THE THICK VOLUME under review, by Richard Layard, Stephen Nickell, and Richard Jackman, is an extensive econometric and theoretical study, using time-series and cross section data, of the central tendency of the unemployment rate and its fluctuations in 19 OECD countries since the mid-50s. It thus joins the company of several recent macroeconometric studies of employment determination using international time-series data. Of these it is easily the most far-ranging study to date though in its microscopic examination of social legislation it has somehow neglected a range of macro factors right under its nose. Readers will find an abundance of arresting claims and provocative positions to keep the critical juices flowing. For me the volume is significant not (or hardly at all) as an assemblage of particular modelings and findings but primarily as an early econometric expression of the paradigm shift we are now witnessing in macroeconomics. Once nearly made extinct by a neoclassical winter, a school of economists are today furiously at work on unemployment considered as an equilibrium phenomenon' springing from en-

PRICES AND QUANTITIES iS the brilliant and disturbing last work of Arthur M. Okun (1928-1980). For more than a decade Okun was the foremost practitioner of macroeconomics in the United States. His critical intelligence at both the theoretical and empirical ends of economics was unsurpassed. These facts were virtually a manufacturer's warranty that the book, whatever its argumentation and evidence, would be significant; we want to know what Okun thought. But this background was no guarantee of an important treatise, and it must have taken some courage to venture a big theoretical work, in an accessible style, on urgent questions. In fact, Okun has delivered a creative and virtuosic study in economic theory. The book's contribution is to provide a complete description of an economy in which rational economic agents consider the distributional consequences of wage and price decisions. The perspective adopted, one which is winning growing favor of late, is contract-theoretic. Because they wish to economize on their costly transactions with one another, people trade repeatedly with the same agent; so trust and fidelity to understandings are important. The ensuing analysis lodges some basic dissents from the informational-expectational paradigm developed over the last score of years. It is particularly stimulating, and troubling, on the main policy controversy of the decade, the question of disinflation.

ECONOMISTS generally take tastes as given and work out consequences of changes in prices, incomes, and other variables under assumption that tastes do not change. When pressed, either they engage in ad hoc theorizing or they explicitly delegate discussion of tastes to sociologist, psychologist, or anthropologist. Unfortunately, these disciplines have not developed much in way of systematic usable knowledge about tastes. Although economists have been reluctant to discuss systematically changes in structure of tastes, they have long relied on assumptions about basic and enduring properties of tastes. Self-interest is assumed to dominate all other motives,' with a prominent place also assigned to benevolence toward children2 (and occasionally others), and with self-interest partly dependent on distinction and other aspects of one's position in society.3 The dominance of self-interest and persistence of some benevolence have usually been explained by nature, or an equivalent evasion of problem. The development of modern biology since mid-nineteenth century and of population genetics in twentieth century made clear that is only beginning, not end of answer. The enduring traits of human (and animal) nature presumably were genetically selected under very different physical environments and social arrangements as life on earth evolved during millions of years. It is not difficult to understand why self-interest has high survival value under very different circumstances,4 but why should altruistic behavior, sometimes observed among animals as well as human beings, also survive? This kind of question has been asked by some geneticists and other biologists especially during last two decades. Their work has recently been christened sociI For example, Adam Smith said, We are not ready to suspect any person of being defective in selfishness [9, 1969, p. 446], and it is not from benevolence of butcher, brewer, or baker, that we expect our dinner, but from their regard to their own interest [10, 1937, p. 14]. 2According to Alfred Marshall, . . men labor and save chiefly for sake of their families and not for themselves [6, 1920, p. 228]. 3Nassau Senior said, the desire for distinction . . . may be pronounced to be most powerful of human passions [8, 1938, p. 12]. 4Ronald Coase argues convincingly that Adam Smith, especially in his Moral Sentiments, was groping toward an explanation of importance of selfinterest in terms of its contribution to viable social and economic arrangements (see Coase [5, 1976]).

Very little. A plethora of integrated assessment models (IAMs) have been constructed and used to estimate the social cost of carbon (SCC) and evaluate alternative abatement policies. These models have crucial flaws that make them close to useless as tools for policy analysis: certain inputs (e.g., the discount rate) are arbitrary, but have huge effects on the SCC estimates the models produce; the models' descriptions of the impact of climate change are completely ad hoc, with no theoretical or empirical foundation; and the models can tell us nothing about the most important driver of the SCC, the possibility of a catastrophic climate outcome. IAM-based analyses of climate policy create a perception of knowledge and precision, but that perception is illusory and misleading. (JEL C51, Q54, Q58)

Presenting data on all full-length articles in the three top general economics journals for one year in each decade 1960s–2010s, I analyze changes in patterns of coauthorship, age structure and methodology, and their possible causes. The distribution of number of authors has shifted steadily rightward. In the last two decades, the fraction of older authors has almost quadrupled. Top journals are publishing many fewer papers that represent pure theory, regardless of subfield, somewhat less empirical work based on publicly available data sets, and many more empirical studies based on data collected by the author(s) or on laboratory or field experiments. (JEL A14)

The nature and scope of the Federal Reserve's authority and the structure of its decision making are now “on the table” to an extent that has not been seen since 1935, and the Fed's vaunted independence is under some attack. This essay asks what the Federal Reserve should—and shouldn't—do, leaning heavily on the concept of economies of scope. In particular, I conclude that the central bank should monitor and regulate systemic risk because preserving financial stability is (a) closely aligned with the standard objectives of monetary policy and (b) likely to require lender of last resort powers. I also conclude that the Fed should supervise large financial institutions because that function is so closely to regulating systemic risk. However, several other functions now performed by the Fed could easily be done elsewhere. (JEL E52, E58, G21, G28)

I wish to express my appreciation to thefollowingfor their comments and suggestions either in their capacity as the referees of this journal or otherwise: Anthony Atkinson, Zvi Griliches, Martin Bronfenbrenner, Rudolph Blitz, James Buchanan, Milton Friedman, James Meade, Jacob Mincer, Franco Modigliani, Naomi Perlman, John Rawls, Paul Schultz, Gerald Sazama, Joseph Stiglitz, Paul Taubman, Lester Thurow, and Charles Wilson. None of them, however, bears any responsibility for my errors and my appraisal of different theories. I dedicate this paper to the memory of Harry G. Johnson, my teacher, who died at the early age of 53 on 9 May 1977, a few months after we had exchanged correspondence on this survey and had plans for further discussion, especially on the development of his ideas about cultural inheritance. Alas, that was the end.