Knowledge that Transforms

Yueran Ma of University of Chicago, Booth School of Business, and NBER reviews “The Making of Modern Corporate Finance: A History of the Ideas and How They Help Build the Wealth of Nations” by Donald H. Chew Jr. The Econlit abstract of this book begins: “Explores the significant potential of the corporate finance function to increase the efficiency and value of organizations, from publicly traded companies to nonprofit institutions and state-owned enterprises, promoting the argument that US private-sector productivity is the fundamental source of US economic and social wealth.”

Doctors often treat similar patients differently, which affects health outcomes and medical spending. We assess the recent literature on doctor decision-making through the lens of a model that incorporates diagnostic and procedural skills, beliefs, incentives, and differences in patient pools. Decision-making is affected by beliefs, training, experience, peer effects, financial incentives, and time constraints. Interventions to improve decision-making include providing information, guidelines, and technologies like electronic medical records and algorithmic decision tools. Economists have made progress in understanding doctor decision-making, but applications of that knowledge to improving health care are still limited.

Alex M. Thomas of School of Arts and Sciences, Azim Premji University reviews “Relocating Development Economics: The First Generation of Modern Indian Economists” by Maria Bach. The Econlit abstract of this book begins: “Explores the work of the Early Nationalists, the first generation of modern economists in India in the mid- to late-nineteenth century, focusing on how they produced forward-thinking knowledge on economic development.”

Editor's Note Our policy is to annotate all English-language books on economics and related subjects that are sent to us. A very small number of foreign-language books are called to our attention and annotated by our consulting editors or others. Our staff does not monitor and order books published; therefore, if an annotation of a book does not appear six months after the publication date, please write to us or the publisher concerning the book.

Central banks have a primary goal of price stability. They pursue it using tools that include the interest they pay on reserves, the size and the composition of their balance sheet, and the dividends they distribute to the fiscal authority. We describe the economic theories that justify the central bank’s ability to control inflation and discuss their relative effectiveness in light of the historical record. We present alternative approaches as consistent with each other, as opposed to conflicting ideological camps. While interest-rate setting may often be superior, having both a monetarist pillar and fiscal support is essential, and at times pegging the exchange rate or monetizing the debt is inevitable.

William Roberds of Federal Reserve Bank of Atlanta reviews “The Silver Empire: How Germany Created Its First Common Currency” by Oliver Volckart. The Econlit abstract of this book begins: “Examines the creation of Germany's first common currency, focusing on insights from recently discovered primary sources that help explain the purpose of the currency and the importance of the uneven availability of precious metals.”

Vellore Arthi of University of California, Irvine, reviews “Controlling Contagion: Epidemics and Institutions from the Black Death to Covid” by Sheilagh Ogilvie. The Econlit abstract of this book begins: “Explores the past seven centuries of history to investigate how human societies dealt with epidemic disease, highlighting the features that have made institutional frameworks better at coordinating responses to epidemics and better at devising innovations to improve societal learning.”

Ryan Bubb of University of Southern California reviews “Good Company: Economic Policy after Shareholder Primacy” by Lenore Palladino. The Econlit abstract of this book begins: “Explores how ending shareholder primacy and reorienting corporate decision-making toward productivity would work in practice, focusing on how board members, employees, managers, shareholders, customers, and the broader public would understand their rights and responsibilities if they were operating together in pursuit of economic innovation.”

Intimate partner violence (IPV) is a pervasive global issue, with approximately one in three women experiencing IPV over their lifetime.IPV prevalence is higher in low-and middle-income countries (LMICs), and costs of IPV are also considerably larger as a percentage of GDP in LMICs.We present the economic theory behind IPV and highlight some important determinants such as poverty and societal norms.We then synthesize the causal evidence on the impact of a range of policies and interventions, highlighting approaches which have been effective in reducing IPV.We identify key insights from the existing literature and outline areas where further theoretical and empirical research is needed.