ISBN Lookup

AI Overview

Overview of "Principles of Economics" by N. Gregory Mankiw

Author and Publication

"Principles of Economics" is an introductory economics textbook written by N. Gregory Mankiw, a Harvard economics professor. The book was first published in 1997 by Harcourt and has since become a standard textbook for American economics departments' introductory classes. As of 2024, it has ten editions and is currently published by Cengage, which claims it is the "most popular economics textbook" .

Key Themes

The book introduces 10 principles of economics that Mankiw considers essential for understanding economic wisdom. These principles are:

  1. People face trade-offs: The idea that every economic decision involves a trade-off.
  2. The cost of something is what you give up to get it: The concept of opportunity cost.
  3. Rational people think at the margin: The idea that people make decisions based on marginal analysis.
  4. People respond to incentives: The concept that incentives influence behavior.
  5. Trade can make everyone better off: The potential benefits of trade.
  6. Markets are usually a good way to organize economic activity: The efficiency of markets.
  7. Governments can sometimes improve market outcomes: The role of government intervention.
  8. A country's standard of living depends on its ability to produce goods and services: The relationship between production and standard of living.
  9. Prices rise when the government prints too much money: The impact of inflation.
  10. Society faces a short-run tradeoff between inflation and unemployment: The tradeoff between inflation and unemployment .

Plot Summary

The book provides a comprehensive introduction to economics, covering basic concepts such as scarcity, supply and demand, costs and benefits, and incentives. It uses these principles to explain how markets and economies work, focusing on universal human nature and the fundamental economic problem of scarcity. The text includes tools like the production possibilities curve to illustrate economic concepts and decisions made by individuals, firms, and governments .

Critical Reception

The book has received both praise and criticism. On one hand, it has been widely adopted and praised for its clear and conversational writing style, making it accessible to students and decision-makers alike . On the other hand, some critics argue that the book creates the "impression that the economic principles explained correspond to a kind of economic consensus," which it denies . Additionally, there have been criticisms about the high price of the textbook, leading Mankiw to donate the textbook royalties from his students to charity .

Educational Impact

"Principles of Economics" has had a significant impact on introductory economics education. It provides a foundational framework for understanding economic concepts and principles, which are essential for making informed decisions in various economic contexts. The book's popularity and widespread adoption have made it a cornerstone in many economics curricula .