The best 31 Economic Theory books

The Psychology of Money (2020) looks at the way money works in the real world. Financial decisions are rarely driven by the theories of economists and the neat spreadsheets of accountants. Instead, a myriad of factors, from personal history to pride and even envy, shape our decision-making. The results are often surprising – and always fascinating.

The Wealth of Nations is a profoundly influential work in the study of economics and examines exactly how nations become wealthy. Adam Smith advocates that by allowing individuals to freely pursue their own self-interest in a free market, without government regulation, nations will prosper.

Capitalism, Socialism and Democracy (1942) is a seminal work of economics. Its ideas have proven prophetic, and remain relevant to this day. It claims that capitalism will ultimately be eroded by the very processes that define it. It also explains the differences between capitalism and socialism and their relationship to democracy, and helps readers understand the role of entrepreneurship and creative destruction in modern capitalism.

Capitalism and Freedom (1962) is one of the most influential discussions of the relationship between economic and political freedom to have ever been put to paper. Written at the height of the Cold War between Soviet socialism and Western capitalism, Milton Friedman argues that only free markets can guarantee liberty. His theory remains every bit as relevant and thought-provoking today as when it was first published.

Slouching Towards Utopia (2022) examines the “long century” between 1870 and 2010, during which technological progress, globalization, and the advent of social democracy opened a new horizon of human progress. Barring the horror years of World Wars I and II, humanity seemed to be on a slow, uneven crawl toward utopia. But in 2010, the tables turned. Economic progress in the Global North ground to a halt. 

Economic Facts and Fallacies (2008) takes some common assumptions about economics and politics and reveals them as fallacies. It’s only by facing uncomfortable truths, the book argues, that we can begin to solve the problems in front of us.

Economics: The User’s Guide lays out the foundational concepts of economics in an easily relatable and compelling way. Examining the history of economics as well as some critical changes to global economic institutions, this book will teach you everything you need to know about how economics works today.

Stop. Think. Invest. (2022) takes a look at behavioral economics, a field of study that explores the roles of human emotion and behavior in financial decision-making. It examines how people’s unconscious biases and inherent aversions influence their decisions in every aspect of the investment process.

A Little History of Economics (2017) is a whistle-stop tour of the major questions posed by economists through the centuries, from Aristotle to Thomas Piketty. It examines questions of inequality, selfishness, and the role government should play in economies. 

The Constitution of Liberty (1960) is a classic of economic philosophy. As one of the seminal texts of modern liberalism, it reminds us of the values of individual freedom, limited government, and universal principles of law. First published in the 1960s, it contends that social progress depends on the free market rather than on socialist planning. This work remains relevant in an age where socialist ideas are gaining new popularity. 

Doughnut Economics (2017) is a call to arms for a fresh approach to economics. As inequality soars and environmental crisis looms, the book’s central question has never seemed more relevant. How can we build a just economic system that allows us to thrive while preserving the planet? A good place to start, Kate Raworth suggests, is to do away with the old myths that have shaped economic thinking for so long. Zeroing in on the doughnut-shaped “sweet spot” in which our needs can be sustainably met, this is a thought-provoking read which might just help save the world.

SuperFreakonomics (2009) explains why thinking like an economist can help us understand our modern world. These blinks illustrate key economic principles and the importance of collecting data with colorful stories from human history, and offers surprising solutions for the global problems that we face today.

Adaptive Markets (2017) is about a new economic theory that helps us better understand the human element behind financial markets. Andrew W. Lo expertly illustrates the shortcomings of current prevailing economic theories, showing us how finance is less like physics or math and more like a responsive and evolving organism – not unlike ourselves.

Licence to be Bad (2019) explains how in the past 50 years a small handful of economists has drastically changed the way we think about the subject. Ideas including game theory, public choice theory, and free-riding have worked their way into our minds and our discourse, apparently permitting us to behave badly.

Utopia for Realists (2016) is a call to arms for a radical rethinking of life, work and how society functions. It argues that the world enjoys unprecedented wealth and material comfort but is still full of problems, from soul-destroying jobs to inequality and poverty. We have the power to solve these problems and build a better future if we embrace utopian thinking.

