Accelerating energy innovation could be an important part of an effective response to the threat of climate change. Written by a stellar group of experts in the field, this book complements existing research on the subject with an exploration of the role that public and private policy have played in enabling—and sustaining—swift innovation in a variety of industries, from agriculture and the life sciences to information technology. Chapters highlight the factors that have determined the impact of past policies, and suggest that effectively managed federal funding, strategies to increase customer demand, and the enabling of aggressive competition from new firms are important ingredients for policies that affect innovative activity.
This book could be called “The Intelligent Person’s Guide to Economics.” The title expresses Duncan Foley’s belief that economics at its most abstract and interesting level is a speculative philosophical discourse, not a deductive or inductive science.
Modern financial markets offer the real world's best approximation to the idealized price auction market envisioned in economic theory. Nevertheless, as the increasingly exquisite and detailed financial data demonstrate, financial markets often fail to behave as they should if trading were truly dominated by the fully rational investors that populate financial theories. These markets anomalies have spawned a new approach to finance, one which as editor Richard Thaler puts it, "entertains the possibility that some agents in the economy behave less than fully rationally some of the time." Advances in Behavioral Finance collects together twenty-one recent articles that illustrate the power of this approach. These papers demonstrate how specific departures from fully rational decision making by individual market agents can provide explanations of otherwise puzzling market phenomena. To take several examples, Werner De Bondt and Thaler find an explanation for superior price performance of firms with poor recent earnings histories in the tendencies of investors to overreact to recent information. Richard Roll traces the negative effects of corporate takeovers on the stock prices of the acquiring firms to the overconfidence of managers, who fail to recognize the contributions of chance to their past successes. Andrei Shleifer and Robert Vishny show how the difficulty of establishing a reliable reputation for correctly assessing the value of long term capital projects can lead investment analysis, and hence corporate managers, to focus myopically on short term returns. As a testing ground for assessing the empirical accuracy of behavioral theories, the successful studies in this landmark collection reach beyond the world of finance to suggest, very powerfully, the importance of pursuing behavioral approaches to other areas of economic life. Advances in Behavioral Finance is a solid beachhead for behavioral work in the financial arena and a clear promise of wider application for behavioral economics in the future.
This volume presents innovative research on issues of importance to the well-being of older persons: labor market behavior, health care, housing and living arrangements, and saving and wealth.
Specific topics include the effect of labor market rigidities on the employment of older workers; the effect on retirement of the availability of continuation coverage benefits; and the influence of the prospective payment system (PPS) on rising Medicare costs. Also considered are the effects of health and wealth on living arrangement decisions; the incentive effects of employer-provided pension plans; the degree of substitution between 401(k) plans and other employer-provided retirement saving arrangements; and the extent to which housing wealth determines how much the elderly save and consume.
Two final studies use simulations that describe the implications of stylized economic models of behavior among the elderly. This timely volume will be of interest to anyone concerned with the economics of aging.
In the past twenty years, economic policy in Latin America has veered toward neoliberalism, or market friendliness. State interventions in the economy were cut back in many areas, in the form of reductions in fiscal deficits; privatization of public enterprises; reductions of import quotas and tariffs and export subsidies; removal of barriers to foreign capital flow; and increased faith in the private sector and market processes.
This book offers an intellectual and historical background for these policy choices, specifically in Argentina, Brazil, Chile, Colombia, Mexico, and Peru. The contributors detail the structural reform and economic policies in Latin America and discuss the various and often contradictory effects neoliberalism, such as fluctuating growth rates and saving-investment balances, worsened corruption, growth of exports, falling wages, and rising unemployment. In addition, each case study forecasts the effects of neoliberal policies on future growth and income distribution in the respective countries. Finally, it offers policy alternatives to neoliberalism.
The essays in this volume are: an introduction by Lance Taylor; "The Argentine Experience with Stabilization and Structural Reform," by José María Fanelli and Roberto Frenkel; "Opening, Stabilization, and Macroeconomic Sustainability in Brazil," by Edward Amadeo, "An Ongoing Structural Transformation: The Colombian Economy, 1986-96," by José Antonio Ocampo; "Economic Reforms, Stabilization Policies, and the 'Mexican Disease,'" by Nora Claudia Lustig and Jaime Ros; and "Structural Reforms and Macroeconomic Policy in Peru: 1990-96," by Oscar Dancourt.
