Knowledge that Transforms

Michael Hurd of RAND and NBER reviews “The Economic Theory of Annuities” by Eytan Sheshinski,. The EconLit Abstract of the reviewed work begins “Presents a theoretical analysis of the functioning of private annuity markets. Discusses benchmark calculations--savings and retirement; survival functions, stochastic dominance, and changes in longevity; a life cycle model with longevity risk--first best and competitive equilibrium; comparative statistics, discounting, partial annuitization, and no annuities; subjective beliefs and survival probabilities; moral hazard; uncertain future survival functions; pooling equilibrium and adverse selection; income uncertainty; life insurance and differentiated annuities; annuities, longevity, and aggregate savings; utilitarian pricing of annuities; optimum taxation in pooling equilibria; bundling of annuities and other insurance products; and financial innovation--refundable annuities (annuity options). Sheshinski is Sir Isaac Wolfson Professor of Public Finance at Hebrew University. Index.”

Shawn Cole of Harvard University reviews “Finance for All? Policies and Pitfalls in Expanding Access” by. The EconLit Abstract of the reviewed work begins “Presents the World Bank's first efforts at developing indicators illustrating the limitations of financial access across the world and identifies barriers that may be preventing small firms and poor households from using financial services. Discusses access to finance and development--theory and measurement; firms' access to finance--entry, growth, and productivity; household access to finance--poverty alleviation and risk mitigation; and the government's role in facilitating access. Index.”

Francisco Rodriguez of United Nations Development Programme and Wesleyan University reviews “Free Trade Reimagined: The World Division of Labor and the Method of Economics” by Roberto Mangabeira Unger,. The EconLit Abstract of the reviewed work begins “Examines the contest over free trade and over the form of an open international economy, focusing on the world division of labor and the method of economics. Discusses why there is intellectual as well as practical trouble with the doctrine of free trade. Addresses the intellectual core of the argument for trade--the doctrine of comparative advantage. Responds to the incompleteness of the doctrine of comparative advantage. Advances three theses about free trade. Explores the programmatic implications of the analysis and its consequences for the reformation of the world trading system and the redirection of national development strategies. Unger is Brazil's Minister of Long-Term Planning. Name and subject indexes.”

Catherine L. Mann of Brandeis University reviews “Untangling the US Deficit: Evaluating Causes, Cures and Global Imbalances” by Richard A. Iley, Mervyn K. Lewis,. The EconLit Abstract of the reviewed work begins “Considers the nature of the U.S. current account deficit, focusing on its possible causes and the severity of its consequences. Considers the causes of the U.S. current account deficit, discussing the trade balance view, the absorption view, the savings and investment view, and the portfolio balance view. Examines the international dimension and the “global savings glut” view of the deficit. Explores the nature of the adjustment mechanisms to payments imbalances in the context of a world system of independent currencies and “international financial laissez-faire.” Presents alternative scenarios of the extent and sustainability of the U.S. current account position. Considers the demand for U.S. assets and the main sources of capital flows to the United States over the last decade. Analyzes the China-United States relationship and its connection with the U.S. trade deficit. Iley is Senior Economist with BNP Paribas. Lewis is Professor of Banking and Finance at the University of South Australia and Fellow of the Academy of Social Sciences. Index.”

Gary Clyde Hufbauer of Peterson Institute for International Economics reviews “Economic Sanctions: International Policy and Political Economy at Work” by Robert Eyler,. The EconLit Abstract of the reviewed work begins “Develops an open economy macroeconomic model of international economic sanctions, and reviews game and public choice theories of economic coercion. Discusses the choice to sanction or not to sanction; basic sanction analysis; sanction initiation and continuance--the entrance of game theory; public choice theory and smart sanctions; open economy macroeconomics and sanctions; mathematical derivations of the new open economy macroeconomics sanctions model; and empirical analyses of sanction effectiveness. Eyler is Associate Professor and Chair of Economics at Sonoma State University. Bibliography; index.”

