Books

Some Books that Significantly Influenced the way I Think about Economic Problems

Allen, Roy G. D. 1968. Macro-Economic Theory: A Mathematical Treatment. London: Macmillan. [I found this book quite useful for helping me to translate many well-known macroeconomic models into a system dynamics format.]
Baumol, William J. 1959 (1951). Economic Dynamics. 2nd Edition. New York: The Macmillan Company. [Baumol put me on the path to dynamic economic modeling.]
Boulding, Kenneth E. 1950. A Reconstruction of Economics. New York: John Wiley & Sons, Inc. [In this book, Boulding created a balance sheet (stock-flow) approach to economics that is wholly consistent with system dynamics and heterodox economics. In late 1984 I randomly bumped into Boulding at the American Economic Association meetings. He was trying to find the registration booth and I volunteered to clear a path through the crowd at the Dallas Convention Center and lead him to the booth. We had a nice chat about dynamic systems. Very nice guy.]
Daly, Herman E. 1991. Steady State Economics. 2nd Edition. Washington, D.C.: Island Press. [Daly was one of the first traditionally trained economists I encountered who thought like a system dynamicist.]
Davidson, Paul. 1972. Money and the Real World. New York: John Wiley and Sons, Inc. [Paul is the co-founder of the Journal of Post Keynesian Economics. He lectured in one of my graduate classes in 1980. After his talk I ran out and bought this book.]
Eichner, Alfred S. 1979. A Guide to Post Keynesian Economics. White Plaines, NY: M. E. Sharpe, Inc. [A collection of papers that outlines the tenets of the Post Keynesian school of economic thought, as it existed in the late 1970s. Still a good read.]
Eichner, Alfred S. 1986. The Macrodynamics of Advanced Market Economies. Armonk, NY: M.E. Sharpe, Inc. [Eichner's magnum opus. If you read many of Eichner's books, you'd swear that he was a system dynamicist.]
Forrester, Jay W. 1961. Industrial Dynamics. Cambridge, MA: The MIT Press. [The "Bible" of system dynamics. Still an excellent read that is loaded with insights that are applicable today. Jay is a good friend and mentor who, along with John Sterman and Randy Wray, significantly influenced how I think about economic problems.]
Forrester, Jay W. 1975. Collected Papers of Jay W. Forrester. Cambridge, MA: The MIT Press. [Nice summary of Jay's ideas about system dynamics in general, and the World Dynamics and Urban Dynamics projects in particular.]
Friedman, Milton. 1962. Capitalism and Freedom. Chicago, IL: University of Chicago Press. [A classic, loaded with interesting ideas and arguments.]
Gleick, James. 1988. Chaos: Making a New Science. New York: Penguin Books. [An accessible read that teaches about chaos, dynamic modeling, and nonlinear systems, and chronicles the intellectual odysseys traversed by some of the early chaos researchers.]
Gruchy, Allen G. 1987. The Reconstruction of Economics: An Analysis of the Fundamentals of Institutional Economics. New York: Greenwood Press. [At a conference in the late 1980s, Professor Gruchy told me he thought the application of system dynamics to institutional economics was a great idea and to "go for it."]
Hamilton, David B. 1999 (1953). Evolutionary Economics: A Study of Change in Economic Thought. New Brunswick, NJ: Transaction Publishers. [Hamilton first got me thinking about the notion of evolutionary change in economic systems.]
Harcourt, Geoffrey C. 1972. Some Cambridge Controversies in the Theory of Capital. Cambridge, UK: Cambridge University Press. [Excellent summary of the Cambridge controversies...University of Cambridge, UK versus MIT (Cambridge, MA, USA). Geoff is an excellent guy...very friendly and funny.]
Heilbronner, Robert L. 2000 (1953). The Worldly Philosophers. London: Penguin Books. [Another classic that everyone who is interested in economics should read.]
Jones, Hywel G. 1976. An Introduction to Modern Theories of Economic Growth. McGraw-Hill Book Company. [I finally understood much of basic growth theory after reading this wonderful book.]
Keen, Steve. 2001. Debunking Economics. Annandale NSW, Australia: Pluto Press Australia Ltd. [Professor Keen thinks (and models) like a system dynamicist and lays the wood to neoclassical economics in this book. He's an excellent guy and a supporter of the use of system dynamics in heterodox economics.]
Keynes, John Maynard. 1936. The General Theory of Employment, Interest and Money. London: Macmillan. [Okay, I'll admit it. I've never read the General Theory cover-to-cover like a novel. Instead, I've read it in fits and starts over the last 30 years. I'm currently trying to understand and model (with agent-based modeling) what Keynes said in Chapter 12 about the formation of long-run expectations.]