Lance Taylor is the Arnhold Professor of International Cooperation and Development, New School for Social Research.
Are Thomas Piketty’s analyses of inequality on target? Where should researchers go from here in exploring the ideas he pushed to the forefront of global conversation? In After Piketty, a cast of economists and other social scientists tackle these questions in dialogue with Piketty, in what is sure to be a much-debated book in its own right.
"Robert E. Lane is one of the most prominent and distinguished critics of both the human impact of market economies and economic theory, arguing from much research that happiness is more likely to flow from companionship, enjoyment of work, contribution to society, and the opportunity to develop as a person, than from the pursuit of wealth and the accumulation of material goods in market economies. This latest work playfully personalizes the contrast through a dialogue between a humanistic social scientist, Dessi, and a market economist, Adam. It is all too rare to have the two sides talking to each other. Moreover, in Lane's witty and literate hands, it is an open-minded and balanced conversation, in which neither side has all the answers. His unparalleled grasp of interdisciplinary social scientific knowledge is brought to bear on the largest questions of human life: What genuinely makes people happy? How should human society be organized to maximize the quality of human lives?"
--David O. Sears, Professor of Psychology and Political Science, UCLA
"Lane's deep knowledge of the sources of human happiness enables him to develop a powerful critique of economic theory."
---Robert A. Dahl, Sterling Professor Emeritus of Political Science, Yale University
Robert E. Lane is the Eugene Meyer Professor Emeritus of Political Science at Yale University. His previous publications include The Loss of Happiness in Market Democracies (2000) and The Market Experience (1991).
Although it would be premature to presume to identify the exact repercussions of the current economic crisis, it is clear that it will have profound effects in the political, economic, and social spheres. Written in the midst of the deepest economic crisis since the Great Depression, Aftershocks contains twenty-four essays—based on interviews with scholars, prominent European politicians, and leading figures from business and banking—that reflect on the origins of the crisis as well as the possible social, economic, and political transformations it may engender. Among the many contributors are Barry Eichengreen, Tony Atkinson, David Soskice, Nancy Birdsall, Amitai Etzioni, Helmut Schmidt, and Jacques Delors.
Alongside unprecedented improvements in longevity and material well-being, the twentieth century saw the rise of fascism and communism and a second world war followed by a cold war. Governments with market economies won the battle against these competing systems by combining growth and efficiency with greater equality of opportunity and outcome.
Edited by Edward L. Glaeser University of Chicago Press, 2010 Library of Congress HC79.D5A33 2010 | Dewey Decimal 338.87
When firms and people are located near each other in cities and in industrial clusters, they benefit in various ways, including by reducing the costs of exchanging goods and ideas. One might assume that these benefits would become less important as transportation and communication costs fall. Paradoxically, however, cities have become increasingly important, and even within cities industrial clusters remain vital.
Agglomeration Economics brings together a group of essays that examine the reasons why economic activity continues to cluster together despite the falling costs of moving goods and transmitting information. The studies cover a wide range of topics and approach the economics of agglomeration from different angles. Together they advance our understanding of agglomeration and its implications for a globalized world.
The population base in both the United States and Japan is growing older and, as those populations age, they provoke heretofore unexamined economic consequences. This cutting-edge, comparative volume, the third in the joint series offered by the National Bureau of Economic Research and the Japan Center for Economic Research, explores those consequences, drawing specific attention to four key areas: incentives for early retirement; savings, wealth, and asset allocation over the life cycle; health care and health care reform; and population projections.
Given the undeniable global importance of the Japanese and U.S. economies, these innovative essays shed welcome new light on the complex correlations between aging and economic behavior. This insightful work not only deepens our understanding of the Japanese and American economic landscapes but, through careful examination of the comparative social and economic data, clarifies the complex relation between aging societies, public policies, and economic outcomes.
