Combining powerful insights from theory with close observation of data, Robert Barro’s new book goes a long way toward the establishment of an empirically based macroeconomic theory.

Barro first presents a positive theory of government economic policymaking by using applied game theory to model strategic interactions between policymakers and the private sector. He applies this framework to questions of rules, discretion, and reputation in monetary policy. He then takes a close look at whether monetary disturbances have a strong effect on business fluctuations, concluding that the effect is neither as strong nor as pervasive as many economists have believed. He consequently turns his attention from monetary policy to fiscal policy. The originator of the modern theory of Ricardian equivalence, which says that taxes and budget deficits are logically equivalent, Barro summarizes the current debate and argues that the Ricardian theorem is the correct starting point for the analysis of intertemporal government finance. Finally, stating his belief that macroeconomists have probably spent too much time thinking about deficits—which relate to how government spending is financed—and not enough about the effects of government expenditures themselves, he examines evidence of the macroeconomic effects of government spending in the United States and Great Britain.

Economists and the governments they advise have based their macroeconomic policies on the idea of a natural rate of unemployment. Government policy that pushes the rate below this point—about 6 percent—is apt to trigger an accelerating rate of inflation that is hard to reverse, or so the argument goes. In this book, Storm and Naastepad make a strong case that this concept is flawed: that a stable non-accelerating inflation rate of unemployment (NAIRU), independent of macroeconomic policy, does not exist. Consequently, government decisions based on the NAIRU are not only misguided but have huge and avoidable social costs, namely, high unemployment and sustained inequality.

Skillfully merging theoretical and empirical analysis, Storm and Naastepad show how the NAIRU’s neglect of labor’s impact on technological change and productivity growth eclipses the many positive contributions that labor and its regulation make to economic performance. When these positive effects are taken into account, the authors contend, a more humane policy becomes feasible, one that would enhance productivity and technological progress while maintaining profits, thus creating conditions for low unemployment and wider equality.

In the mid-eighteenth century, colonial Americans became enamored with the rich colors and silky surface of mahogany. This exotic wood, imported from the West Indies and Central America, quickly displaced local furniture woods as the height of fashion. Over the next century, consumer demand for mahogany set in motion elaborate schemes to secure the trees and transform their rough-hewn logs into exquisite objects. But beneath the polished gleam of this furniture lies a darker, hidden story of human and environmental exploitation.

Mahogany traces the path of this wood through many hands, from source to sale: from the enslaved African woodcutters, including skilled “huntsmen” who located the elusive trees amidst dense rainforest, to the ship captains, merchants, and timber dealers who scrambled after the best logs, to the skilled cabinetmakers who crafted the wood, and with it the tastes and aspirations of their diverse clientele. As the trees became scarce, however, the search for new sources led to expanded slave labor, vicious competition, and intense international conflicts over this diminishing natural resource. When nineteenth-century American furniture makers turned to other materials, surviving mahogany objects were revalued as antiques evocative of the nation's past.

Jennifer Anderson offers a dynamic portrait of the many players, locales, and motivations that drove the voracious quest for mahogany to adorn American parlors and dining rooms. This complex story reveals the cultural, economic, and environmental costs of America’s growing self-confidence and prosperity, and how desire shaped not just people’s lives but the natural world.

“Thoughtful, probing…a worthy successor to the famous histories of Fairbank and Spence [that] will be read by all students and scholars of modern China.”
—William C. Kirby, coauthor of Can China Lead?

It is tempting to attribute the rise of China to Deng Xiaoping and to recent changes in economic policy. But China has a long history of creative adaptation. In the eighteenth century, the Qing Empire dominated a third of the world’s population. Then, as the Opium Wars and the Taiping Rebellion ripped the country apart, China found itself verging on free fall. More recently, after Mao, China managed a surprising recovery, rapidly undergoing profound economic and social change. A dynamic story of crisis and recovery, failure and triumph, Making China Modern explores the versatility and resourcefulness that guaranteed China’s survival, powered its rise, and will determine its future.

“Chronicles reforms, revolutions, and wars through the lens of institutions, often rebutting Western impressions.”
—New Yorker

“A remarkable accomplishment. Unlike an earlier generation of scholarship, Making China Modern does not treat China’s contemporary transformation as a postscript. It accepts China as a major and active player in the world, places China at the center of an interconnected and global network of engagement, links domestic politics to international dynamics, and seeks to approach China on its own terms.”
—Wen-hsin Yeh, author of Shanghai Splendor

In the wake of million-dollar scandals brought about by Michael Milken, Ivan Boesky, and their like, Wall Street seems like the province of rampant individualism operating at the outermost extremes of self-interest and greed. But this, Mitchel Abolafia suggests, would be a case of missing the real culture of the Street for the characters who dominate the financial news.

