Knowledge that Transforms

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit, and www.e-JEL.org . New changes to the classification system appear as soon as possible on www.econlit.org . The JEL classification system may be used freely for scholarly purposes. We suggest the following format: “JEL: A10, B10, etc.”

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit, and www.e-JEL.org . New changes to the classification system appear as soon as possible on www.econlit.org . The JEL classification system may be used freely for scholarly purposes. We suggest the following format: “JEL: A10, B10, etc.”

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit, and www.e-JEL.org . New changes to the classification system appear as soon as possible on www.econlit.org . The JEL classification system may be used freely for scholarly purposes. We suggest the following format: “JEL: A10, B10, etc.”

The list below specifies doctoral degrees conferred by U.S. and Canadian universities during academic year July 2015 to June 2016. Lists of degree recipients and subject classifications are provided by the university. Note: Dissertations without classifications may be found under “Y Miscellaneous Categories.”

GDP, the most fundamental concept of aggregate economics, is often misunderstood and misused. In a brief book, Diane Coyle attempts to demystify and clarify the concept by providing what she calls “an affectionate history.” The product is a lucid and clear presentation that however must come with a caution sign. The story is often incomplete, and what it does contain is not always accurate. Among the salient and controversial topics discussed are the adequacy of GDP for the twenty-first century, the deficiencies of GDP as a measure of welfare, and the strange way in which banking services are calculated. (JEL B22, E01, E23)

NANCY STOKEY AND ROBERT LUCAS, JR., and Ed Prescott have produced an exceptionally useful, thorough, and timely introduction to stochastic economic dynamics. Dynamic optimization techniques developed in Operations Research, formulated initially by Richard Bellman (1957), have been used extensively in economics, particularly in macroeconomics, finance, and public finance. Economic theorists have extended dynamic programming theory in several valuable directions. Of particular note for this book is the concept of recursive equilibrium introduced in Edward Prescott and Rajnish Mehra (1980). While these techniques have been used extensively, there has been no broad, unified, and comprehensive presentation of the concepts, tools, and applications of recursive dynamic techniques that is written for economists and demands no more mathematics than a typical student is exposed to in a good graduate program. This book succeeds marvelously in filling this need. Furthermore, given the depth of development, it is also a valuable reference for researchers. Before describing the book's contents in detail, we should discuss what is distinctive and important about the recursive approach to dynamic economic problems. To do this, let's examine a simple problem and an alternative approach to its solution. The canonical problem for economic dynamics is the infinite horizon deterministic growth problem. Let k, be the capital stock at the beginning of period t, f(kt) a neoclassical production function expressing period t production as a function of kt, ct consumption in period t chosen at the end of the period, u(c) a concave utility function, and I the discount factor. Then a social planner for this infinitely lived economy will solve the problem

pUBLIC FINANCE iS treated in the new International Encyclopedia of the Social Sciences (IESS) in 14 articles totaling some 74,000 words, exclusive of bibliographies (see the accompanying tabulation). In addition, several biographical articles deal with contributions to public finance made by their subjects. The authors are all scholars of standing, and readers can be confident that the treatment meets accepted standards of professional competence. Rather than commenting systematically on the individual articles, I propose to try to characterize the scope and nature of the coverage of the field, illustrating points by reference to particular articles, and to compare the treatment of public finance in the new encyclopedia (IESS) with that in the Encyclopaedia of the Social Sciences (ESS) which was published in 1930-35. The biographical articles are mentioned but not examined. Finally, I shall venture some remarks on the editorial emphasis of the IESS and the state of the discipline of public finance.

The New Palgrave Dictionary of Money and Finance is a successor to the 1987 work The New Palgrave: A Dictionary of Economics. Both dictionaries claim descent from Palgrave's Dictionary of Political Economy, published as a summary of the state of economics during the 1890s. The same team of three editors is responsible for both New Palgrave dictionaries,1 and there are many similarities in approach. Indeed, about 20 percent of the essays in the New Palgrave Money and Finance are reprinted from the New Palgrave Economics (and ten essays are reprinted from the original Palgrave). There are also some obvious differences between the two New Palgrave dictionaries. The New Palgrave Economics had a much broader scope, aiming to cover all of modern economics. It was considerably larger than the New Palgrave Money and Finance, with four volumes rather than three, 3500 pages rather than 2500, and almost 2000 essays rather than 1000 or so. The New Palgrave Economics included biographical essays, which took up about a third of the work; the New Palgrave Money and Finance has no biography but includes many short definitions of technical terms. Last but not least, the New Palgrave Economics omitted empirical topics to concentrate on economic theory and history of economic thought, while the New Palgrave Money and Finance covers much empirical material.

I have benefited from comments and criticisms of an earlier draft by Irma Adelman, Peter Balacs, Ronald Dore, Edgar Edwards, Unni Eradi, Michael Faber, Anne Gordon, Keith Griffin, Jill Rubery, Seev Hirsch, Ernest Stern, Frances Stewart, Hugh Stretton, B. R. Virmani, Gordon Winston and Howard Wriggins. To these, and to a research seminar at Queen Elizabeth House, I am very grateful. I am also grateful to the Economic Development Institute of the World Bank and its Director, Mr. Andrew Kamarck, for having provided the facilities and stimulating atmosphere for the early stages of a considerably larger paper, commissioned by Mr. Ernest Stern, of which this paper forms a part. I am grateful to Mr. Stern and the World Bank for permitting me to use the material here.

G ERMANY iS in the headlines, not because of super performance but rather because it seems to be on the ropes. Inflation fighting, once again, is taking its toll on growth in Germany and in all of Europe; the instant integration project for East Germany has translated into massive unemployment there and an extraordinary financial cost to come for a decade or more in the West. Prospects for an integrated Europe, with a common money and fully integrated markets and joint policies are moving off the screen. If there ever was a miracle, today one is badly needed. The complacent, self-satisfied, overweight, and overpaid Germany is not coping well with the challenges. The timely and important book by Giersch, Paque, and Schmieding fills a gap in the economic history of West Germany (at least in the English language) and it does so in a thoroughly professional and substantial way.' The authors have set for themselves two tasks, to provide an account of events and to lay out a set of explanatory economic hypotheses in the tradition of free market economics. They provide an almost blow-by-blow account of events and trends, and a record of opinions to document where Germany came from and where it went. The book is fully successful in this objective and thus deserves attention from students of German economic history. Curiously the authors explicitly exclude economic historians from their readership and invite the interest of applied economists; let no student of economic history be put off by this unjustified exclusion. The book comments on German postwar economic events in a chronological fashion. A rundown of the chapter titles will give an immediate impression of postwar history, the issues, and the authors' angst: stylized facts 1945-90; 1945-48: establishing a liberal order; 1948-60: spontaneous growth; 1960-73: toward managed growth; 1973-90: facing the slowdown; two cheers for German unification; a new miracle? No question, as a record this book is superb. The most interesting part is the account of the immediate postwar reconstruction, including monetary reform and decontrol. This is where the miracle happened most conspicuously as Henry Wallich (1955) described so well. The bold write-down of the monetary overhang is just one of the reforms of the time that would have been instructive for the Soviet Union in the past few years. In this context one cannot pass up recounting the Allied reaction to price liberalization in Germany. The turnaround of Germany in 1948 was nothing short of a miracle. From one day to the next, productive forces were unleashed to let recovery and growth proceed at breakneck speed. The move from a socialist control economy to the free market was bold. One Sunday in 1948, while the Allied supervisors were not watching, Economics minister Erhard lifted summarily all price controls. Jossleyn Hennessy (1964, p. 5) reports how it all started: