The new Rubb/Sumner principles textbook

I’m very pleased to announce that my 5-year project to write a principles textbook is now complete. Macmillan/Worth has just released the new book I co-authored with Steve Rubb, which is aimed at the mainstream principles of economics market.

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Like Hubbard and O’Brien’s principles textbook, it has a business flavor that should make the subject more interesting for many students.  Our book tries to be shorter and more concise, however, as many of today’s students simply don’t have the time to read an 1176 page textbook like H&O.  Ours came in just under 800 pages—with a word count that is probably pretty similar to Mankiw’s relatively concise principles text.  (Ours is actually 100 pages shorter than Mankiw, but each page is a bit bigger.)  This picture shows our new text (in blue) next to Hubbard and O’Brien (in white).
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Don’t be fooled by the business flavor, we still cover all the basics of economics, including important public policy issues such as price controls, externalities, labor, inequality, health care, and fiscal and monetary policy.

This book should be of interest to both monetarist and Keynesian instructors.  Obviously my own views lean more monetarist, but we’ve covered the material to reflect the views of the profession as a whole. Thus there is much more coverage of inflation than NGDP, reflecting the consensus of the profession.  Keynesians will find an optional “aggregate expenditure” chapter containing the Keynesian cross, if they are so inclined.  If I were still teaching I would not cover the Keynesian cross, but would cover the part of the AE chapter that discusses the intuition behind Keynesian economics.  Although I’m not a fan of fiscal stimulus, I believe it’s important for students to understand why these policies are so popular.

We also have the normal mainstream macro chapters, including a three chapter sequence of AS/AD, fiscal policy and monetary policy, as well as a two chapter money sequence that looks first at the basics of how the Fed controls the supply of money, and then the classical theory of inflation (i.e. money and prices in the long run.)  I especially like our money/inflation and economic growth chapters.

In my view, the book is most successful at adding a business flavor in the micro chapters, especially those covering market structure.  I believe students will find those chapters to be especially interesting, with lots of good real world examples.  But we’ve tried to add as many business examples as fit at various spots throughout the book.  Many students take economics because they have an interest in business.

As far as my own views, we’ve sprinkled the “never reason from a price change” concept into several of those chapters, including both S&D and AS/AD.  There’s a brief discussion of monetary offset of fiscal policy in the section that covers issues such as crowding out.  And there is some coverage of the logic behind NGDP targeting toward the end of the macro section.  In monetary policy, we point out that low interest rates can reflect either easy money or a weak economy/low inflation.

But again, I didn’t think it appropriate to use a principles text to try to indoctrinate students into my own views where I have not (yet) been successful in convincing my colleagues.  Students need to begin with the well-established basics.  As a result, readers will occasionally run across statements in the text that conflict with opinions offered in this blog.  That doesn’t worry me at all, indeed it’s appropriate.

For instance, you won’t come across “inflation doesn’t matter, only NGDP matters” in this textbook.  You won’t find “fiscal policy is useless” in this textbook.  Both monetarists and Keynesians should be quite comfortable with the presentation.  When I taught at Bentley, most students were not aware of my views on economics—indeed were just as likely to view me as liberal than as conservative.  The book reflects that balance.

If you do like my views on economics, I’d argue that we do a better job of presenting many macro topics than what you see in the other textbooks.  For instance, our transition from MV=PY to the AS/AD model (using Y = C + I + G) is far more understandable than in most other textbooks. Indeed students would be utterly confused by this transition in many other textbooks (although Cowen and Tabarrok are an excellent exception.)  I also like the way we explain topics such as the quantity theory of money, or the challenges of doing monetary policy when interest rates are zero.  The fiscal chapter includes both supply and demand-side perspectives.  Like some other newer texts, the economic growth chapter emphasizes the importance of good institutions, not just a mechanical model with “labor”, “capital” and “natural resources”.

Toward the end we have an optional chapter on expectations, covering issues such as the Phillips Curve and rational expectations.  I believe we do a particularly good job of explaining the concept of expectations.  At the end of this chapter is a brief section on how the Phillips Curve approach could be applied to NGDP growth instead of inflation (Ignore “FPO”, an editorial note not contained in the final version):

Screen Shot 2018-10-30 at 6.29.31 PMIn terms of level, I suppose it’s in the eye of the beholder.  In my view our book is aimed at the middle of the market—not too difficult, but not dumbed down so much as to be misleading.  Note that the preceding graph comes in a chapter that has already covered the pros and cons of the basic Phillips Curve, with inflation on the vertical axis.

