than a horoscope (at least that one tells me when to water my plants): "Many people believe horrible thing A might happen, but in most cases more benign thing B happens. Nevertheless, horrible thing A might still happen."
Economic scenario analyses are reduced to decision trees only three layers deep and fail to consider any scenarios that lie outside what has been observed in the US in the last 100 years. The few attempts that are made to look beyond this very narrow scope are mere regurgitations of economic hearsay presented as scientific fact.
The writing style is bland like 10-year-old oatmeal, except for occasional moments of weird American exceptionalism. Each of the 20 chapters begins with an executive introduction, then goes through a list of arguments, and ends with a summary of the list items you just read two pages ago. At first, I thought they used AI to write this, but even AI uses more engaging language. If it wasn't so disappointing, it could serve as a comedic testament to the soul-grinding pointlessness of the consulting profession.
December 3, 2024
"Shocks, Crises, and False Alarms" by Philipp Carlsson-Szlezak and Paul Swartz offers a fresh framework for assessing macroeconomic risks, challenging traditional model-based forecasting approaches. Instead of relying on specific predictions, the authors emphasize developing sound judgment by understanding the structural and historical contexts of the economy, a methodology they call "economic eclecticism."
Key insights include:
1. Rethinking Macro Risk: The authors argue that many disruptions are transient "false alarms," while structural changes are often overlooked. They propose analyzing macro risks through the lens of economic systems rather than sensational headlines or conventional models.
2. Navigating Core Risks: The book categorizes risks into three domains: the real economy, the financial system, and the global geopolitical environment. It explores issues like business cycles, long-term growth drivers, the role of technology, and policy responses.
3. Combating Doom Narratives: The authors advocate for a balanced view, avoiding excessive pessimism while recognizing the resilience of modern economies. They highlight the importance of rational optimism to uncover hidden opportunities during macroeconomic shocks.
4. Practical Applications: The book equips leaders with tools to interpret macroeconomic risks effectively, aiding better tactical and strategic decisions in a complex global landscape
This book is a valuable resource for leaders and investors seeking to navigate uncertainty without succumbing to overly simplistic or alarmist narratives.
Key insights include:
1. Rethinking Macro Risk: The authors argue that many disruptions are transient "false alarms," while structural changes are often overlooked. They propose analyzing macro risks through the lens of economic systems rather than sensational headlines or conventional models.
2. Navigating Core Risks: The book categorizes risks into three domains: the real economy, the financial system, and the global geopolitical environment. It explores issues like business cycles, long-term growth drivers, the role of technology, and policy responses.
3. Combating Doom Narratives: The authors advocate for a balanced view, avoiding excessive pessimism while recognizing the resilience of modern economies. They highlight the importance of rational optimism to uncover hidden opportunities during macroeconomic shocks.
4. Practical Applications: The book equips leaders with tools to interpret macroeconomic risks effectively, aiding better tactical and strategic decisions in a complex global landscape
This book is a valuable resource for leaders and investors seeking to navigate uncertainty without succumbing to overly simplistic or alarmist narratives.
April 26, 2025
This was a fantastic book that helps make sense of all the things happening in the economy. It does this by building a model of trends in the economy and helping you determine what the overall trends and biases are in the direction of the economy.
For example, the market has a bias towards tightening, inflation and labor scarcity. This will drive wages up and will be a contest towards productivity gains. It may also mean companies will need to accept lower margins. The authors also discuss the overall direction of decoupling v. Globalization.
It is a “dense” book meaning it has a lot of detail and requires significant concentration to fully understand the concepts. I actually would have to reread sentences and paragraphs. Thankfully, I read it on a kindle scribe so I took a lot of notes.
For example, the market has a bias towards tightening, inflation and labor scarcity. This will drive wages up and will be a contest towards productivity gains. It may also mean companies will need to accept lower margins. The authors also discuss the overall direction of decoupling v. Globalization.
It is a “dense” book meaning it has a lot of detail and requires significant concentration to fully understand the concepts. I actually would have to reread sentences and paragraphs. Thankfully, I read it on a kindle scribe so I took a lot of notes.
