The aim of this article is to cover the books in economic, mathematical economics and econometrics, at a level suitable for graduate students or final year undergraduates specialising in economics and many more. There are four key subject areas that you’ll need to be very familiar with to succeed in economics.
1. Microeconomics / Economic Theory
Microeconomics is the study of what is likely to happen when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production. Individual actors are often grouped into microeconomic subgroups, such as buyers, sellers, and business owners. Even if you plan to study a subject which is closer to Macroeconomics or Econometrics, it is important to have a good grounding in Microeconomic Theory. A lot of work in subjects such as Political Economy and Public Finance is rooted in “micro-foundations” so you’ll help yourself immensely in these courses if you’re already familiar with high-level microeconomics.
What Microeconomics Book You should Use
- Intermediate Microeconomics: A Modern Approach by Hal R. Varian.
- For more advance microeconomics book I would recommend Microeconomic Analysis by Hal R. Varian.
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Macroeconomics analyzes all aggregate indicators and the microeconomic factors that influence the economy. Government and corporations use macroeconomic models to help in formulating of economic policies and strategies. Giving advice on Macroeconomics books is a lot more difficult because Macroeconomics is taught so differently from school to school.
Macroeconomics Book You should Use
- Advanced Macroeconomics by David Romer
- Economic Dynamics by Nancy L. Stokey and Robert E. Lucas Jr.
- Numerical Methods in Economics by Kenneth L. Judd
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Econometrics is the application of statistical methods to economic data in order to give empirical content to economic relationships. More precisely, it is “the quantitative analysis of actual economic phenomena based on the concurrent development of theory and observation, related by appropriate methods of inference”. Econometrics relies on techniques such as regression models and null hypothesis testing.
Econometrics Book You should Use
- Essentials of Econometrics by Damodar N. Gujarati
- Econometric Analysis by William H. Greene
- Estimation and Inference in Econometrics by Russell Davidson and James G. MacKinnon
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Having a good understanding of mathematics is crucial to success in economics. Most undergraduate students are often shocked by how mathematical graduate programs in economics. The math goes beyond basic algebra and calculus, as it tends to be more proofs, such as “Let (x_n) be a Cauchy sequence. Show that if (X_n) has a convergent subsequence then the sequence is itself convergent”. At first, it is hard but there’s no reason why someone with an economics background can not succeed.
Mathematics Books you should read:
- Mathematics for Economists written by Carl P. Simon and Lawrence Blume
- If you’re uncomfortable on basic calculus I recommend you Multivariable Calculus by James Stewart
- If you’re uncomfortable with proofs, you may want to pick up The Art and Craft of Problem Solving by Paul Zeitz
- The Elements of Real Analysis by Robert G. Bartle
- A First Course in Optimization Theory by Rangarajan K. Sundaram
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