Kindleberger, Charles P. 1996. Manias, Panics and Crashes: A History of Financial Crises. 3^rd edition. New York: John Wiley & Sons, Inc. [One of the "Bibles" that explains speculative bubbles.]
Kmenta, Jan. Elements of Econometrics. 2nd Edition. Ann Arbor, MI: University of Michigan Press. [This book put me on the path to truly understanding how econometric research is supposed to be conducted.]
Leijonhufvud, Axel. 1966. On Keynesian Economics and the Economics of Keynes. New York: Oxford University Press. [This book first alerted me to the argument that the standard textbook presentation of what Keynes said, may not exactly be what Keynes really said. Of particular note is that, in this book, Leijonhufvud argues that cybernetics ["a general theory of dynamic systems" (page 367)] "was the direction in which Keynes' work pointed" (page 366) and was "the Keynesian revolution which did not come off" (page 367). Leijonhufvud later become interested in agent-based modeling.]
Lerner, Abba P. 1944. The Economics of Control. New York: The Macmillan Company. [In this brilliant book, Lerner lays out (among other things) his theory of functional finance. Keynes thought very highly of this book.]
Lerner, Abba P. 1951. Economics of Employment. New York: McGraw-Hill Book Company, Inc. [Much more from Lerner on functional finance. He also discusses the importance of stocks and flows in chapter 4.]
Lerner, Abba P. and David C. Colander. 1980. MAP: A Market Anti-Inflation Plan. New York: Harcourt Brace Jovanovich, Inc. [During the 1970s Lerner began to worry that, if his principles of functional finance were followed, inflation might result as full employment was approached. In this book, he and David Colander outline a plan to prevent this from happening.]
Marglin, Stephen A. 1984. Growth, Distribution and Prices. Cambridge, MA: Harvard University Press. [This book showed me, for the first time, how you could use mathematical modeling to present the same basic model from a variety of perspectives (neoclassical, Post Keynesian, Marxist). The math enables you to see precisely how the assumptions change (or not) from theory to theory.]
Meadows, Donnella H., Dennis L. Meadows, Jorgen Randers and William W. Behrens. 1972. The Limits to Growth. New York: Universe Books. [This book was the first to get me thinking about the implications of economic systems that grow exponentially in a finite (limited) world.]
Minsky, Hyman P. 1975. John Maynard Keynes. New York: Columbia University Press. [Minsky is probably best described as a "financial Keynesian."]
Minsky, Hyman P. 1982. Can "It" Happen Again? Essays on Instability and Finance. Armonk, NY: M. E. Sharpe, Inc. [The "It" is another Great Depression.]
Minsky, Hyman P. 1986. Stabilizing an Unstable Economy: Why a Stock Market Crash Need Not Lead to Another Great Depression. New Haven, CT: Yale University Press. [An excellent overview of Minsky's theory of financial instability (hedge, speculative and Ponzi firms, etc.) and how big government and a big bank can help prevent another Great Depression.]
Robinson, Joan V. 1956. The Accumulation of Capital. London: Macmillan. [Mrs. Robinson is my favorite economist and this is her magnum opus. I met her in 1980 when she lectured in my first graduate macroeconomic course (I remember that she became real irritated by a question about equilibrium). Most of her views on macroeconomic dynamics are right on.]
Schelling, Thomas C. 1978. Micromotives and Macrobehavior. New York: W. W. Norton and company. [Schelling did some early and brilliant work on agent-based modeling and behavioral economics. I taught his son graduate statistics.]
Shiller, Robert J. 2000. Irrational Exuberance. New York: Broadway Books. [Great read about the psychological (and other) factors that lead to speculative behavior in markets.]
Sterman, John D. 2000. Business Dynamics: Systems Thinking and Modeling for a Complex World. Boston: Irwin McGraw-Hill. [This is the best system dynamics book in the world. I love it b/c it is essentially a cleaned-up and expanded version of the notes I took in John's two system dynamics courses at MIT (15.874 and 15.875). It also nicely integrates a lot of the well-known research that has been done over the years in the field of system dynamics. If you want to know how to do system dynamics properly, start here.]
Wolfson, Martin H. 1994. Financial Crises: Understanding the Postwar U.S. Experience. 2^nd edition. Armonk, NY: M. E. Sharpe, Inc. [Marty, a Notre Dame economics professor, outlines a comprehensive theory of financial business cycles, which he supports with lots of data.]
Wray, L. Randall. 1998. Understanding Modern Money. Northamption, MA: Edward Elgar. [This, along with Mosler's Soft Currency Economics, is the last piece of the puzzle for creating a Post Keynesian-Institutionalist-System Dynamics model of the economy. Randy has significantly influenced how I think about macroeconomics.]