BTW, if I could do a book with no constraints, I’d make it even shorter.  However, textbooks are expensive projects for publishers and you need to address the preferences of the instructors.  They each have topics that they view as essential.



34 Responses to “The new Rubb/Sumner principles textbook”

  1. Gravatar of Alex Alex
    31. October 2018 at 12:03

    Congratulations to you and your co-author!

    Glancing at the Table of Contents and your description seems to show its far more pragmatic than most texts. If I were still teaching, I would use this in a heartbeat (especially for managerial econ and macro).

  2. Gravatar of H_WASSHOI (Maekawa Miku-nyan lover) H_WASSHOI (Maekawa Miku-nyan lover)
    31. October 2018 at 12:42


  3. Gravatar of Kevin Erdmann Kevin Erdmann
    31. October 2018 at 12:51


  4. Gravatar of lysseas lysseas
    31. October 2018 at 13:44

    Yes! Finally!

  5. Gravatar of BJH BJH
    31. October 2018 at 14:06


  6. Gravatar of AC AC
    31. October 2018 at 14:27

    Do you do the AS/AD model the same way that Cowen/Tabarrok does it?

  7. Gravatar of guest guest
    31. October 2018 at 14:58

    > If I were still teaching I would not cover the Keynesian cross

    I find this more than a bit surprising – isn’t the Keynesian cross a good formal description of how what you call the “hot-potato effect” arising from changes in MV might concretely affect PY? (And for sure, I wouldn’t expect such a treatment to conflict with “the established views of the profession” – indeed, both monetarists and Keynesians would likely agree with it.)

  8. Gravatar of ssumner ssumner
    31. October 2018 at 15:00

    Thanks everyone.

    Guest, The Keynesian cross assumes a fixed price level. It doesn’t really say anything about the monetary transmission mechanism.

    It’s misleading to talk about MV “affecting” PY. Indeed MV equals PY.

  9. Gravatar of guest guest
    31. October 2018 at 15:29

    > The Keynesian cross assumes a fixed price level.

    Yes, it also assumes RGDP as the relevant output variable. But arguably, one can simply forgo the assumption of fixed prices and choose NGDP as the relevant “output” variable – or even assume RGDP to be fixed, and recast the whole thing as modeling changes in the price level.

    > Indeed MV equals PY.

    Yes, I was being slightly imprecise. The real question is probably how changes in the money supply and to exogenous determinants of money demand might ultimately affect MV and PY. A Keynesian economist might frame the issue as looking for the “transmission mechanism” of exogenous changes in aggregate expenditure, but formally speaking, the model seems to be pretty much the same.

  10. Gravatar of Lorenzo from Oz Lorenzo from Oz
    31. October 2018 at 15:59

    Yeah! Congrats!

  11. Gravatar of Benjamin Cole Benjamin Cole
    31. October 2018 at 15:59

    Congratulations! I took Econ 101 macro 45 years ago at Berkeley, I got in “A,” and I am still confused about the topic.

  12. Gravatar of George Selgin George Selgin
    31. October 2018 at 17:16

    Congrats, Scott. May it be widely adopted!

  13. Gravatar of Cloud Cloud
    31. October 2018 at 19:18

    Congrats! The size seems very good!

  14. Gravatar of mbka mbka
    31. October 2018 at 20:36

    Excellent and long overdue 😉

    Congrats Scott – may you find an ever wider audience!

  15. Gravatar of ssumner ssumner
    31. October 2018 at 21:02

    Thanks everyone.

    Guest, I’d say once you move to a non-fixed price level, it makes sense to replace the Keynesian cross with AS/AD.

  16. Gravatar of Todd Kreider Todd Kreider
    31. October 2018 at 22:06

    And another “Congratulations”

  17. Gravatar of guest guest
    31. October 2018 at 23:40

    I’m all for AS/AD! It’s just that the KC seems to be about a rather different dynamic, one that’s very much related to “hot-potato-like” transmission dynamics. (I mean, part of the problem is that the conventional explanation of the KC, with RGDP as output, is, I think, quite bad and misleading. It doesn’t matter much if you add a caveat about fixed-price assumptions, people will forget it all the time. So it would be really nice to just tweak this model to make it say something that’s undoubtedly true and relevant, but in a way that everyone can agree with and that in fact preserves the underlying truth of what the earlier model is trying to show. But perhaps that just isn’t going to happen in a mass-market textbook.)

  18. Gravatar of A A
    1. November 2018 at 04:35

    Is your AS/AD model the same as in Cowen/Tabarrok? Most textbooks don’t do it that way, I think it’s better and lends itself quite easily to talking about NGDP targeting while still teaching the standard Macro material.