Jay C. Shambaugh of Dartmouth College and NBER reviews “Capital Controls and Capital Flows in Emerging Economies: Policies, Practices, and Consequences” by Sebastian Edwards,. The EconLit Abstract of the reviewed work begins “Fourteen papers and nine comments, originally presented at a conference held in Santa Barbara in December 2004, examine the advantages and pitfalls of restricting capital mobility in developing countries. Papers discuss capital flows in a globalized world--the role of policies and institutions; capital controls, sudden stops, and current account reversals; currency mismatches, debt intolerance, and original sin--why they are not the same and why it matters; the microeconomic evidence on capital controls--no free lunch; the international exposure of U.S. banks--Europe and Latin America compared; international borrowing, capital controls, and the exchange rate--lessons from Chile; international borrowing and macroeconomic performance in Argentina; capital flows and controls in Brazil--what we have learned; the Chinese approach to capital inflows--patterns and possible explanations; South Korea's experience with international capital flows; Malaysian capital controls--macroeconomics and institutions; capital flows and exchange rate volatility--Singapore's experience; India's experience with capital flows--the elusive quest for a sustainable current account deficit; and capital controls--an evaluation. Edwards is Henry Ford II Professor of International Business Economics at the Anderson Graduate School of Management at the University of California at Los Angeles and Research Associate at the National Bureau of Economic Research. Author and subject indexes.”

Thomas J. Prusa of Rutgers University reviews “Anti-Dumping and Countervailing Action: Limits Imposed by Economic and Legal Theory” by Philip Bentley, Aubrey Silberston,. The EconLit Abstract of the reviewed work begins “Examines current actions against dumping and export subsidies, focusing on the numerous contradictions found in existing law and practice and possible changes to these. Discusses antidumping principles; antisubsidy and countervailing principles; injury; antidumping action--problems arising; zeroing and the full degree of dumping; subsidies and countervailing action--problems arising; public policy considerations; and antidumping action--alternative approaches. Appendices provide further information on Article VI of the 1947 GATT Treaty, the Agreement on Implementation of Article VI of the GATT 1994 Agreement, the Agreement on Subsidies and Countervailing Measures, and a list of cases. Bentley is Partner with McDermott Will and Emery Stanbrook. Silberston is Emeritus Professor of Economics at Imperial College, London. Index.”

Robert E. Wright of New York University reviews “Political Institutions and Financial Development” by Stephen Haber, Douglass C. North, Barry R. Weingast,. The EconLit Abstract of the reviewed work begins “Nine papers examine why some countries develop better financial systems than others, focusing on the importance of a country's political institutions in this development. Papers discuss political institutions and financial development--evidence from the political economy of bank regulation in Mexico and the United States (Stephen Haber); the political economy of early U.S. financial development (Richard Sylla); what the World Bank can learn from American history (John Joseph Wallis); the move beyond legal origin and checks and balances--political credibility, citizen information, and financial sector development (Philip Keefer); the microeconomic effects of different approaches to bank supervision (James R. Barth, Gerard Caprio, and Ross Levine); political drivers of diverging corporate governance patterns (Peter Gourevitch and James Shinn); credible commitment and sovereign default risk--two bond markets and imperial Brazil (William R. Summerhill); legal origin versus the politics of creditor rights--bond markets in Brazil, 1850-2002 (Aldo Musacchio); and economics, political institutions, and financial markets (Douglass C. North and Mary M. Shirley). Haber is A. A. and Jeanne Welch Milligan Professor in the School of Humanities at Stanford University and Senior Fellow of the Hoover Institution. North is Professor of Economics at Washington University in St. Louis and Senior Fellow of the Hoover Institution. Weingast… Index.”

Edward N. Wolff of New York University reviews “The Warhol Economy: How Fashion, Art, and Music Drive New York City” by Elizabeth Currid,. The EconLit Abstract of the reviewed work begins “Examines how creative industries--fashion, art, and music--drive the economy of New York City. Discusses art, culture, and New York City; how it all began--the move from the rise of the factory to the rise of bling; becoming creative; the social life of creativity; the economics of a dance floor; creating buzz and selling cool; and the rise of global tastemakers--what it all means for the policymakers. Currid is Assistant Professor in the University of Southern California's School of Policy, Planning, and Development. Index.”

Stephen Devereux of Institute of Development Studies, University of Sussex reviews “Famine in North Korea: Markets, Aid, and Reform” by Stephan Haggard, Marcus Noland,. The EconLit Abstract of the reviewed work begins “Presents an account of the late twentieth-century North Korean famine, focusing on the origins and aftermath of the crisis, the regime's response to outside aid, and the effect of its current policies on the country's economic future. Discusses famine, aid, and markets in North Korea; the origins of the great famine; the distribution of misery--famine and the breakdown of the public distribution system; the aid regime--the problem of monitoring; diversion; the political economy of aid; coping, marketization, and reform--new sources of vulnerability; and North Korea in comparative and international perspective. Haggard is Lawrence and Sallye Krause Professor in the Graduate School of International Relations and Pacific Studies at the University of California, San Diego. Noland is Senior Fellow at the Institute for International Economics. Index.”