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Economics Rules: The Rights and Wrongs of the Dismal Science

3.93  ·  Rating details ·  1,032 ratings  ·  108 reviews
In the wake of the financial crisis and the Great Recession, economics seems anything but a science. In this sharp, masterfully argued book, Dani Rodrik, a leading critic from within, takes a close look at economics to examine when it falls short and when it works, to give a surprisingly upbeat account of the discipline.


Drawing on the history of the field and his deep expe
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Hardcover, 272 pages
Published October 13th 2015 by W. W. Norton Company
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Niels
As a former economics student, who subsequently switched to political sciences and now doing a PhD in this domain, I find myself in a privileged position and in the middle of the crunching criticism and debate this book furthers. In some ways, Rodrik is the teacher I never had, and this book is the qualified nuanced bible I never read during my Econ years. That's not to say my professors nor my curriculum was bad - on the contrary. But I do recall finding myself in discussions with PhD students ...more
Jim
Dec 03, 2015 rated it liked it
I would not recommend this book unless you have a strong interest in economics and have read several other economic books intended for the lay person. Not that it is hard to understand, it is an easy read. However, its value is in understanding how to evaluate economic arguments and I don’t think it has general value unless you are interested in following different economic topics and trying to learn about them. That said, I found that the book had an immediate significant impact on how I read e ...more
Steve
Dec 16, 2015 rated it it was amazing
Shelves: non-fiction
Well worth reading, if you have any interest in economics!!! I'd recommend the book, if for no other reason than the author (an insider) fully embraces, doesn't shy away from, and offers a convincing explanation as to how the economics community (as a group, profession, or academic discipline) could have so badly failed to predict and/or mis-judge the 2008 financial crisis.

There are so many great things about this book, it's hard to know where to start, other than to say that one of the book's (
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Eric Bottorff
Jan 11, 2016 rated it it was ok
Given all the praise I've seen of this, it was rather disappointing. There's some good and useful insight into the internal workings of academic economists, particularly wrt to the importance of models. But too often I don't think he's really facing up to the more serious and thoughtful versions of the criticisms he's addressing--he's erecting straw men, basically. And his discussion lacks some of the semantic rigor which is required for this kind of endeavor to succeed, and which he claims for ...more
Tanay Raj
May 24, 2020 rated it it was amazing  ·  review of another edition
My interest in Economics was fueled largely by what the great economist John Hicks called the subject's "intellectual attraction". However, there always were a few questions lagging at the back of my mind which made me skeptical of my decision to pursue Economics beyond collehe. This short book has answered the questions I had been pondering on since the moment I decided to pursue an academic career in Economics, like, what is the value of economics as a discipline? How relevant are the things t ...more
Nick Armstrong
Feb 05, 2017 rated it it was ok  ·  review of another edition
Shelves: business
Totally inaccessible.
Reid
Jan 20, 2018 rated it really liked it  ·  review of another edition
Let me say at the very outset that if you don't care about the ins and outs of economics, this book probably isn't for you. There are, I suspect, some fine books for the general reader about this subject, but this really is not one of those. Not that the concepts will go over your head (though some it certainly did travel over mine), but rather that you probably won't care enough to figure out what the heck Dr. Rodrik is going on about.

But if, like me, you have the amateur's fascination with how
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Maxim
Sep 06, 2020 rated it it was amazing  ·  review of another edition
A book every critic of Economics (as well as every Economist) should absolutely read. Not because it invalidates every critique or is a flaming defense (it isn’t), but because it provides a nuanced insight what contemporary Economics actually is - which is quite a bit removed from the strawman of much of popular critics’ attacks.

Rodrik himself is somewhat of a “dissident economist” and he does not spare with criticism of his fellow economist where they go astray and push recommendations that are
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Laura
Jan 14, 2021 rated it liked it  ·  review of another edition
Shelves: non-fiction
In my opinion this would have been better as an essay than a full length non-fiction book.
That being said I enjoyed it and got some insights into economic models and why they are the way they are, which could soothe some of my frustration that I had with my economics module this semester. It‘s true, studying is so much easier when you know the background on why things work the way they do and why they are handled in a certain way.
That being said I think for people who are majoring in economics,
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Dieu-Hoa Nguyen
Mar 05, 2017 rated it really liked it  ·  review of another edition
so good to read it before graduation. Love his epilogue which summarize all the important points of book.

After reading the book, I feel like it needs one Newton of physic for this science of Economics (if can say so).


Soumya Mondal
Jun 18, 2020 rated it really liked it  ·  review of another edition
A great insight into what economics fundamentally is. Loved it.
John  Mihelic
Feb 17, 2016 rated it liked it
I grabbed this book because it was making a minor stir in the blog-o-sphere.

It was kind of a let down. Rodrik is a bit of a rebel when it comes to economics discourse (once wrote a book doubting fully the benefits of globalization *fainting couch). But even then the options that he looks at seem narrowly circumscribed - mostly macro from new keynesian to new classical! To his credit, Marx raises his head, if only to be dismissed.