  19. Gravatar of Patrick R. Sullivan Patrick R. Sullivan
    1. November 2018 at 05:16

    Good things come to those who wait. I look forward to a world where everyone’s economic prior assumptions includes that interest rates are not the price[s] of money.

  20. Gravatar of ssumner ssumner
    1. November 2018 at 07:47

    AC and A, I agree that their approach is much better, but we got too much pushback from “the market”. Instructors strongly preferred the old way

    If I could have written a textbook with no market considerations, it would have been radically different from the one we wrote.

    However, I do think our NGDP Phillips Curve puts us a step ahead of our competition on that front.

  21. Gravatar of Arilando Arilando
    1. November 2018 at 08:51

    What is the Cowen/Tabarrok AS/AD model?

  22. Gravatar of A. A.
    1. November 2018 at 10:33

    @Arilando, see here:

    It defines AD in terms of MxV as opposed to the components of spending, which is the usual approach.


    I’d love to read your “radically different” Macro book for a general audience. Get to work!

  23. Gravatar of Matthew Waters Matthew Waters
    1. November 2018 at 10:53


    I’m interested in how you do, or if you do, P=MC and P=AC. As I’ve done real-world business analysis and went to business school, I could never figure out P=MC. The last thing a business ever wants to do is have a price equal to marginal cost.

  24. Gravatar of Rajat Rajat
    1. November 2018 at 11:27

    Congratulations! Do you have another book in the pipeline that is a collection of your blog posts?

  25. Gravatar of Todd Kreider Todd Kreider
    1. November 2018 at 18:19

    “If I could have written a textbook with no market considerations, it would have been radically different from the one we wrote.”

    In what way?

  26. Gravatar of Michael Sandifer Michael Sandifer
    1. November 2018 at 18:37

    Congrats. Now more students can actually understand the material taught.

  27. Gravatar of H_WASSHOI (Maekawa Miku-nyan lover) H_WASSHOI (Maekawa Miku-nyan lover)
    2. November 2018 at 02:40

    How much the book? (asking price)

  28. Gravatar of ssumner ssumner
    2. November 2018 at 08:18

    A, I’ve written it and am looking for a publisher. It’s not a textbook.

    Matthew, You said:

    “The last thing a business ever wants to do is have a price equal to marginal cost.”

    If they are a profit maximizing competitive firm (price taker) then they most certainly do want to set P=MC, any other MC would be insane.

    If they have market power then they want to set MR=MC.

    Rajat, It’s not a collection, but it’s based on the blog. It’s written and looking for a publisher. Hopefully it will be out in 2019.

    Todd, I would have gotten rid of lots of macro material: Keynesian cross, Y = C + I + G approach, detailed coverage of price indices, Solow growth model. Monetary policy would have mostly ignored interest rates. There’d be little coverage of inflation and lots of coverage of NGDP growth. AD would equal MV, etc. Much more coverage of macro history, and history of thought.

    Wasshoi, I don’t know. I believe there will be a cheaper electronic option, as these books tend to be expensive. Any commenter who comes to my house can get a free signed copy, (except obnoxious alt-righters.) 🙂

  29. Gravatar of John Hall John Hall
    2. November 2018 at 09:08


    I bet the flight to CA is cheaper than buying book books!

  30. Gravatar of Mario Mario
    4. November 2018 at 09:19

    Scott, i’m a undergrad from Brazil, and i’ll probably buy your book!
    For now, i’ll ask for a little taste of it. Why doesn’t low interest rates mean easy money? Thks

    *maybe i’ve posted this same comment in another post of yours, my bad*

  31. Gravatar of W. Peden W. Peden
    4. November 2018 at 11:49

    Congratulations, Scott!

  32. Gravatar of Bob Murphy Bob Murphy
    5. November 2018 at 08:20

    Congratulations Scott, that looks like it was a ton of work! I know I have submitted my fair share of snarky comments over the years, but I am sure your text does a good job of framing the issues in a more useful way than the previous generation of texts.

  33. Gravatar of Christian List Christian List
    5. November 2018 at 12:00

    Congrats, Scott!

    Funnily, I can already find the book on the Japanese version of Amazon, but not on the American and European version. It seems to cost ¥ 8,976 or about $80.

  34. Gravatar of ssumner ssumner
    6. November 2018 at 09:47

    Mario, If you are from Brazil this should be easy to explain. Imagine a highly expansionary monetary policy that leads to hyperinflation. This will also be associated with very high interest rates.

    Monetary policy is just one of many factors that impact interest rates, and far from the most important.

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