Agricultural yields have increased steadily in the last half century, particularly since the Green Revolution. At the same time, inflation-adjusted agricultural commodity prices have been trending downward as increases in supply outpace the growth of demand. Recent severe weather events, biofuel mandates, and a switch toward a more meat-heavy diet in emerging economies have nevertheless boosted commodity prices. Whether this is a temporary jump or the beginning of a longer-term trend is an open question. Agricultural Productivity and Producer Behavior examines the factors contributing to the remarkably steady increase in global yields and assesses whether yield growth can continue. This research also considers whether agricultural productivity growth has been, and will be, associated with significant environmental externalities. Among the topics studied are genetically modified crops; changing climatic factors; farm production responses to government regulations including crop insurance, transport subsidies, and electricity subsidies for groundwater extraction; and the role of specific farm practices such as crop diversification, disease management, and water-saving methods. This research provides new evidence that technological as well as policy choices influence agricultural productivity.
Allocation of Income within the Household develops an important new economic model of income distribution within the family, one that attempts to determine which family characteristics affect spending patterns. Professors Lazear and Michael base their work on an analysis of the 1972-73 Consumer Expenditure Survey and test their conclusions against the 1960-61 survey to verify the persistence of the effects discovered. They find, for example, that the average household spends $38 per child for every $100 spent per adult and that the level of relative and absolute expenditure on the child rises with the level of education of the head of the household.
Lazear and Michael also explore the implications their study may hold for the process of determining child support payments in households that dissolve. They argue that, unless the spending of every dollar can be monitored, alimony cannot be disentangled from child support. They also develop several criteria by which income might be distributed among family members, and, using one of those criteria, they present a series of tables that suggest the appropriate payment from one parent to another given family size, structure, and income level. Their model is particularly useful because it takes account of the ways other family members who were not part of the original household may contribute income to the new household. Other issues considered include the appropriate way to deal with children with special needs and the timing of transfer payments.
Presents a collection of papers by economists theorizing on the roles of altruism and morality versus self-interest in the shaping of human behavior and institutions. Specifically, the authors examine why some persons behave in an altruistic way without any apparent reward, thus defying the economist's model of utility maximization. The chapters are accompanied by commentaries from representatives of other disciplines, including law and philosophy.
First published in French in 1979, “The Ambivalence of Scarcity” was a groundbreaking work on mimetic theory. Now expanded upon with new, specially written, and never-before-published conference texts and essays, this revised edition explores René Girard’s philosophy in three sections: economy and economics, mimetic theory, and violence and politics in modern societies. The first section argues that though mimetic theory is in many ways critical of modern economic theory, this criticism can contribute to the enrichment of economic thinking. The second section explores the issues of nonviolence and misrecognition (méconnaissance), which have been at the center of many discussions of Girard’s work. The final section proposes mimetic analyses of the violence typical of modern societies, from high school bullying to genocide and terrorist attacks. Politics, Dumouchel argues, is a violent means of protecting us from our own violent tendencies, and it can at times become the source of the very savagery from which it seeks to protect us. The book’s conclusion analyzes the relationship between ethics and economics, opening new avenues of research and inviting further exploration. Dumouchel’s introduction reflects on the importance of René Girard’s work in relation to ongoing research, especially in social sciences and philosophy.
The U.S. labor market is the most laissez faire of any developed nation, with a weak social safety net and little government regulation compared to Europe or Japan. Some economists point to this hands-off approach as the source of America's low unemployment and high per-capita income. But the stagnant living standards and rising economic insecurity many Americans now face take some of the luster off the U.S. model. In America Works, noted economist Richard Freeman reveals how U.S. policies have created a labor market remarkable both for its dynamism and its disparities. America Works takes readers on a grand tour of America's exceptional labor market, comparing the economic institutions and performance of the United States to the economies of Europe and other wealthy countries. The U.S. economy has an impressive track record when it comes to job creation and productivity growth, but it isn't so good at reducing poverty or raising the wages of the average worker. Despite huge gains in productivity, most Americans are hardly better off than they were a generation ago. The median wage is actually lower now than in the early 1970s, and the poverty rate in 2005 was higher than in 1969. So why have the benefits of productivity growth been distributed so unevenly? One reason is that unions have been steadily declining in membership. In Europe, labor laws extend collective bargaining settlements to non-unionized firms. Because wage agreements in America only apply to firms where workers are unionized, American managers have discouraged unionization drives more aggressively. In addition, globalization and immigration have placed growing competitive pressure on American workers. And boards of directors appointed by CEOs have raised executive pay to astronomical levels. Freeman addresses these problems with a variety of proposals designed to maintain the vigor of the U.S. economy while spreading more of its benefits to working Americans. To maintain America's global competitive edge, Freeman calls for increased R&D spending and financial incentives for students pursuing graduate studies in science and engineering. To improve corporate governance, he advocates licensing individuals who serve on corporate boards. Freeman also makes the case for fostering worker associations outside of the confines of traditional unions and for establishing a federal agency to promote profit-sharing and employee ownership. Assessing the performance of the U.S. job market in light of other developed countries' recent history highlights the strengths and weaknesses of the free market model. Written with authoritative knowledge and incisive wit, America Works provides a compelling plan for how we can make markets work better for all Americans. A Volume in the Russell Sage Foundation's Centennial Series
This benchmark volume addresses the debate over the effects of early industrialization on standards of living during the decades before the Civil War. Its contributors demonstrate that the aggregate antebellum economy was growing faster than any other large economy had grown before.
