T HE NEW International Encyclopedia of the Social Sciences has already received the attention it rightly deserves. It is a worthy sequel the Encyclopedia of the Social Sciences which has, since its publication in the early 1930s, become badly outdated with respect both facts and theoretical developments in rapidly moving disciplines. The IESS is a wholly new product, not merely a revision of the earlier work. Its editors set themselves the task to make available readers throughout the world the concepts, principles, theories, methods, and empirical regularities that characterize the social sciences today (vol. 1, p. xxiii) and urged contributors include historical and descriptive material illustrate concepts and theories, rather than for its own sake. The publication coming from this effort contains 1716 articles-598 are biographical entries-bound in 17 volumes (including an extensive index) and selling for $503 a set, postpaid. (The Preface reports that the publisher was willing invest $2 million in the enterprise.) Casual perusal of the articles suggests that the editors were successful and early sales support this: an initial printing of 10,000 was sold out within five months, and the set went into a second printing of similar size. The buyers, I am told, include a large number of high schools, using Title II funds under the Federal Elementary and Secondary School Act. The purpose of this review is draw attention the non-biographical entries dealing with international economics. Sixteen articles deal directly with intemational economics, that is, with subjects that might be covered in a college course of that title. Many others, such as those on central banking, foreign aid (economic), mercantilism, spatial economics, and a number of the biographies, of course are also relevant international economics. About the same number of articles on international economcs appeared in the earlier Encyclopedia, and by rough calculation the share of international economics in the total material remained unchanged at 1.2 percent. But while in the earlier Encyclopedia 39 percent of the total coverage represented topics in economics, in the IESS this share dropped 14 percent [3, Sills, 1969, p. 1173]. No doubt this reflects not only the change in principal editorship from two economists (E.R.A. Seligman and Alvin Johnson) a sociologist (David Sills) but also the relative growth during the past generation of anthropology, sociology, statistics, and (especially) psychology. Thus international economists can take some satisfaction that the relative importance of their field within the discipline of economics seems have risen sharply; or else international economists are more prolix than their closed economy counterparts. Thirteen of the sixteen articles on international economics are grouped under three broad headings: international monetary economics is covered by R. A. Mundell

for at least three reasons. First, it is fun. A skillful narrator and analyst can bring alive exciting or important events, and that is enjoyable. Second, a study of history alerts economists to two important but usually neglected characteristics of economies, namely that they are sometimes strongly influenced by noneconomic factors-not only wars, but political impasses, charismatic leaders, or ideological beliefs deeply rooted in public or official psychology-and that contrary to what is usually assumed in formal modeling, the structure of economies changes over time as public attitudes change and as institutions evolve. Third, economists should study history, at least relatively recent history, because it is usually impossible to understand our institutions and attitudes without some appreciation of the events that shaped the legacy from our parents and grandparents. Barry Eichengreen has written a book that is likely for some time to become the standard reference on monetary and financial developments during the interwar period, 1919-1936.' It is traditional history, telling a story, or rather a series of stories, with more tables and charts and a stronger reliance on economic concepts than most histories, but little econometrics and no formal modeling. The interwar period, which contains what is still the most dramatic and traumatic economic event of the past century, the Great Depression, left a strong imprint on contemporary American, European, and world institutions and attitudes, such as the Securities and Exchange Commission, the Glass-Steagall Act requring the separation of banking from other activities, and the International Monetary Fund. In addition to telling an interesting story, Eichengreen helps us interpret those events in ways that may have lessons for the future as well. Eichengreen's most significant conclusion is that the Great Depression was due to attempts to adhere to a restored gold standard with inadequate international cooperation to make it work. That flawed behavior, in turn, must be understood in light of experience in the early 1920s, especially in three critical countries-France, Germany, and the United States. As the interwar period may not be well known to most readers of this Journal, I first sketch the main economic and political events. The next section indicates the influence of these events on post-World War II international institutions and behavior. I turn then to the various explanations that have been put forward for the severity of the Great Depression, and conclude with a commentary on Eichengreen's contribution to this literature, and to our understanding of the interwar period more generally.

Introduction, 1. — I. The model, 3.— II. Comparative statics of the model, 7. — III. The policy adjustment model, 9. — IV. Numerical examples, 12. — V. Simulated policy responses, 15. — VI. Conclusions from the analysis, 22.

T HREE years ago, Seymour Harris wrote that we must solve the problem as a condition for appropriate policies for growth, employment, aid, and defense; and several contributors to his book The Dollar in Crisis called for devaluation of the as the proper and indeed the only appropriate solution to the dollar problem. But economic growth in the postwar period has been universally high by historical standards. It has been especially high in the industrial countries of Continental Europe and Japan, both in comparison with the United States and in comparison with their own past. Real GNP in the six members of the European Economic Community, for example, rose 70 per cent between 1950 and 1960 -an average annual increase of no less than 512 per cent. Japan's growth was even higher. And even postwar United States growth was substantially higher than historical trends until the late fifties. In a year in which the international payments system is under close collective scrutiny by the major industrial countries, it is worth asking what role, if any, international monetary arrangements played in stimulating this growth. Dollar deficits may in fact have made a substantial contribution, and devaluation of the dollar, far from furthering free world growth, could well slow it significantly. Undoubtedly, no single factor can claim credit for postwar growth. The war-induced disturbance to old patterns of behavior and disillusionment with the prewar, static, competitive view of the world clearly fostered receptivity to rapid change in Europe and Japan. Psychological and economic momentum, gathered during the quick restoration of output to prewar levels, contributed to the sense that rapid growth was both possible and desirable. To these intangible factors were added powerful government incentives to business investment and extensive public investment. But surelv one imDortant element in the rapid postwar expansion was the presence of high export demand for European and Japanese goodsan export demand so high that additional output could always be sold profitably as soon as it became available. High demand was due in part to the continuing growth in total world demand. But it was also due to the possibility of substituting European and Japanese manufactured goods for American goods which had sometimes been the only goods available right after the war -in home markets, in third country markets, and even in the United States market. This substitution (in the context of growing markets) proceeded on a grand scale. The share of world exports of manufactures supplied by the six members of the European Economic Community, for example, rose steadily from 33 per cent in 1951 to 46 per cent in 1961 (Japan's rise was from 4 to 7 per cent), while the United States share fell sharply during the same period. United States imports of finished manufactures rose 250 per cent from 1950 to 1960, compared with a rise in United States industrial production of only 45 per cent. European and Japanese goods could be sold easily abroad because the currency devaluations of 1949 and other postwar currency changes made them cheap relative to goods, or very profitable to export at going market prices. Crude comparisons suggest the goods and services of Western Europe had declined in price by 24 per cent relative to the prices of American goods and services between 1938 and 1953.1 In 1950, the total purchasing power of the at official exchange rates was over 30 per cent higher in many European countries than it was in the United States.2 As might be expected, the of the in Europe was considerably greater for local services than for goods which move in international trade. Some products, notably produc-