February 12, 2025
“Recall that in the phase of convergence,the global allocation of production capacity was placed in the hands of businesses. This delivered a powerful structural force for cost optimization at the firm level and deflationary impulses at the macroeconomic level. In the era of divergence, governments instead seek to influence the allocation of global capacity in line with geopolitical objectives and risks. Whether through incentives or control, the emphasis on reliability will lower long-run economic potential as some specialization and benefits of trade are sacrificed. Yet, the shift in trade architecture also drives greater investment and more demand for labor in rich economies. Put simply, repatriating global production capacity will reinforce the era of tightness in the years ahead”.
December 9, 2024
Peek into how big events like money problems, economic bubbles, & global changes affect everyone’s lives e.g., inflation, currency changes, petrol prices hike, etc., which shows how people as well as leaders can make smart choices in dealing with it. Dive into the complexities of macroeconomic risks & its implications for businesses, policymakers, & investors, particularly in an era of volatility & tightness. Ultimately, emphasises the importance of sound judgment & adaptability in navigating an uncertain economic landscape. A read for the curious mind.
• Non-fiction, economics
• By economic experts
• On persistence of “good macro”, financial cycles, & global trends.
• Non-fiction, economics
• By economic experts
• On persistence of “good macro”, financial cycles, & global trends.
March 22, 2025
Rational optimists in a ear of tightness.
Growth boosts beat growth risks
- Structurally tight labor markets
- Strategic investment demand
- New generation of technology: AI will result in more productive gain gradually.
It is all about judgement
1. Master-model mentality cripples economic judgement
2. There will be plenty of doom-mongering. In good times, recession risk will be more interesting than cyclical upside, and in times of crisis, systemic collapse more interesting than recovery.
3. Economic eclecticism should always be the analytical starting point.
“Doubt is not a pleasant condition, but certainty is an absurd one”
Voltaire
Growth boosts beat growth risks
- Structurally tight labor markets
- Strategic investment demand
- New generation of technology: AI will result in more productive gain gradually.
It is all about judgement
1. Master-model mentality cripples economic judgement
2. There will be plenty of doom-mongering. In good times, recession risk will be more interesting than cyclical upside, and in times of crisis, systemic collapse more interesting than recovery.
3. Economic eclecticism should always be the analytical starting point.
“Doubt is not a pleasant condition, but certainty is an absurd one”
Voltaire
August 14, 2025
An updated compendium for macroeconomics. The book depicts the theory looking at the different events in the history, from recession to crisis. It explains clearly how to evaluated different macroeconomics interventions including monetary policy, inflation effects and geopolitical risks. It offers a good lens to understand effects of more frequent shocks and finally also paint a potential future outlook based on a tight scenario, where limited labour availability and high rates will keep a growing economy justifying also AI introduction and improve in productivity (evaluated as a small incremental effect over time).
August 23, 2025
I like economics, this is a book for people who love economics. I enjoy reading about economics through a lens of how incentives, both at a macro and micro level. This was not that and it was very dry. Author loves to use big words with long complex sentences to lend credibility, but they could've easily written in more casual language and been just as effective. It felt like I was reading a text book for school again, no thanks, I only read for enjoyment now. I got about 75 pages and gave up. I tried to read the summaries of the chapters after that just to get a gist, and I couldn't do that either. 2 stars only because I didn't finish.
October 3, 2024
Great, realistic and clear-minded analysis
Of the real world, real people and real economy. Anyone who has some insight about how the real things work know they are far more complex than a title can explain. Unfortunately, that is exactly what many so-called expert and gurus are trying to do. Strongly recommend this book to serious readers who are interested in the real things
Of the real world, real people and real economy. Anyone who has some insight about how the real things work know they are far more complex than a title can explain. Unfortunately, that is exactly what many so-called expert and gurus are trying to do. Strongly recommend this book to serious readers who are interested in the real things
November 9, 2024
Very balanced view of what is to come debunking some of the popular narratives such as the inevitable conflict between the US and China. It has informative infogrpahics and charts. Makes a the prediction that the next decade will continie to be characterised with labour tightness.