Making Markets, an ethnography of Wall Street culture, offers a more complex picture of how the market and its denizens work. Not merely masses of individuals striving independently, markets appear here as socially constructed institutions in which the behavior of traders is suspended in a web of customs, norms, and structures of control. Within these structures we see the actions that led to the Drexel Burnham and Salomon Brothers debacles not as bizarre aberrations, but as mere exaggerations of behavior accepted on the Street.

Abolafia looks at three subcultures that coexist in the world of Wall Street: the stock, bond, and futures markets. Through interviews, anecdotes, and the author’s skillful analysis, we see how traders and New York Stock Exchange “specialists” negotiate the perpetual tension between short-term self-interest and long-term self-restraint that marks their respective communities—and how the temptation toward excess spurs market activity. We also see the complex relationships among those market communities—why, for instance, NYSE specialists resent the freedoms permitted over-the-counter bond traders and futures traders. Making Markets shows us that what propels Wall Street is not a fundamental human drive or instinct, but strategies enacted in the context of social relationships, cultural idioms, and institutions—a cycle that moves between phases of unbridled self-interest and collective self-restraint.

The issues that dominate U.S.-Mexico border relations today—integration of economies, policing of boundaries, and the flow of workers from south to north and of capital from north to south—are not recent developments. In this insightful history of the state of Nuevo León, Juan Mora-Torres explores how these processes transformed northern Mexico into a region with distinct economic, political, social, and cultural features that set it apart from the interior of Mexico.

Mora-Torres argues that the years between the establishment of the U.S.-Mexico boundary in 1848 and the outbreak of the Mexican Revolution in 1910 constitute a critical period in Mexican history. The processes of state-building, emergent capitalism, and growing linkages to the United States transformed localities and identities and shaped class formations and struggles in Nuevo León. Monterrey emerged as the leading industrial center and home of the most powerful business elite, while the countryside deteriorated economically, politically, and demographically. By 1910, Mora-Torres concludes, the border states had already assumed much of their modern character: an advanced capitalist economy, some of Mexico's most powerful business groups, and a labor market dependent on massive migrations from central Mexico.

When, how, and why did the state enterprise system of modern China take shape? The conventional argument is that China borrowed its economic system and development strategy wholesale from the Soviet Union in the 1950s. In an important new interpretation, Morris Bian shows instead that the basic institutional arrangement of state-owned enterprise—bureaucratic governance, management and incentive mechanisms, and the provision of social services and welfare—developed in China during the war years 1937–1945.

Bian offers a new theory of institutional change that explains the formation of China’s state enterprise system as the outcome of the sustained systemic crisis triggered by the Sino–Japanese war. This groundbreaking work combines critical analysis of government policies with case studies of little-studied enterprises in heavy industries and the ordnance industry. Drawing on extensive research in previously unavailable archives, Bian adds a valuable historical perspective to the current debate on how to reform China’s sluggish and unprofitable state-owned firms.

In The Making of the Supply Chain, Remko van Hoek explores the stories of five very different supply chain pioneers—George Stephenson, Henry Ford, George Lauer, Elizabeth Dole, and J. B. Hunt—to demonstrate how innovations in supply chain management have changed the world by reshaping how we obtain our products and services.

Van Hoek reflects on these leaders’ seminal achievements in supply chain management, relates their breakthroughs to current best practices and opportunities for the future, and chronicles how other leaders have converted lessons from these Hall of Famers into new breakthroughs.

Informed by his work with the Council of Supply Chain Management Professionals (CSCMP) Supply Chain Hall of Fame,Van Hoek presents these inspiring stories in an engaging and highly accessible style.

In this compelling and rigorously documented exposition, Vandana Shiva demolishes the myths propagated by corporate globalisation in its pursuit of profit and power and shows its devastating environmental impact.

Shiva argues that consumerism lubricates the war against the earth and that corporate control violates all ethical and ecological limits. She takes the reader on a journey through the world's devastated eco-landscape, one of genetic engineering, industrial development and land-grabs in Africa, Asia and South America. She concludes that exploitation of this order is incurring an ecological and economic debt that is unsustainable.

