Knowledge that Transforms

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. (JEL E31, E43, E52, E58, E62, F31, G21)

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.

A large literature at the intersection of economics and finance offers prescriptions for regulating banks to increase financial stability.This literature abstracts from the discretion that accounting standards give banks over financial reporting, creating a gap between the information assumed to be available to regulators in models of optimal regulation and the information available to regulators in reality.We bridge insights from the economics, finance, and accounting literatures to synthesize knowledge about the design and implementation of bank regulation and identify areas where more work is needed.We present a simple framework for organizing the relevant ideas, namely the externalities that motivate bank regulation, the rationales for allowing accounting discretion, and the use of discretion to circumvent regulation.Our takeaway from reviewing work in these areas is that academic studies of bank regulation and accounting discretion require a more unified approach to design optimal policy for the real world.

If racial gaps in measures of human capital like educational attainment and standardized test scores were eliminated, what would happen to racial disparities in wages, employment, and other labor market outcomes?A credible answer to this question is foundational for understanding the nature and scope of racial inequality and discrimination in the United States.This article reviews and synthesizes a literature that studies this question by estimating the extent to which controlling for measures of human capital changes Black-white gaps in labor market outcomes, and discusses various conceptual and methodological issues related to interpreting this type of exercise.I show that while accurately interpreting this exercise and its many variants requires careful thinking, the results elucidate many important and subtle aspects of racial inequality in the United States.