Knowledge that Transforms

Helen Levy of University of Michigan reviews “Medicine and the Market: Equity v. Choice” by Daniel Callahan, Angela A. Wasunna,. The EconLit Abstract of the reviewed work begins “Explores the place of market theory and practice in medicine and health care. Discusses the origins of medicine and the market--from Adam Smith to HMOs; a tale of two cultures--Canada and the United States; the endurance of solidarity--universal health care in Western Europe and elsewhere; the market in developing countries--an ongoing experiment; the market wild card--pharmaceuticals; the value of the market--what the evidence shows; and the future of the market in health care--undercurrents from the past, riptides from the future. Callahan is Director of International Programs, and Wasunna is Associate for International Programs, at the Hastings Center. Index.”

William M. Gentry of Williams College reviews “Behavioral Public Finance” by Edward J. McCaffery, Joel Slemrod,. The EconLit Abstract of the reviewed work begins “Twelve papers explore several facets of economic life and ask how behavioral research can increase public welfare. Papers discuss the move toward an agenda for behavioral public finance; statistical, identifiable, and iconic victims; distinguishing between cognitive biases; masking redistribution or its absence; mispredicting utility and the political process; hyperopia in public finance; value added tax compliance; trust and taxation; tax evasion--artful or artless dodging; accounting for social security benefits; saving for retirement on the path of least resistance; and second-order rationality. McCaffery is Robert C. Packard Trustee Chair in Law and Political Science at the University of Southern California. Slemrod is Paul W. McCracken Collegiate Professor of Business Economics and Public Policy at the University of Michigan. Index.”

Barry O'Neill of University of California, Los Angeles reviews “Trust and Mistrust in International Relations” by Andrew H. Kydd,. The EconLit Abstract of the reviewed work begins “Uses game theory to investigate the role of trust and mistrust in international relations and the Cold War. Presents a model of trust in the context of the security dilemma. Examines the spiral model, which illustrates how trust can be eroded by competitive behavior. Studies the beginning of the Cold War and the increasing distrust between the United States and the Soviet Union as an instance of this phenomenon. Examines trust and cooperation under hegemony; presents a trust game involving multiple actors, which may have different interests, geographical situations, and relative capabilities; and applies the model to study post-World War II European cooperation between the United States, Germany, and the rest of Europe. Presents a model of reassurance via costly signals in which states can reassure each other by running risks of exploitation by the other side. Analyzes the end of the Cold War in these terms, focusing on the process of reassurance that took place between East and West, as Mikhail Gorbachev tried to reassure the West that the Soviet Union had changed from an expansionist state to a security seeker. Kydd is Associate Professor of Government at Harvard University. Bibliography; index.”

Bernard Hoekman of World Bank reviews “Economic Justice in an Unfair World: Toward a Level Playing Field” by Ethan B. Kapstein,. The EconLit Abstract of the reviewed work begins “Explores the debate over what constitutes a fairer, more just world economy--a level playing field for global economic transactions. Addresses the distributive complications that lie at the heart of controversies over economic justice. Discusses normative questions about how scarce foreign aid funds should be distributed among nations. Studies issues in migration and labor standards as a way of addressing the broader topic of the conflicts in values that must inevitably arise among the members of an interdependent economic system. Considers relations between multinational firms and developing-world governments, and what might constitute a level playing field between them. Discusses how the major international institutions seem to conceptualize the problem of economic justice in the world today and maps the contours of some politically feasible changes with respect to contemporary economic arrangements. Kapstein is Paul Dubrule Professor of Sustainable Development at INSEAD. Bibliography; index.”

Andre C. Silva of Universidade Nova de Lisboa reviews “Monetary and Wage Policies in the Euro Area” by Michael Carlberg,. The EconLit Abstract of the reviewed work begins “Studies the interactions between monetary and wage policies in the euro area. Discusses basic models of a monetary union; monetary interactions between Europe and America; wage interactions between Germany and France; monetary and wage interactions--intermediate and advanced models; and rational policy expectations. Carlberg is at Helmut Schmidt University. Index.”