Trading & Investing Books You Should Really Read

Biographies

Cramer, James G. 2002. Confessions of a Street Addict. New York: Simon and Schuster. [Cramer's autobiography.]
Elder, Alexander. 2006. Entries and Exits: Visits to Sixteen Trading Rooms. New York: John Wiley & Sons, Inc. [Well known trader and trading coach Dr. Elder interviews sixteen of his trading colleagues, some of whom are his former students, and records exactly what each of them see and do as they make two trades. He then analyzes the trades. Quite an interesting read.]
Lefevre, Edwin. 1994 (1923). Reminiscences of a Stock Operator. Hoboken, NJ: John Wiley and Sons. [First published in 1923, this is the fictionalized biography of Jesse Livermore. Cramer claims that it's Livermore's autobiography, written under the pen name Lefevre.]
Livermore, Jesse. 2001. How to Trade in Stocks. New York: McGraw-Hill, Inc. [Livermore's own words with commentary and interpretation by Richard Smitten. Includes Livermore's 1940 "market key theory."]
Ruggiero, Jr., Murray A. and Adrienne Laris Toghraie. 1999. Traders' Secrets: Psychological and Technical Analyses. East Haven, CT: Ruggiero Press. [Murray & Adrienne interview fourteen traders. For each trader Murray provides an analysis of how they trade technically and Adrienne provides a psychological profile.]
Schwager, Jack D. 1989. Market Wizards: Interviews with Top Traders. New York: New York Institute of Finance. [This is Schwager's original book. It's kind of an "In Search of Excellence" for traders. In the end, Schwager tries to identify the traits that are common to successful traders.]
Schwager, Jack D. 1992. The New Market Wizards: Conversations with America's Top Traders. New York: John Wiley & Sons, Inc. [More trader interviews from Jack Schwager.]
Schwager, Jack D. 2003. Stock Market Wizards: Interviews with America's Top Stock Traders. New York: Harper-Collins Publishers, Inc. [Schwager interviews another thirteen successful traders.]

Comprehensive Overviews of Trading

Griffis, Michael and Lita Epstein. 2004. Trading for Dummies. Indianapolis, IN: Wiley Publishing, Inc. [Another book in the "Dummy" series, but it has lots of good, basic, information.]
Kansas, Dave. 2005. The Wall Street Journal Complete Money & Investing Guidebook. New York: Three Rivers Press, Inc. [Easy and quick to read. It provides an excellent, sweeping overview of the world of investing in plain English.]
Parness, Michael P. 2002. Rule the Freakin' Markets. New York: St. Martins Griffin. [Interesting read. Parness is the founder of TrendFund.com]
Raiman, Melvin L. 2003. Wizetrader's Guide to Effective Day Trading. [This is a free e-book in which Mel provides lot of tips on day trading. Although he no longer uses Wizetrade (since creating the Precision Trading System), his e-book still is loaded with excellent information for any trader.]

Fundamental Analysis

Cramer, James G. 2005. Real Money: Sane Investing in an Insane World. New York: Simon and Schuster. [Cramer outlines, in plain English, his methods for trading and investing, which are quite interesting. If you watch his TV show and/or listen to his radio show, this book will help you understand where he's coming from. Boo-yah!]
Cunningham, Lawerence A. 2001. The Essays of Warren Buffet: Lessons for Corporate America. New York: Cardozo Law Review. [An organized collection of Warren Buffet's well-known letters to the shareholders of Berkshire Hathaway, which outline his investing ideas and business practices.]
Fisher, Philip A. 1957. Common Stocks and Uncommon Profits and Other Writings. New York: John Wiley and Sons, Inc. [An investment classic with a preface and introduction by Phil Fisher's son. One of Warren Buffet's recommended reads.]
Graham, Benjamin. 1949. The Intelligent Investor. New York: HarperCollins Publishers, Inc. [According to Warren Buffet this is "by far the best book on investing ever written."]
Graham, Benjamin and David L. Dodd. 1934. Security Analysis. New York: McGraw-Hill, Inc. [Warren Buffet has always claimed that this book is the key to his thinking. The authors teach you how to analyze a company and come up with its intrinsic value. If the firm's shares are trading at a price lower than its intrinsic value, they're worth purchasing. Don't let the date of publication fool you. It's been through five editions and the consensus is that the first edition is the best and still relevant.]
O'Neil, William J. 2002. How to Make Money in Stocks: A Winning System in Good Times of Bad. Third Edition. New York: McGraw-Hill, Inc. [This is my favorite book on fundamental investing. O'Neil is the creator of the CANSLIM method of picking stocks. CANSLIM stocks are likely to go way up in price, but have not yet begun their move. Investors Business Daily and investors.com are devoted to helping investors identify CANSLIM stocks.]