Making Peace with the Earth outlines how a paradigm shift to earth-centred politics and economics is our only chance of survival and how collective resistance to corporate exploitation can open the way to a new environmentalism.

Mentally ill people turned out of institutions, crack-cocaine use on the rise, more poverty, public housing a shambles: as attempts to explain homelessness multiply so do the homeless—and we still don’t know why. The first full-scale economic analysis of homelessness, Making Room provides answers quite unlike those offered so far by sociologists and pundits. It is a story about markets, not about the bad habits or pathology of individuals.

One perplexing fact is that, though homelessness in the past occurred during economic depressions, the current wave started in the 1980s, a time of relative prosperity. As Brendan O’Flaherty points out, this trend has been accompanied by others just as unexpected: rising rents for poor people and continued housing abandonment. These are among the many disconcerting facts that O’Flaherty collected and analyzed in order to account for the new homelessness. Focused on six cities (New York, Newark, Chicago, Toronto, London, and Hamburg), his studies also document the differing rates of homelessness in North America and Europe, and from one city to the next, as well as interesting changes in the composition of homeless populations. For the first time, too, a scholarly observer makes a useful distinction between the homeless people we encounter on the streets every day and those “officially” counted as homeless.

O’Flaherty shows that the conflicting observations begin to make sense when we see the new homelessness as a response to changes in the housing market, linked to a widening gap in the incomes of rich and poor. The resulting shrinkage in the size of the middle class has meant fewer hand-me-downs for the poor and higher rents for the low-quality housing that is available. O’Flaherty’s tightly argued theory, along with the wealth of new data he introduces, will put the study of homelessness on an entirely new plane. No future student or policymaker will be able to ignore the economic factors presented so convincingly in this plainspoken book.

Europe’s financial crisis cannot be blamed on the Euro, Harold James contends in this probing exploration of the whys, whens, whos, and what-ifs of European monetary union. The current crisis goes deeper, to a series of problems that were debated but not resolved at the time of the Euro’s invention.

Since the 1960s, Europeans had been looking for a way to address two conundrums simultaneously: the dollar’s privileged position in the international monetary system, and Germany’s persistent current account surpluses in Europe. The Euro was created under a politically independent central bank to meet the primary goal of price stability. But while the monetary side of union was clearly conceived, other prerequisites of stability were beyond the reach of technocratic central bankers. Issues such as fiscal rules and Europe-wide banking supervision and regulation were thoroughly discussed during planning in the late 1980s and 1990s, but remained in the hands of member states. That omission proved to be a cause of crisis decades later.

Here is an account that helps readers understand the European monetary crisis in depth, by tracing behind-the-scenes negotiations using an array of sources unavailable until now, notably from the European Community’s Committee of Central Bank Governors and the Delors Committee of 1988–89, which set out the plan for how Europe could reach its goal of monetary union. As this foundational study makes clear, it was the constant friction between politicians and technocrats that shaped the Euro. And, Euro or no Euro, this clash will continue into the future.

Thomas Robert Malthus’s An Essay on the Principle of Population was an immediate succès de scandale when it appeared in 1798. Arguing that nature is niggardly and that societies, both human and animal, tend to overstep the limits of natural resources in “perpetual oscillation between happiness and misery,” he found himself attacked on all sides—by Romantic poets, utopian thinkers, and the religious establishment. Though Malthus has never disappeared, he has been perpetually misunderstood. This book is at once a major reassessment of Malthus’s ideas and an intellectual history of the origins of modern debates about demography, resources, and the environment.

Against the ferment of Enlightenment ideals about the perfectibility of mankind and the grim realities of life in the eighteenth century, Robert Mayhew explains the genesis of the Essay and Malthus’s preoccupation with birth and death rates. He traces Malthus’s collision course with the Lake poets, his important revisions to the Essay, and composition of his other great work, Principles of Political Economy. Mayhew suggests we see the author in his later writings as an environmental economist for his persistent concern with natural resources, land, and the conditions of their use. Mayhew then pursues Malthus’s many afterlives in the Victorian world and beyond.

Today, the Malthusian dilemma makes itself felt once again, as demography and climate change come together on the same environmental agenda. By opening a new door onto Malthus’s arguments and their transmission to the present day, Robert Mayhew gives historical depth to our current planetary concerns.