Talking to My Daughter About the Economy (2018) is a lucid and accessible account of our current economic system. This engaging primer explains what economics is, what it does, and why it became such a force in our everyday lives.

In 23 Things They Don’t Tell You About Capitalism Ha-Joon Chang destroys the biggest myths of our current economic approach. He explains how, despite what most economists believe, there are many things wrong with free market capitalism. As well as explaining the problems, Chang also offers possible solutions which could help us build a better, fairer world.

Inflation Matters (2015) takes what’s often presented as a dense and complicated –⁠ not to mention boring –⁠ subject and turns it into something anyone can understand. Using simple, clear explanations, it presents the reasons why inflation exists, what and who perpetuates it, and how it impacts both the economy and society as a whole. Analyzing historical trends, it also presents a theory that inflation tends to follow a wavelike pattern over time –⁠ but that it doesn’t necessarily need to remain that way.

The Origin of Wealth shows us the inadequacies of the economic theories that underpin our understanding of economics. The book argues that economic actors shouldn’t be seen as rational consumers that act on their self-interest. Rather, economics is best understood as a complex system of adaptation, similar to evolution, where products, ideas, and ideology compete for survival.

Edge of Chaos (2018) examines the key challenges that liberal democracies around the world are facing today. Aging populations, limited resources and increasing debt are all threats to these countries’ economic well-being – but so too are the “remedies” of short-term policies and protectionism. Author Dambisa Moyo examines that misguided agenda and presents a radical blueprint for economic growth in the twenty-first century.

The Value of Everything (2018) presents an argument for redefining value in the economy so that we can better understand who really creates value, and who extracts it.

Jean Tirole’s Economics for the Common Good (2017) is a wide-ranging look at the contemporary economy, packed with plenty of insights into the theory and practice of modern-day economics. Deconstructing the supposed opposition of state and market, Tirole explores their many interconnections in fields ranging from climate change to property rights and the new digital economy.

Austerity (2013) cuts through the confusion behind our recent financial crises and reveals what really happens when economists call for a policy of austerity to be implemented. This is when budgets are cut, public funding is slashed and working-class families suffer so that banks can be saved and continue to make billions. Find out what’s really going on and who’s really being protected when your country gets pushed into austerity.

Portfolios of the Poor (2009) details the creative financial strategies that the world’s poorest people use to get by. These blinks explain how people with no educational background whatsoever manage their finances.

Austerity (2019) uses data analysis to look at one of the most controversial topics in economics today. An analysis of several countries’ austerity policies over the past several decades reveals that cutting spending can actually help the economy expand.

Open (2020) traces the progress of ancient and modern human accomplishments, and reveals that behind all of our major advancements is a policy of openness, tolerance, and free trade. You’ll see how, from the Phoenicians to the Dutch East India Trading Company, the free flow of commerce and ideas has led to wealth, innovation, and problem-solving that would have never been possible otherwise.

Meltdown (2009) gives you a guide to understanding the government regulations which in effect caused the 2008 global financial crisis. These blinks will explain how government spending has and always will worsen economic recessions, and importantly, what needs to be done to save the world economy.

When we bailed out the banks during the Great Recession, we didn’t actually address the real factors that caused the economic downturn. The actual problem lay with excessive mortgage lending to those who couldn’t afford it, which led to heavy debts and, eventually, huge collapses in consumer spending. To avoid the consequences of this boom-and-bust cycle in the future, the authors propose new ways of restructuring debt and stimulating the economy.

These blinks explain the root of the eurozone crisis in a comprehensive, methodical way. They shed light on the deep structural problems the eurozone is facing and outline scenarios that could help restore competitiveness among the southern peripheral states of the region.

Forecast critiques modern economic theory by revealing its major flaws. Physicist Mark Buchanan takes a close look at basic scientific assumptions behind our economic understanding and, with deft analytical skills, he unveils their inaccuracy. In the second part of the book, Buchanan presents a range of scientific discoveries that he believes might eventually help us to improve modern economics.

Diversity and Complexity (2011) offers an in-depth examination of the nature of the world's complex systems, from natural ecosystems to economic markets. It outlines the reasons that diversity within such systems is so crucial, as well as showing how diversity helps fuel innovation and novelty.