Isabelle Perrigne of Pennsylvania State University reviews “An Introduction to the Structural Econometrics of Auction Data” by Harry J. Paarsch, Han Hong,. The EconLit Abstract of the reviewed work begins “Explores the empirical analysis of field data from auctions. Discusses an overview of auction theory; Vickrey and English auctions; first-price, sealed-bid, and Dutch auctions; and multi-unit auctions. Appendices include information on transformation of random variables; order statistics; simulation; asymptotic methods; evaluating estimators; estimation strategies; numerical methods; and a high-level programming environment. Includes end-of-chapter exercises and a CD-ROM that contains sample computer code and data sets. Paarsch is Professor of Economics and Robert Jensen Research Fellow at the Henry B. Tippie College of Business, University of Iowa. Hong is Professor of Economics at Duke University. Name and subject indexes.”

David K. Levine of Washington University in St. Louis reviews “Beyond Individual Choice: Teams and Frames in Game Theory” by Michael Bacharach,. The EconLit Abstract of the reviewed work begins “Proposes a revision of game theory that resolves long-standing problems of explanations for human coordination and cooperation. Based on an unfinished book that the author was working on at the time of his death in 2002. Explores variable frame theory and how it can be used to transform pure coordination games into Hi-Lo games. Discusses the place of groups in our life, and in the way we model our life, in terms of a theory of group activity. Considers the evolution of group action. Examines team reasoning. The late Bacharach was Professor of Economics at the University of Oxford. Index.”

Roger Bolton of Williams College reviews “Geography and Economy: Three Lectures” by Allen J. Scott,. The EconLit Abstract of the reviewed work begins “Three lectures, which formed the basis of the Clarendon Lectures in Geography and Environmental Studies presented at Oxford University in May 2005, explore several theoretical and practical questions found at the juncture where geography and economy meet. Discusses the division of labor and the ways in which it intertwines with locational outcomes at every scale of analysis; the creative field as a grid of spatial relationships that functions as a powerful stimulus of entrepreneurship and innovation; and the regional bases of economic take-off and development. Scott is Distinguished Professor of Public Policy and Geography at the University of California, Los Angeles. Index.”

Linda T. M. Bui of Brandeis University reviews “Solar Revolution: The Economic Transformation of the Global Energy Industry” by Travis Bradford,. The EconLit Abstract of the reviewed work begins “Outlines the path by which the transition to solar technology and sustainable energy practices will occur. Discusses the inevitability of solar energy; a new path on the horizon; a brief history of energy; an unsustainable status quo; the field of alternatives; solar energy; modern electric utility economics; the emergence of distributed economics; solar electricity in the real world; tools for acceleration; and facing the inevitable. Bradford is President and Founder of the Prometheus Institute for Sustainable Development. Index.”

Jan De Loecker of New York University reviews “Global Integration and Technology Transfer” by Bernard Hoekman, Beata Smarzynska Javorcik,. The EconLit Abstract of the reviewed work begins “Thirteen papers explore how trade and foreign direct investment (FDI) can help increase economic growth by allowing firms to tap into and benefit from the global pool of knowledge. Papers discuss lessons from empirical research on international technology diffusion through trade and foreign direct investment (Bernard Hoekman and Beata Smarzynska Javorcik); econometric versus case study approaches to technology transfer (Howard Pack); foreign direct investment, linkages, and technology spillovers (Kamal Saggi); plant- and firm-level evidence on “new” trade theories (James R. Tybout); the quantity and quality of knowledge--the impact of openness and foreign R&D on north-north and north-south technology spillovers (Maurice Schiff and Yanling Wang); the knowledge content of machines--north-south trade and technology diffusion (Giorgio Barba Navaretti, Schiff, and Isidro Soloaga); exports and economic performance--evidence from a panel of Chinese enterprises (Aart Kraay); foreign investment and productivity growth in Czech enterprises (Simeon Djankov and Hoekman); technological leadership and the choice of entry mode by foreign investors (Javorcik); whether FDI increases the productivity of domestic firms--in search of spillovers through backward linkages (Javorcik); product quality, productive efficiency, and international technology diffusion--evidence from plant-level panel data (Kraay, Soloaga, and Tybout); market discipline and corporate efficiency--evidence from Bulgaria (Djankov and Hoekman); and innovation in… Index.”