As millions of Americans are aware, health care costs continue to increase rapidly. Much of this increase is due to the development of new life-sustaining drugs and procedures, but part of it is due to the increased monopoly power of physicians, insurance companies, and hospitals, as the health care sector undergoes reorganization and consolidation. There are two tools to limit the growth of monopoly power: government regulation and antitrust policy. In this timely book, Deborah Haas-Wilson argues that enforcement of the antitrust laws is the tool of choice in most cases.

The antitrust laws, when wisely enforced, permit markets to work competitively and therefore efficiently. Competitive markets foster low prices and high quality. Applying antitrust tools wisely, however, is a tricky business, and Haas-Wilson carefully explains how it can be done. Focusing on the economic concepts necessary to the enforcement of the antitrust laws in health care markets, Haas-Wilson provides a useful roadmap for guiding the future of these markets.

The concept of the “visible hand” in big business enterprise, so persuasively and brilliantly argued in Alfred D. Chandler, Jr.’s prize-winning The Visible Hand: The Managerial Revolution in American Business, is tested and extended in this book. These essays show that the growth and complexity of managerial hierarchies (“visible hands”) in large business firms are central to the organization of modern industrial activity. Leading American and European historians retrace and compare the historical evolution of the contemporary giant managerial hierarchies in the United States, Britain, Germany, and France.

The first group of essays—by Chandler, Leslie Hannah, Jürgen Kocka, and Maurice Lévy-Leboyer—explores the rise of modern industrial enterprise in the West. They suggest the mechanisms and causes of the shift from the invisible hand of market coordination to the visible hand of managerial hierarchies, and attempt to pinpoint cultural and economic reasons for the persistence of transitional forms of organization in Europe. Other essays—by Morton Keller and Oliver E. Williamson—describe the legal and regulatory responses to the rise of big business and the implications of the history of the managerial revolution for students of economic development and industrial organization. The final essay, by Herman Daems, provides an overall analysis of the reasons managerial hierarchies replaced market mechanisms and agreements among firms as devices for coordination and the allocation of resources in advanced market economies.

This fresh study of the managerial revolution presents recent theoretical reflections in institutional economics and industrial organization in the light of new historical findings.

These essays by one of America's most distinguished experts in business management and human relations were written between 1928 and 1968. Some are published here for the first time. They are addressed primarily to business practitioners, but are also of considerable interest to social scientists concerned with matters of organization, administration, motivation, and communication. The essays might be said to constitute the author's adventure over a period of forty years with an idea that he felt had important implications for administrative practices.

The early pieces begin with the exposition of a new way of thinking about the behavior of people in organizations, and the research from which it arose. Some of the recent essays express concern with the way in which the area of human relations has been developing—namely, as a fad, a cult, and the way to salvation instead of as a road toward competence. Among the topics discussed are: the relation of theory to practice in administrative matters; the training and education of the generalist as opposed to the specialist; training in human relations; efficiency and cooperative behavior; the administration of change; and technical change and social organization.

This volume constitutes an achievement nowhere duplicated in the three related and critical areas of education, work, and manpower policy. It is the mature production of over a dozen years of research-endeavors by the dean of manpower studies.

In Part I Eli Ginzberg warns against simplistic reliance on prevailing models—economic, psychological, or political. There is only tenuous evidence that enormous expenditure leads to increased social benefit. Rather, we need a more appropriate framework for analyzing human resources, and we ought to be skeptical of a theory that predicates an underlying rationalism for much, if not all, human behavior. Specifically, the author doubts that education can be a substitute for the family, cure poverty or racism, assure an individual a job, give a person a decent income, or control crime and delinquency. What it can do is help students acquire basic skills and thereby help them to live and manage their lives better. The author suggests that we ought to set realistic goals for our schools and insist on accountability.

Part II turns to work and its discontents. Ginzberg examines the changing role of women, the position of blue-collar workers, labor reforms suggested in America and abroad, and the place of the work ethic.

Part III focuses mostly on public employment policy, which can improve the manpower system but can only be a minor instrument for promoting economic growth, redistributing income, shifting consumer demand to public services, or eliminating substandard jobs. The discussion will be eagerly read by those seeking to generate jobs for the unemployed.

Banks failed, credit contracted, inequality grew, and people everywhere were out of work while political paralysis and slavery threatened to rend the nation in two. As financial crises always have, the Panic of 1837 drew forth a plethora of reformers who promised to restore America to greatness. Animated by an ethic of individualism and self-reliance, they became prophets of a new moral order: if only their fellow countrymen would call on each individual’s God-given better instincts, the most intractable problems could be resolved.

