WHILE THE U. S. PRODUCTIVITY slowdown wasn't first discovered by economists in 1980, it certainly began to get big play in that year. The American Economic Association devoted a session to the current retardation in U.S. productivity and the first in a series of major articles on the slowdown appeared in this journal. The latter was a review by Richard Stone (1980) of Edward Denison's Accounting for Slower Economic Growth: The United States in the 1970s (1979). Denison documented a substantial drop in the growth of labor productivity between 1948-73 and 197376, showing that the lion's share of that slowdown could be attributed to what had come to be known as the residual, or to what others have called total factor productivity growth. Stone's review of Denison was followed by contributions by Richard Nelson (1981), Roger D. Norton (1986), and Angus Maddison (1987). The citations to literature on the slowdown had ballooned from dozens to hundreds by the appearance of Maddison's article, and it had become everyday fare in our morning newspapers. In the midst of this surge of concern with the U.S. productivity slowdown, William Baumol was asked by the president of the Committee for Economic Development to prepare a statement on productivity policy for the United States. With disarming modesty, Baumol reports the CED was looking for someone whose ignorance of the subject ensured that the statement would not merely recapitulate the accepted shibboleths (p. ix). Baumol accepted the challenge in 1983 and with the appearance of Productivity and American Leadership seven years later he and his collaborators (Sue Anne Batey Blackman and Edward N. Wolff) have produced at least four books and nine articles. A productive collaboration indeed. Why another publication on the slowdown? In 1979, Denison regarded the slowdown as a mystery, and Stone concluded his review with a wistful sigh-If Denison is stumped who can expect to do better? (Stone 1980, p. 1539). A decade later, Baumol, Blackman, and Wolff (hereafter BBW) have shown that we can do a lot better. The book has four important virtues. First, it reveals an appreciation for history. If there ever was a topic for which an understanding of the long run mattered, productivity performance is surely it. United States experience with the productivity slowdown since the 1960s cannot be adequately understood without placing that experience in the perspective of a century of productivity growth, nor can it be * William J. Baumol, Sue Anne Batey Blackman, and Edward N. Wolff. Productivity and American Leadership: The Long View. Cambridge and London: The MIT Press, 1989. Pp. x, 395. $29.95. ISBN 0-262-02293-1.

THIS ARTICLE critically reviews the Handbook of Industrial Organization (henceforward the Handbook), edited by Richard Schmalensee and Robert Willig. These two volumes are the tenth installment in the North-Holland Handbooks in Economics series, under the general editorship of Kenneth Arrow and Michael Intriligator. Like its predecessors, this Handbook contains a number of survey papers (in this instance, 26) on a variety of related topics. As such, they afford both authors and readers an opportunity to determine which directions research in the field has taken, what (if any) real advances have been made, and what questions are still unanswered. Consequently, this review also describes and appraises the current state of Industrial Organization. Research in Industrial Organization has undergone a dramatic change in the last 20 years. Neoclassical decision-theoretic analysis and competitive general equilibrium theory have been supplanted almost completely by noncooperative game theory. This change was not merely the adoption of the tools of another field

Auditing, Internal control judgement, Meta Analysis

This paper examines whether middle age American households purchase adequate amounts of life insurance. The analysis is based on SRI International's 1980, 1982, and 1984 surveys of the financial positions of American households. Our findings indicate that a significant minority of American wives are highly underinsured with respect to the possible deaths of their husbands. We find that 25 to 30% of wives are inadequately insured, by which we mean that they would suffer a loss in their rate of sustainable consumption of at least 30% in the event of being widowed. These findings on inadequate life insurance are even more striking if one focuses on those households in which over half of the couple's present expected value of resources is dependent on the husband's survival. The results of this paper together with those of the related literature strongly suggest that raising the share of social security benefits that are paid to surviving spouses as well as increasing employer-provided group life insurance could have a very considerable impact on the alleviation of poverty among widows, especially elderly widows

This paper uses firm-level panel data to investigate the proposition that reliquification is an important phase of the business cycle. It occurs late during recessions and is characterized by prolonged reductions in real investment, caused by firms needing to accumulate assets in order to improve their financial health. The paper concludes that a buildup of assets precedes an increase in investment. This effect is more important for firms without access to organized bond markets and during recession years

When the managers of a firm are not its owners, agency problems result if managers take actions that maximize their own utility rather than the value of the firm. This paper investigates the existence of agency problems in mutual savings and loans. Using a more general approach than in previous studies, I show that mutual S&Ls were operating with an inefficient output mix while stock S&Ls were not, suggesting an agency problem among mutual S&Ls. The results cast doubt on a common argument that mutuals convert to stock S&Ls to capture economies of scale

This paper offers a model of intermediation in the Diamond-Dybvig tradition in which both fiat currency and bank deposits are present. The behavior of the economy's price level, deposit-currency ratio, and money supply is compared across equilibria in which bank runs do and do not occur. It is shown that the behavior of these variables in the presence and absence of runs is consistent with that observed in the United States during the period from 1929 to 1933

This paper analyzes the role of financial intermediaries as marketmakers in the market for interest rate swaps. We argue that intermediaries which hold large nontraded portfolios of swaps are efficient alternatives to direct hedging by counterparties in publicly traded cash and futures instruments. The efficiency afforded by the swap marketmaker derives from reduction in transactions costs, diversification of basis risk, and reduced agency costs of debt. The analysis provides an explanation for the existence and success of the swaps market as a means for spreading risk and for its dominance by large financial institutions