Despite the dramatic economic growth and rise in income levels, questions remain as to the general quality of life during this era. Was the improvement in income widely shared? How did economic growth affect the nature of work? Did higher levels of income lead to improved health and longevity? The authors address these questions by analyzing new estimates of labor force participation, real wages, and productivity, as well as of the distribution of income, height, and nutrition.
In higher education, the United States is the preeminent global leader, dominating the list of the world’s top research universities. But there are signs that America’s position of global leadership will face challenges in the future, as it has in other realms of international competition. American Universities in a Global Market addresses the variety of issues crucial to understanding this preeminence and this challenge. The book examines the various factors that contributed to America’s success in higher education, including openness to people and ideas, generous governmental support, and a tradition of decentralized friendly competition. It also explores the advantages of holding a dominant position in this marketplace and examines the current state of American higher education in a comparative context, placing particular emphasis on how market forces affect universities. By discussing the differences in quality among students and institutions around the world, this volume sheds light on the singular aspects of American higher education.
Analyses in the Economics of Aging summarizes a massive amount of new research on several popular and less-examined topics pertaining to the relationship between economics and aging. Among the many themes explored in this volume, considerable attention is given to new research on retirement savings, the cost and efficiency of medical resources, and the predictors of health events.
The volume begins with a discussion of the risks and merits of 401(k) plans. Subsequent chapters present recent analysis of the growth of Medicare costs; the different aspects of disability; and the evolution of health, wealth, and living arrangements over the life course. Keeping with the global tradition of previous volumes, Analyses in the Economics of Aging also includes comparative studies on savings behavior in Italy, the Netherlands, and the United States; an examination of household savings among different age groups in Germany; and a chapter devoted to population aging and the plight of widows in India.
Carefully compiled and containing some of the most cutting-edge research and analysis available, this volume should be of interest to any specialist or policymaker concerned with ongoing changes in savings and retirement behaviors.
In Analytical Methods in Economics Akira Takayama presents an exposition of the essential mathematical tools of economics and illustrates their applications to selected economic problems. Drawing on his own teaching experiences and research to provide concrete macro- and microeconomic illustrations of the concepts featured, Takayama clarifies the unifying analytical structure of economic theory and elucidates the mathematical tools that underlie it.
Following a thorough review of preliminary mathematical tools, Takayama discusses the nonlinear programming, uncertainty, differential equations, and optimal control theory. Emphasizing "why" rather than "how-to" questions, the author focuses on explanation, considerations of motivation, and economic application.
Analytical Methods is designed to enable economists, graduate students, and advanced undergraduates in economics to achieve a high level of comfort in the use of analytical techniques.
This book examines the much-debated question of whether John Maynard Keynes' greatest work—The General Theory of Employment Interest and Money—was an instance of Mertonian simultaneous scientific discovery. In part I of this study, Don Patinkin argues for Keynes' originality, rejecting the claims of the Stockholm school and the Polish economist Michal Kalecki. Patinkin shows that the theoretical problems to which the Stockholm school and Kalecki devoted their attention largely differed from those of the General Theory and that, even when the problem addressed was similar, the treatment they accorded it was not part of their central messages. In the remaining parts of the book Patinkin presents a critique of Keynes' theory of effective demand and discusses Keynes' monetary theory and policy thinking, as well as the relationship between the respective developments of Keynesian theory and national income accounting in the 1930s.