What I really like is the framing of the book as looking at models,
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Fernando  Hoces de la Guardia
Aug 05, 2016 rated it really liked it
Shelves: economics
Many interesting points:
- remember that there are many models for a single problem
- emphasize that economics usually has little to say about distribution, and why it does it usually involves more advocacy than science.
- in general the 20 commandments at the end of the book are a great summary and reminder of the overall message of the book.

I'm giving it 2 stars because throughout the book there were several half truths/half lies that the author used as 100% truth to support his points. The ones
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Igor
Jan 14, 2016 rated it it was amazing  ·  review of another edition
Shelves: economics
In Economics Rules Dani Rodrik presents one of the best defenses of economics. Although insider to the discipline, Rodrik is not orthodox free-market ideologue, as many people imagine most economists; but he isn't far-left "debunker" either.

For Rodrik, economics is a science based on multiplicity of models which apply to the reality under different circumstances. And true economist must not seek the best model, but use many of them and understand their limitations. Models need not be complex, b
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Andreas
Dec 22, 2015 rated it liked it
Shelves: economics-etc
I feel slightly disappointed by this book. It does contain one very powerful idea, that needs to be repeated again and again: economics is a collection of models, and there will never exist any 'one model that rules the others'. I'm also very much in favour of reforming 'econ 101'. Maybe it would even be better to stop teaching basic economics courses altogether to for example law students, in favour of a decent statistics course.
But I was hoping that Rodrik would dig deeper into development ec
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Jonah
Oct 14, 2019 rated it liked it  ·  review of another edition
A good insider critique of economics focusing mainly on how economists can go wrong by misapplying models to incorrect contexts. Given that Rodrik frequently writes for left-leaning heterodox outlets like Boston Review, I was frankly a bit surprised by how defensive he ultimately was of the economic establishment. While the book was mostly unobjectionable, I felt like it was superficial quite a bit, and a lot of the most interesting bits (such as how economists can be biased towards advocating f ...more
dead
Apr 26, 2016 rated it liked it
The main argument, that economics is a set of models and that these are potentially (if not in reality) diverse and contextual, is right. Everything else in the book is a hodgepodge of contradictory statements, special pleading, poorly developed arguments, and uninformed sneers at other social sciences. Many of the critiques Rodrik levels at the discipline are right, but as a defense of economics this book fails entirely.
eilasoles
Useful, but not particularly profound, and I think Rodrik is too glib about brushing off criticism about the discipline. Wasn't it Bourdieu who said that those who are not at the periphery find it hard to see structures of hierarchy and domination? When Rodrik says that the discipline is not hierarchical and that it's good ideas and not status or prestige that counts, I think his power and status within the discipline blinds him to otherwise-obvious truths. ...more
Aayush
Oct 11, 2015 rated it it was amazing  ·  review of another edition
Shelves: economics
Excellent book, illuminating on the approach to Economics and is a must read for anyone trying to understand the discipline and not just the analysis and day to day Economics. It was extremely helpful to me in understanding and perhaps developing a balanced and reason-based approach to economics (and avoiding a dogmatic one) as I embark upon my scholarly journey of the subject.
Jason Furman
Nov 28, 2015 rated it it was amazing  ·  review of another edition
Shelves: economics, nonfiction
Any knee-jerk supporter or critic of economics should read Dani Rodrik’s Economics Rules which argues that economics offers a collection of models which are internally coherent because of the discipline of mathematics or empirics but whose external validity depends on the particular circumstances.
Maytham Abdulraheem
Dec 10, 2015 rated it really liked it
It is like a huge literature review of economics and it`s tools, with a manual on how to choose between the tools . Even if you do not agree with every word in the book, I think you will still find it interesting and simple (but not simplistic) . ...more
Paweł Michalski
Dec 01, 2016 rated it it was ok
A little too long defence of economics as a/the science. Worth reading if you're interested in what economics is and where it applies. ...more
Dylan Groves
Jan 16, 2018 rated it really liked it  ·  review of another edition
Short and clear defense of the methodological approaches embraced by Solow-style economics.

Models: simplifications designed to show how specific mechanisms work by isolating them from other, confounding effects. They are like fables, in that they clearly explain a principle at the expense of realism. They are are like experiments, in that they insulate and isolate key facts about the world in order to identify causal effect (a).

Models can have unrealistic assumptions, but they should have reali
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Vinh Phan
Jan 31, 2021 rated it it was amazing  ·  review of another edition
As I progressed from high school economics to higher economics classes in college, I could not help but lose a sense of "truth" in economics. Given an economic problem, vastly different perspectives could be used as potential solutions. With all these different models, often contradictory to one another, what was the use of economics besides theorizing?