Inter-Market Analysis

Murphy, John J. 1991. Intermarket Technical Analysis: Trading Strategies for the Global Stock, Bond, Commodity, and Currency Markets. Hoboken, NJ: John Wiley & Sons, Inc. [Path breaking book that lays out a compelling case for the interrelatedness of global financial markets and that essentially created a new branch of technical analysis. In the book, Murphy argues that technical traders must take intermarket correlations into account when trading.]
Murphy, John J. 1996. The Visual Investor: How to Spot Market Trends. New York: John Wiley & Sons, Inc. [In this book Murphy focuses on the use of technical tools for sector analysis, primarily applied to mutual fund data.]
Murphy, John J. 2004. Intermarket Analysis: Profiting from Global Market Relationships. Hoboken, NJ: John Wiley & Sons, Inc. [An update to Murphy's 1991 Intermarket Technical Analysis book, in which he incorporates the economic history of the 1990s and early 2000s. If you have to choose between Murphy's 1991 book and this one, read this one. It's brilliant.]

Market Breadth

Morris, Gregory L. 2006. Market Breadth Indicators: How to Analyze and Evaluate Market Direction and Strength. New York: McGraw-Hill, Inc. [Excellent overview of market breadth indicators and their use and interpretation. Remember, when analyzing how a stock will move it's Market => Sector => Stock.]

Options

Cohen, Guy. 2005. Options Made Easy. 2^nd Edition. New York: Prentice Hall. [The easiest book on understanding options I have come across. Lots of practice guides for fundamental and technical trading as well. Excellent book.]
Morris, Virginia B. and Bess Newman. 2004. An Investor's Guide to Trading Options. New York: Lightbulb Press, Inc. [Excellent overview of options trading. A quick and easy read in plain English. If I knew nothing about options, I'd start here.]
Thomsett, Michael C. 2003. Getting Started in Options. Fifth Edition. Hoboken, NJ: John Wiley and Sons. [A well-known and excellent introduction to options trading.]

Sector Rotation

Stovall, Sam. 1995. Standard & Poor's Guide to Sector Investing. McGraw-Hill. [A Sam Stovall classic.]
Stovall, Sam. 1996. Sector Investing. McGraw-Hill. [This is the "Bible" of sector investing.]

Technical Analysis

Murphy, John J. 1999. Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications. New York: New York Institute of Finance. [The "Bible" of technical analysis from one of the world's foremost technical trading gurus. A must read.]
Sperandeo, Victor. 1993. Trader Vic - Methods of a Wall Street Master. New York: John Wiley & Sons, Inc. [Excellent presentation of trading fundamentals. Trader Vic taught me how to draw a proper trend line!]
Sperandeo, Victor. 1997. Trader Vic II - Principles of Professional Speculation. New York: John Wiley & Sons, Inc. [Trader Vic's sequel to his Methods of a Wall Street Master.]

Trading Psychology

Douglas, Mark. 1990. The Disciplined Trader. New York: Penguin Putnam. [The psychology of disciplined trading. Buy low, sell high. How hard can it be? Pretty dang hard!]
Tharp, Van. 2007. Trade Your Way to Financial Freedom. Second Edition. New York: McGraw-Hill, Inc. [A classic. This book provides a sweeping overview of how to set-up a trading system. It includes a lot of information on trader psychology as Dr. Tharp, a Ph.D. psychologist, specializes in modeling the traits of a successful trader.]

Trading Systems

Bysshe, Geoff. 2004. Trading the 10 O'Clock Bulls. [This is a free e-book written by Geoff Bysshe at DataView. Geoff is one of the creators of HotScans and MarketGauge. In this book, Geoff teaches you an effective day trading strategy that works in harmony with some scans in HotScans.]
Tharp, Van. 2007. Trade Your Way to Financial Freedom. Second Edition. New York: McGraw-Hill, Inc. [A classic. This book provides a sweeping overview of how to set-up a trading system. It includes a lot of information on trader psychology as Dr. Tharp, a Ph.D. psychologist, specializes in modeling the traits of a successful trader.]