Economists investigate the workings of markets and tend to set ethical questions aside. Theologians often dismiss economics, losing insights into the influence of market incentives on individual behavior. Mary L. Hirschfeld bridges this gap by showing how a humane economy can lead to the good life as outlined in the thought of St. Thomas Aquinas.
Although America’s founders may have been inspired by the political thought of ancient Greece and Rome, the United States is more often characterized by its devotion to the pursuit of commerce. Some have even said that a modern commercial republic such as the United States unavoidably lowers its moral horizon to little more than a concern with securing peace and prosperity so that commerce can flourish.
Michael Chan reconsiders this view of America through close readings of Aristotle and Alexander Hamilton, showing that America at its founding was neither as modern nor as low as we have been led to believe. He challenges the virtue/commerce divide that dominates modern thought by demonstrating that the prevailing views of Aristotle and Hamilton on commerce reflect misleading half-truths.
Chan first examines Aristotle’s views of economics as presented in the Politics, arguing that Aristotle was not as hostile to commerce as is commonly believed. He points out the philosopher’s belief in the value of commercial acquisition in the interest of supplying citizens with the “equipment of virtue,” citing Aristotle’s praise of commercial Carthage over agrarian but much-esteemed Sparta.
Chan then turns to a detailed account of the political economy of Hamilton, a proponent of an advanced industrial republic modeled on Great Britain. While many take Hamilton’s advocacy of public credit, a national bank, and manufacturing as evidence of his rejection of classical republican thought in favor of modernity, Chan contends that Hamilton embraced a classically inspired economic statesmanship that transcended a concern with merely securing peace and prosperity. Leading the reader through the complexities of Hamilton’s thought, Chan shows that he intended commerce to pursue the wider classical goals of forming the character of citizens, establishing harmony and justice, and pursuing national greatness. Rather than attempting to brand Hamilton an Aristotelian, Chan seeks to incorporate into the study of Hamilton’s political economy what Aristotle himself regarded as the statesman’s characteristic virtue, prudence.
By reflecting on Hamilton in the context of Aristotle’s own reflections on commerce, Chan casts him in a new light that cuts across the ongoing debate about liberal versus classical republican elements of the American founding. His cogent analysis also raises important questions regarding the American system as it is being challenged by conflicting worldviews. Aristotle and Hamilton on Commerce and Statesmanship makes a significant contribution to our understanding of both Hamiltonian thought and the moral worthiness of democratic capitalism.
On the occasion of the retirement of Saskia J. Stuiveling as the president of the Netherlands Court of Audit, eight former heads of audit institutions took to the stage to talk candidly about their work. Topics covered included innovations in the field, the effects of the financial crisis on their profession, changes resulting from the open data movement, and the need for new skills to audit the oil industry. This book presents their discussion, offering a snapshot of the current state of the profession at its highest levels.
Why do consumer prices and wages adjust so slowly to changes in market conditions? The rigidity or stickiness of price setting in business is central to Keynesian economic theory and a key to understanding how monetary policy works, yet economists have made little headway in determining why it occurs. Asking About Prices offers a groundbreaking empirical approach to a puzzle for which theories abound but facts are scarce. Leading economist Alan Blinder, along with co-authors Elie Canetti, David Lebow, and Jeremy B. Rudd, interviewed a national, multi-industry sample of 200 CEOs, company heads, and other corporate price setters to test the validity of twelve prominent theories of price stickiness. Using everyday language and pertinent scenarios, the carefully designed survey asked decisionmakers how prominently these theoretical concerns entered into their own attitudes and thought processes. Do businesses tend to view the costs of changing prices as prohibitive? Do they worry that lower prices will be equated with poorer quality goods? Are firms more likely to try alternate strategies to changing prices, such as warehousing excess inventory or improving their quality of service? To what extent are prices held in place by contractual agreements, or by invisible handshakes? Asking About Prices offers a gold mine of previously unavailable information. It affirms the widespread presence of price stickiness in American industry, and offers the only available guide to such business details as what fraction of goods are sold by fixed price contract, how often transactions involve repeat customers, and how and when firms review their prices. Some results are surprising: contrary to popular wisdom, prices do not increase more easily than they decrease, and firms do not appear to practice anticipatory pricing, even when they can foresee cost increases. Asking About Prices also offers a chapter-by-chapter review of the survey findings for each of the twelve theories of price stickiness. The authors determine which theories are most popular with actual price setters, how practices vary within different business sectors, across firms of different sizes, and so on. They also direct economists' attention toward a rationale for price stickiness that does not stem from conventional theory, namely a strong reluctance by firms to antagonize or inconvenience their customers. By illuminating how company executives actually think about price setting, Asking About Prices provides an elegant model of a valuable new approach to conducting economic research.