Seeking the answer to the question above was why this book caught my attention. I first came to this book expecting a proper overview of an acce
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Erick
May 18, 2017 rated it really liked it  ·  review of another edition
It contains a thoughtful account of economics and its relevance. As an economist, it may help you to better understand the methods, contributions, limitations and amusing details of this field of study. For non-economists, it would be an excellent manual for interacting with the field and those related to it. The book is pleasurable to read. Nevertheless, at times, the reader might perceive that the author's thoughts are not conclusive on certain issues. But, I imagine that is precisely one of t ...more
Terry
This book should have been titled "A Guide to Why Economics is Hard". The book's treatise is to outline why economics is a tricky field. My response to this thesis and its answer as it discusses manifold complications in human activity is to "that's neat" and "I don't care". Over its pages the author details cases where models become too technical, too simple, too narrow, and too broad and what drives the users of those models to do that. The take-away for me is that any given economic model ha ...more
Olga Andreeva
Sep 23, 2020 rated it really liked it  ·  review of another edition
If you are an aspiring economist, this book is very much worth reading. It provides a schema of how research in economics should be done: an economist should develop a model consistent with the subject (i.e. country, industry, behaviour) in question, drawing insights from different schools in economics, but never completely relying on any one of them.

As an economics student myself, I found this approach to research inspiring and practical. However, I felt that the book dismissed worries about w
...more
Haaris Mateen
Aug 31, 2017 rated it really liked it  ·  review of another edition
The book becomes my best suggestion to friends and family when they question what modern Economics is, what is the best the field has to offer, and most importantly, the tendencies that let it become- often rightly so - a target for criticism. Dani Rodrik addresses two broad, arguably (and therefore unfortunately) mutually exclusive audiences - the economists and the non-economists. To the former he advocates humility in the way we use our models and having the openness to talk about the multipl ...more
Patrick
Aug 26, 2019 rated it really liked it  ·  review of another edition
“Give me a one-handed Economist. All my economists say 'on hand...', then 'but on the other...” ― Harry Truman

Rodrik would not have been liked by Truman but he gives a fair criticism of the economics profession. He goes through some examples of economic theory and shows things are often more complicated than they were original thought. For example, if one had studied economics 15 years ago, one might have been taught comparative advantage / Heckscher–Ohlin / Ricardian economics and thought it ex
...more
Farzad Abdolhosseini
This review has been hidden because it contains spoilers. To view it, click here.
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Dani Rodrik is the Rafiq Hariri Professor of International Political Economy at the John F. Kennedy School of Government at Harvard University. He lives in Cambridge, Massachusetts.

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“The correct answer to almost any question in economics is: It depends.” 6 likes
“Many models are constructed to account for regularly observed phenomena. By design, their direct implications are consistent with reality. But others are built up from first principles, using the profession’s preferred building blocks. They may be mathematically elegant and match up well with the prevailing modeling conventions of the day. However, this does not make them necessarily more useful, especially when their conclusions have a tenuous relationship with reality. Macroeconomists have been particularly prone to this problem. In recent decades they have put considerable effort into developing macro models that require sophisticated mathematical tools, populated by fully rational, infinitely lived individuals solving complicated dynamic optimization problems under uncertainty. These are models that are “microfounded,” in the profession’s parlance: The macro-level implications are derived from the behavior of individuals, rather than simply postulated. This is a good thing, in principle. For example, aggregate saving behavior derives from the optimization problem in which a representative consumer maximizes his consumption while adhering to a lifetime (intertemporal) budget constraint.† Keynesian models, by contrast, take a shortcut, assuming a fixed relationship between saving and national income. However, these models shed limited light on the classical questions of macroeconomics: Why are there economic booms and recessions? What generates unemployment? What roles can fiscal and monetary policy play in stabilizing the economy? In trying to render their models tractable, economists neglected many important aspects of the real world. In particular, they assumed away imperfections and frictions in markets for labor, capital, and goods. The ups and downs of the economy were ascribed to exogenous and vague “shocks” to technology and consumer preferences. The unemployed weren’t looking for jobs they couldn’t find; they represented a worker’s optimal trade-off between leisure and labor. Perhaps unsurprisingly, these models were poor forecasters of major macroeconomic variables such as inflation and growth.8 As long as the economy hummed along at a steady clip and unemployment was low, these shortcomings were not particularly evident. But their failures become more apparent and costly in the aftermath of the financial crisis of 2008–9. These newfangled models simply could not explain the magnitude and duration of the recession that followed. They needed, at the very least, to incorporate more realism about financial-market imperfections. Traditional Keynesian models, despite their lack of microfoundations, could explain how economies can get stuck with high unemployment and seemed more relevant than ever. Yet the advocates of the new models were reluctant to give up on them—not because these models did a better job of tracking reality, but because they were what models were supposed to look like. Their modeling strategy trumped the realism of conclusions. Economists’ attachment to particular modeling conventions—rational, forward-looking individuals, well-functioning markets, and so on—often leads them to overlook obvious conflicts with the world around them.” 2 likes
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