Currently Reading
April 3, 2025Macroeconomics is about judgement - not prediction. Judgement is the basis of better decision-making (avoid costly traps), and it can reduce experienced volatility (enabling smoother leadership). Nobody controls economic volatility - but leaders can choose what they focus on.
This entire review has been hidden because of spoilers.
April 15, 2025
A thoughtful, well-reasoned perspective on modern macroeconomics. Some of the claims about trade may be under flux due to the Trump tariffs. Good positions on how to use models, numbers, and how to make decisions under uncertainty.
July 15, 2024
I have selected this book as Stevo's Business Book of the Week for the week of 7/14, as it stands heads above other recently published books on this topic.
Read
November 13, 2024Currently Reading.
May 9, 2025
Very good book. Shows how relevant Macro is in business decision-making and offers great guidelines for sanity checks without delving too deep into the academic intricacies.
August 18, 2025
For the lay audience. Gets too broad towards the end but makes good insights throughout. Especially liked the sections about AI and whether its adoption will induce a productivity boom.
August 23, 2025
Every foreign policy analyst should read this book.
September 7, 2025
Insightful way to think about macroeconomic risks. Book was a little meandering though and written in a very "consultant" way. Could have been shorter and/or denser
March 11, 2026
Finally, a book that doesn't try to make money on doom. Great level headed take and framework for investment decisions.
December 12, 2024
SC&FA is written by a rare breed of economist: one who can communicate their ideas. As an economist, the book wasn't really written for me, but I still took a lot from it.
The opening chapters emphasise why businesses may find macroeconomics useful. Leaders make judgements under uncertainty—they're used to this—but a grounded knowledge of economics makes the world a little easier to navigate.
A large part of the book is devoted to demonstrating the authors' guiding philosophy: spend less time building quantitative models and, instead, more time developing your judgment around drivers and risks. I enjoyed this approach and found the clarity impressive, though I did wonder whether the authors were wilfully obscuring the fact that they did have economic models in mind. For example, the section on growth is almost entirely underpinned by the Solow growth model. Perhaps such models just don't sell well with businesses, and it's best to keep them in the background.
I found myself recalling Dani Rodrik's Economics Rules. In the book, Rodrik makes a cautious case for economic modelling. The formality of setting assumptions and testing them provides guardrails, keeping the ball heading towards the pins. Modelling also allows economists to quantify trade-offs. Truman's famous quip about the one-handed economist was lessened with the development of SVARs and DSGEs. Reduced-form modelling also allows us to measure historical patterns—something the author is keen on—but again, with more structure than from narrative alone.
There are few books I've highlighted more. I'll take away a deeper understanding of productivity, inflation, and fiscal deficits, but most importantly, the value of storytelling in delivering a message. I hope to remember and apply the parallels between economics as a band and the logic of studying health risks as it applies to the economy. This book succeeds in making economics feel useful again.
The opening chapters emphasise why businesses may find macroeconomics useful. Leaders make judgements under uncertainty—they're used to this—but a grounded knowledge of economics makes the world a little easier to navigate.
A large part of the book is devoted to demonstrating the authors' guiding philosophy: spend less time building quantitative models and, instead, more time developing your judgment around drivers and risks. I enjoyed this approach and found the clarity impressive, though I did wonder whether the authors were wilfully obscuring the fact that they did have economic models in mind. For example, the section on growth is almost entirely underpinned by the Solow growth model. Perhaps such models just don't sell well with businesses, and it's best to keep them in the background.
I found myself recalling Dani Rodrik's Economics Rules. In the book, Rodrik makes a cautious case for economic modelling. The formality of setting assumptions and testing them provides guardrails, keeping the ball heading towards the pins. Modelling also allows economists to quantify trade-offs. Truman's famous quip about the one-handed economist was lessened with the development of SVARs and DSGEs. Reduced-form modelling also allows us to measure historical patterns—something the author is keen on—but again, with more structure than from narrative alone.
There are few books I've highlighted more. I'll take away a deeper understanding of productivity, inflation, and fiscal deficits, but most importantly, the value of storytelling in delivering a message. I hope to remember and apply the parallels between economics as a band and the logic of studying health risks as it applies to the economy. This book succeeds in making economics feel useful again.
Displaying 1 - 24 of 24 reviews