Knowledge that Transforms

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. An Index of Authors of New Books appearing in the Annotated Listings will appear at the end of the General Index in the December issue.

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. An Index of Authors of New Books appearing in the Annotated Listings will appear at the end of the General Index in the December issue.

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit, and www.e-JEL.org . 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.”

The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit, and www.e-JEL.org . 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.”

Peter Isard's recent book (Globalization and the International Financial System: What's Wrong and What Can be Done?, Cambridge University Press, 2005) provides a thoughtful and balanced review of the scholarly literature on the past operation and potential reform of the international monetary and financial system. The author's approach, from which much can be learned, is to draw lessons from the history of exchange rates and capital flows and, especially, from the financial crises of the 1990s. But this retrospective focus is also revealing of what is new and different about our current international monetary and financial environment and in the ongoing debate surrounding the future of its steward, the International Monetary Fund.

The list below specifies doctoral degrees conferred by U.S. and Canadian universities during academic year July 2005 to June 2006. Lists of degree recipients and subject classifications are provided by the university. Note: Dissertations without classifications may be found under “Y Miscellaneous Categories.”

This essay reviews and criticizes Vermeij's Nature: An Economic History and places it in the context of evolutionary economics. Vermeij presents a natural history written in what he considers economic terms and argues that biologists should know more about economics. While the exchanges between economics and biology can sometimes be hazardous and misleading, quite a bit could be learned by economists from reading this book.

Steven Shavell's Foundations of Economic Analysis of Law (Harvard University Press, 2004) is a major theoretical contribution to “law and economics,” the applied field of economics that studies the economic properties and consequences of legal doctrines and institutions. It is a field of immense practical importance, but unfamiliar to many economists—a situation that Shavell's book bids fair to rectify. This review essay situates Shavell's book in the history of economic scholarship about law and uses the book as a springboard for speculation about new directions in that scholarship.

Stanley Fischer was deputy managing director of the IMF from 1994 to 2001 and, perhaps more than any other individual, he personifies the international “rapid response” to financial crises in the 1990s. This book is a collection of essays written during his tenure at the IMF; taken together, the essays represent the strongest and most logical defense of IMF initiatives in the 1990s in print. My review essay comprises six parts. In parts 2 through 4, I provide an overview of Fischer's arguments in three central areas of contention: stabilization policy, the impact of IMF programs on poverty, and the IMF's anticipation of and response to international financial crisis. I then compare Fischer's arguments to those raised by the IMF's critics during that period. The controversial issues of these parts can be resolved only through empirical investigation but, on the issues of greatest importance from the financial crises of the 1990s, both Fischer and the IMF's critics make logically consistent arguments with little empirical support. In part 5, I review the recent empirical literature to illuminate what evidence has been found in support of—or counter to—the assertions of Fischer and the IMF's critics. Part 6 provides conclusions and suggestions for follow-on empirical research.

Saving Capitalism from the Capitalists is an ambitious probe into capitalism's past, present, and future. Whereas Joseph A. Schumpeter viewed capitalism as doomed because it was losing its political and social supports, Rajan and Zingales see it more as threatened from within by established or “incumbent” industrialists and financiers who become enemies of free markets. The authors contend that free financial markets foster economic progress while undermining the ability of incumbents to have their way. Rajan and Zingales may overstate the significance of “the great reversal” of financial development in the middle decades of the twentieth century, and their evidence and interpretations are sometimes flawed. Nonetheless, they make a strong case for the fundamental importance of financial development for economic modernization and their warnings about the antimarket tendencies of incumbents are well worth pondering.