Knowledge that Transforms

This paper examines the multigenerational impact of children and whether the public provision of formal childcare lessens the earnings and employment impacts of children. We find that the arrival of a firstborn reduces employment and earnings of mothers and employment of grandmothers. Studying a universal childcare program in Quebec, we find that formal childcare increases the employment rates of mothers as well as that of grandmothers to a lesser extent. Examining heterogeneity of the program’s impact across census divisions, we find a negative correlation between the positive effects on mothers’ employment and the prepolicy supply of informal childcare by grandmothers.

Ethan Ilzetzki of London School of Economics reviews “King Dollar: The Past and Future of the World’s Dominant Currency” by Paul Blustein. The Econlit abstract of this book begins: “Explores the US dollar's rise to global prominence, assessing the resilience of the dollar's dominance and its implications for US power and responsibility.”

Michael D. Bordo of Rutgers University reviews “Shock Values: Prices and Inflation in American Democracy” by Carola Binder. The Econlit abstract of this book begins: “Explores how price fluctuations and attempts to manage them have shaped American democracy, analyzing examples of the disparate impacts of price fluctuations and their political consequences.”

Adam Looney of David Eccles School of Business, University of Utah, and the Brookings Institution reviews “Bankers in the Ivory Tower: The Troubling Rise of Financiers in US Higher Education” by Charlie Eaton. The Econlit abstract of this book begins: “Explores the relationship between rising student loan debt and the growth of concentrated endowment wealth, explaining how the resurgent power of financiers is tied to increasing inequality in higher education and America as a whole.”

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.

This multi-book review argues that identity-driven polarization interacts with institutional design to erode democratic guardrails. Reading Heather Cox Richardson’s Democracy Awakening, Tom Schaller, and Paul Waldman’s White Rural Rage, and Ezra Klein’s Why We’re Polarized through an economist’s lens, I emphasize two claims. First, when institutions fail to deliver broadly shared security and dignity, anti-pluralist projects gain legitimacy and room to maneuver. Second, questions of belonging, citizenship, and the obligations of government to the people are informed by culture and institutional trust. The culture of the United States is not one that lends itself readily to ethno-nationalism, but these books make a case for an America that is, and perhaps has always, been divided by notions of who “we” are. I situate the books within the economics literature on populism, polarization, and institutions, and examine what we can learn about rebuilding both prosperity and democratic resilience in the United States. (JEL D02, D72, D91, J11, J15, Z13)

David Autor of Massachusetts Institute of Technology and NBER reviews “The Means of Prediction: How AI Really Works (and Who Benefits)” by Maximilian Kasy. The Econlit abstract of this book begins: “Presents a framework for understanding how artificial intelligence (AI) will proceed in a society that is shaped by power and inequality, focusing on the limits of AI and how it can be made to work for all people.”

Raimundo Soto of Pontificia Universidad Catolica de Chile reviews “The Chile Project: The Story of the Chicago Boys and the Downfall of Neoliberalism” by Sebastian Edwards. The Econlit abstract of this book begins: “Explores the rise and fall of the neoliberal model installed by US-influenced economists in Chile during the dictatorship of Augusto Pinochet, highlighting the persistent inequality and struggle for income and wealth distribution underlying the Chilean model's success.”

Matthew Basilico of Harvard University reviews “Madness and Enterprise: Psychiatry, Economic Reason, and the Emergence of Pathological Value” by Nima Bassiri. The Econlit abstract of this book begins: “Explores how economic reasoning has been adopted by psychiatric clinicians and researchers in order to facilitate diagnostic assessments about potential psychiatric patients on the basis of their apparent economic behaviors, focusing on how economic value came to comprise part of the ontology of madness.”