My Fantastic Four Favorite Books of the Year

With the economy slowing, these selections on the importance of growth are as timely as today's headlines.

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These are my favorite economics books of 2007. Now, some of them did not come out in 2007, but I read them in 2007—and it's my blog, so I can do what I want, brother. Here they are, in no particular order:

1) Prophet of Innovation: Joseph Schumpeter and Creative Destruction by Thomas McCraw (2007). Who was the greatest economist of the 20th century, Joseph Schumpeter or Milton Friedman? I don't have to choose, so I won't. But this compelling biography of the man who created the intellectual framework for understanding the critical role that entrepreneurship and innovation play in economic growth certainly makes the case that Schumpeter deserves to be as well known to the general public as Friedman is.

2) American Abundance by Lawrence Kudlow (1997). This entertaining-as-heck compilation of essays, columns, and speeches by the supply-side economist and host of CNBC's highly rated Kudlow & Company—and definite FOB (friend of the blog)—is still a must-read a decade after it came out. If you want to understand why the U.S. economy has been booming for 25 years, Kudlow masterfully explains it all.

3) Rational Exuberance: Silencing the Enemies of Growth by Michael Mandel (2004). The economist and BusinessWeek columnist is one of the more interesting and original thinkers out there, and this book on what drives economic growth and why growth is important is a great distillation of his style and thinking. If Paul Krugman is the one liberal economics columnist you read, stop and read Mandel instead. Right now. Today.

4) The Moral Consequences of Economic Growth by Benjamin Friedman (2006). Economic growth is both a materialistic and moral imperative, the Harvard economist persuasively argues. When our standard of living rises, so does the open and altruistic nature of our society. An important book and argument for the early 21st century.