“Economics is like gravity: Ignore it and you will be in for some rude surprises.” So says Charles Wheelan in his book Naked Economics: Undressing the Dismal Science. It is an unusual economics text book, explaining the key principles of the academic discipline of economics using interesting stories and examples, without ever once resorting to the use of an equation of other mathematical expression.
Exactly how does inflation work, and how do the US Federal Reserve and its Australian counterpart the Reserve Bank seek to control the inflation rate by raising and lowering interest rates? Why is it that the shelves of supermarkets in free-market-economy countries are typically stocked with wide ranges of different products for consumers to choose from, whereas the shelves of stores in socialist economies are often empty, with desired products being unavailable?The book answers these and many other interesting questions concerning economics.
Although the benefits of free markets are discussed frequently in the book, the author points out a number of limitations associated with them. They can only work efficiently in the presence of effective institutions and an appropriate regulatory framework. There is a trade-off between market freedom and the extent of poverty in an economy, and governments must find an appropriate balance. The book provides a very readable explanation of a number of economics concepts, but it does not provide a comprehensive overview of the subject.