In this work James Tobin discusses two major issues of macroeconomics: the strength of automatic market forces in maintaining full employment equilibrium and the efficacy of government fiscal and monetary policies in stabilizing the economy.
Over the past three decades, average household wealth in the United States has declined among all but the richest families, with a near 80 percent drop among the nation's poorest families. Although the national debate about inequality has focused on income, it is wealth—the private assets amassed and passed on within families—that provides the extra economic cushion needed to move beyond mere day-to-day survival. Assets for the Poor is the first full-scale investigation into the importance of family wealth and the need for policies to encourage asset-building among the poor. Assets for the Poor shows how institutional mechanisms designed to encourage acquisition of capital and property favor middle-class and high-income families. For example, the aggregate value of home mortgage tax deductions far outweighs the dollar amount of the subsidies provided by Section 8 rental vouchers and public housing. Banking definitions of creditworthiness largely exclude minorities, and welfare rules have made it nearly impossible for single mothers to accumulate savings, let alone stocks or real estate. Due to persistent residential segregation, even those minority families who do own homes are often denied equal access to better schools and public services. The research in this volume shows that the poor do make use of the assets they have. Cash gifts—although small in size—are frequent within families and often lead to such positive results as homebuying and debt reduction, while tangible assets such as tools and cars help increase employment prospects. Assets for the Poor examines policies such as Individual Development Account tax subsidies to reward financial savings among the poor, and more liberal credit rules to make borrowing easier and less costly. The contributors also offer thoughtful advice for bringing the poor into mainstream savings institutions and warn against developing asset building policies at the expense of existing safety net programs. Asset-building for low-income families is a powerful idea that offers hope to families searching for a way out of poverty. Assets for the Poor challenges current thinking regarding poverty reduction policies and proposes a major shift in the way we think about families and how they make a better life. A Volume in the Ford Foundation Series on Asset Building
Economists make confident assertions in op-ed columns and on cable news—so why are their explanations at odds with equally confident assertions from other economists? And why are all economic predictions so rarely borne out? Harnessing his frustration with this contradiction, Schlefer set out to investigate how economists arrive at their opinions.
Throughout the latter part of the 20th century, the U.S. labor market performed differently than the labor markets of the world's other advanced industrialized societies. In the early 1970s, the United States had higher unemployment rates than its Western European counterparts. But after two oil crises, rapid technological change, and globalization rocked the world's economies, unemployment fell in the United States, while increasing dramatically in other nations. At the same time, wage inequality widened more in the United States than in Europe. In At Home and Abroad, Cornell University economists Francine D. Blau and Lawrence M. Kahn examine the reasons for these striking dissimilarities between the United States and its economic allies. Comparing countries, the authors find that governments and unions play a far greater role in the labor market in Europe than they do in the United States. It is much more difficult to lay off workers in Europe than in the United States, unemployment insurance is more generous in Europe, and many fewer Americans than Europeans are covered by collective bargaining agreements. Interventionist labor market institutions in Europe compress wages, thus contributing to the lower levels of wage inequality in the European Union than in the United States. Using a unique blend of microeconomic and microeconomic analyses, the authors assess how these differences affect wage and unemployment levels. In a lucid narrative, they present ample evidence that, as upheavals shook the global economy, the flexible U.S. market let wages adjust so that jobs could be maintained, while more rigid European economies maintained wages at the cost of losing jobs. By helping readers understand the relationship between different economic responses and outcomes, At Home and Abroad makes an invaluable contribution to the continuing debate about the role institutions can and should play in creating jobs and maintaining living standards.