Knowledge that Transforms

Joshua Gans of University of Toronto reviews “Making Wise Decisions in a Smart World: Responsible Leadership in an Era of Artificial Intelligence” by Peter Verhezen. The Econlit abstract of this book begins: “Considers the importance of sound decision-making in the uncertain and turbulent era of artificial intelligence (AI), discussing how organizations can create sustainable value and thrive without harming others.”

Mostafa Beshkar of Indiana University-Bloomington reviews “A World Trading System for the Twenty-First Century” by Robert W. Staiger. The Econlit abstract of this book begins: “Discusses the success of the General Agreement on Tariffs and Trade (GATT) and its ideal economic environment, evaluating whether twenty-first-century changes in the global economy imply the need for changes in the design of the World Trade Organization (WTO) system.”

Eric M. Leeper of Department of Economics, University of Virginia reviews “A Monetary and Fiscal History of the United States, 1961-2021” by Alan S. Blinder. The Econlit abstract of this book begins: “Examines monetary and fiscal policy in the United States since the 1960s, chronicling how stabilization policy struggled to fight recessions, unemployment, and inflation.”

Kaushik Basu of Cornell University reviews “Prioritarianism in Practice” edited by Matthew D. Adler and Ole F. Norheim. The Econlit abstract of this book begins: “Twelve papers explore the use of prioritarianism as a methodology for evaluating governmental policy, highlighting the value of giving extra weight to the well-being of the worse off in policy assessment across a variety of domains.”

Anand V. Swamy of Williams College reviews “India Is Broken: A People Betrayed, Independence to Today” by Ashoka Mody. The Econlit abstract of this book begins: “Presents a narrative of the modern history of India from the perspectives of successive Indian leaders, chronicling the erosion of social norms and decay of political accountability from 1947 to 2021 that have detrimentally affected the country's economy and political system.”

Robert Mendelsohn of Yale School of the Environment, Department of Economics, and Yale School of Management reviews “Climate Future: Averting and Adapting to Climate Change” by Robert S. Pindyck. The Econlit abstract of this book begins: “Explores the extent and nature of the uncertainty of climate change's impact on the economy and society, promoting the argument that climate policy should focus on adaptation in preparation for the unlikelihood of sufficiently reducing greenhouse gas emissions.”

Amitabh Chandra of Harvard University reviews “We’ve Got You Covered: Rebooting American Health Care” by Liran Einav and Amy Finkelstein. The Econlit abstract of this book begins: “Considers the objective and key elements of universal health insurance, presenting a blueprint for overhauling the US health-care system to guarantee essential medical coverage for everyone.”

Abhinav Gupta of Kenan-Flagler Business School, UNC Chapel Hill reviews “The Market Power of Technology: Understanding the Second Gilded Age” by Mordecai Kurz. The Econlit abstract of this book begins: “Examines the relationship between economic inequality and the technological market power of firms, considering its policy implications in light of the history of income and wealth inequality since 1889.”

Samuel Bowles of Santa Fe Institute and CORE Econ reviews “The Dawn of Everything: A New History of Humanity” by David Graeber and David Wengrow. The Econlit abstract of this book begins: “Presents an interpretation of human history that revises long-held assumptions about the emergence of social inequality and hierarchy, considering the implications of this counternarrative for accounts of the origins of farming, property, cities, democracy, slavery, and civilization itself.”

Using a novel regional database covering over 200 elections in several European countries, this paper provides new empirical evidence on the political consequences of fiscal consolidations. To identify exogenous reductions in regional public spending, we use a Bartik-type instrument that combines regional sensitivities to changes in national government expenditures with narrative national consolidation episodes. Fiscal consolidations lead to a significant increase in extreme parties' vote share, lower voter turnout, and a rise in political fragmentation. We highlight the close relationship between detrimental economic developments and voters' support for extreme parties by showing that austerity induces severe economic costs through lowering GDP, employment, private investment, and wages. Austerity-driven recessions amplify the political costs of economic downturns considerably by increasing distrust in the political environment.