Knowledge that Transforms

Elaine Kelly of Institute for Fiscal Studies and The Health Foundation reviews “The Economics of the UK Health and Social Care Labour Market: How Labour Economics Can Inform Policy toward the Frontline Care Workforce” by Robert Elliott. The Econlit abstract of this book begins: “Discusses economic theories key to understanding the workings of the labor markets for frontline health- and social-care workers in the United Kingdom, focusing on the theories of net advantages, human capital, the production function, the labor demand schedule, and equilibrium in the labor market.”

Karen Dynan of Harvard University reviews “The Measure of Progress: Counting What Really Matters” by Diane Coyle. The Econlit abstract of this book begins: “Explores the shortcomings in standard economic measurement and why the current metrics miss important considerations, highlighting over a decade's worth of research on questions of economic statistics and measurement.”

This review of liquidity traps unifies three landmark economic downturns—the US Great Depression, the Great Recession, and Japan’s Long Recession—into a single analytical framework. We examine various forces that drive natural interest rates negative: temporarily (such as banking crises and debt overhangs) or permanently (such as demographic shifts and inequality). When policy rates hit the zero lower bound, conventional monetary tools lose traction. Under a standard monetary policy regime, counterintuitive paradoxes emerge: Greater price flexibility deepens recessions, and positive supply shocks become contractionary. We show how policy effects—including the size of fiscal multipliers, forward guidance, and these paradoxes—depend critically on the monetary-fiscal regime and on central bank credibility. The paper explains how regime changes, such as Franklin D. Roosevelt’s 1933 abandonment of the gold standard and balanced-budget dogmas, successfully reversed deep slumps by credibly shifting expectations. We examine whether secular-stagnation forces are likely to assert themselves in the coming decades.(JEL E32, E42, E43, E52, E62, G01, G21)

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.

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL and EconLit. 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.”

R. Meager of University of New South Wales reviews “We Are Not Able to Live in the Sky: The Seductive Promise of Microfinance” by Mara Kardas-Nelson. The Econlit abstract of this book begins: “Explores how microfinance, the practice of lending small amounts of money directly to people facing poverty, has impacted the lives of borrowers, highlighting the experiences of women in Sierra Leone who took out microfinance loans.”

Richard Holden of UNSW Business School reviews “Fintech Explained: How Technology Is Transforming Financial Services” by Michael R. King. The Econlit abstract of this book begins: “Explores how entrepreneurial startups, mature businesses, digital-only banks, and global technology companies are transforming the customer experience in financial services, focusing on financial technology (fintech) applications developed since the mid-2000s that primarily target individuals and small business customers.”

Mark Carlson of Board of Governors of the Federal Reserve System reviews “Seven Crashes: The Economic Crises that Shaped Globalization” by Harold James. The Econlit abstract of this book begins: “Explores the transformative effect of supply crises on globalization, promoting the argument that new institutions arise out of responses to these disruptions and that this changes the way that people conceive of the economic process.”

Carl Kitchens of Florida State University reviews “Democracy in Power: A History of Electrification in the United States” by Sandeep Vaheesan. The Econlit abstract of this book begins: “Explores the history of public control of power systems in the United States, assessing how the United States has, at least partially, averted a net-zero oligarchy in power.”