Knowledge that Transforms

The front matter of the December 2010 issue contains the Table of Contents

The front matter of the June 2010 issue contains the Table of Contents.

The first theorem of welfare economics rests on the assumption that individuals have neither price-making nor market-making capacities. The authors offer a revision in which individuals have such capacities. The revision emphasizes two keys for market efficiency: the need to align private rewards with social contributions--called full appropriation--and the need for an assumption to counter the possibility of coordination failures in the choice of produced commodities--called noncomplementarity. The authors also emphasize that information about prices of unmarketed commodities involves decentralized knowledge available only to product innovators and that pecuniary externalities are important potential sources of market failure. Copyright 1995 by American Economic Association.

We live in an unprecedented age of globalization, where technology, ideas, factors of production, and goods are increasingly mobile across national boundaries. The current wave of globalization is distinguished from previous ones in part because of the major role of infor mation technology. Nevertheless, globalization is not irreversible. Openness to international trade, finance, and technology is a choice that countries make, and despite the facilitating role of information technology, many countries, even many leading players in the world econ omy including the United States, China, India, Brazil, and Russia, could decide to close their borders. A major cause of the end of the previ ous (also historically unprecedented ) nineteenth century wave of globalization was disillusion ment with the international economic order, in

In the Medicare program, increases in cost sharing by a supplemental insurer can exert financial externalities. We study a policy change that raised patient cost sharing for the supplemental insurer for retired public employees in California. We find that physician visits and prescription drug usage have elasticities that are similar to those of the RAND Health Insurance Experiment (HIE). Unlike the HIE, however, we find substantial "offset" effects in terms of increased hospital utilization. The savings from increased cost sharing accrue mostly to the supplemental insurer, while the costs of increased hospitalization accrue mostly to Medicare.

The front matter of the March 2010 issue contains the Table of Contents.

Do Traditional Institutions Constrain Female Entrepreneurship? A Field Experiment on Business Training in India by Erica Field, Seema Jayachandran and Rohini Pande. Published in volume 100, issue 2, pages 125-29 of American Economic Review, May 2010