Inspired by this reformist fervor, Americans took to strict dieting, water cures, phrenology readings, mesmerism, utopian communities, free love, mutual banking, and a host of other elaborate self-improvement schemes. Vocal activists were certain that solutions to the country’s ills started with the reformation of individuals, and through them communities, and through communities the nation. This set of assumptions ignored the hard political and economic realities at the core of the country’s malaise, however, and did nothing to prevent another financial panic twenty years later, followed by secession and civil war.

Focusing on seven individuals—George Ripley, Horace Greeley, William B. Greene, Orson Squire Fowler, Mary Gove Nichols, Henry David Thoreau, and John Brown—Philip Gura explores their efforts, from the comical to the homicidal, to beat a new path to prosperity. A narrative of people and ideas, Man’s Better Angels captures an intellectual moment in American history that has been overshadowed by the Civil War and the pragmatism that arose in its wake.

What will work eventually look like? This is the question at the heart of this timely collection. The editors and contributors—a mix of policy experts, academics, and advocates—seek to reframe the typical projections of the “future” of work. They examine the impact of structural racism on work, the loss of family‑sustaining jobs, the new role of gig work, growing economic inequality, barriers to rewarding employment such as age, gender, disability, and immigration status, and the business policies driving these ongoing challenges. 

Together the essays present varied and practical insights into both U.S. and global trends, discuss the role of labor activism in furthering economic justice, and examine progressive strategies to improve the experience of work, wages, and the lives of workers. The Many Futures of Work offers a range of viable policies and practices that can promote rewarding employment and steer our course away from low-wage, unstable jobs toward jobs that lead to equitable prosperity and economic inclusion.

The Brotherhood of Sleeping Car Porters (BSCP) was the first national trade union for African Americans. Standard BSCP histories focus on the men who built the union. Yet the union's Ladies' Auxiliary played an essential role in shaping public debates over black manhood and unionization, setting political agendas for the black community, and crafting effective strategies to win racial and economic justice. 

Melinda Chateauvert explores the history of the Ladies' Auxiliary and the wives, daughters, and sisters of Pullman porters who made up its membership and used the union to claim respectability and citizenship. As she shows, the Auxiliary actively educated other women and children about the labor movement, staged consumer protests, and organized local and national civil rights campaigns ranging from the 1941 March on Washington to school integration to the Montgomery Bus Boycott. Chateauvert also sheds light on the plight of Pullman maids, who—relegated to the Auxiliary—found their problems as working women neglected in favor of the rhetoric of racial solidarity.

Unemployment levels have received a great deal of attention and discussion in recent years. However, another labor category—underemployment—has virtually been ignored. Underutilized or underemployed workers are those who are experiencing inadequate hours of work, insufficient levels of income, and mismatch of occupation and skills. Marginal Workers, Marginal Jobs addresses two principal issues: how can we measure underemployment, and how can we explain its prevalence?

To answer the first question, Teresa Sullivan examines yardsticks in use, demonstrates their inadequacy, and develops a different measure that is easy to interpret and is usable by both demographers and economists. In answering the second, she analyzes 1960 and 1970 census data to determine the relative effects of population composition and job structure on levels of employment.

One of the important contributions of Sullivan's study is to distinguish between marginal workers and marginal jobs in explaining underutilization. Previous explanations, including the widely used dual market theory, have not stressed this analytic distinction. In addition, her work accounts separately for the various types of marginality and seeks to show the condition of workers who are marginal on more than one count—for example, those who are both young and black, or old and female.

A provocative study based on large samples of the U.S. population, this book raises important questions about a critical subject and makes a significant contribution to the theory of underutilization.

The United States Marine Corps has a unique culture that ensures comradery, exacting standards, and readiness to be the first to every fight. Yet even in a group that is known for innovation, culture can push leaders to fall back on ingrained preferences. Jeannie L. Johnson takes a sympathetic but critical look at the Marine Corps's long experience with counterinsurgency warfare. Which counterinsurgency lessons have been learned and retained for next time and which have been abandoned to history is a story of battlefield trial and error—but also a story of cultural collisions.

The book begins with a fascinating and penetrating look inside the culture of the Marine Corps through research in primary sources, including Marine oral histories, and interviews with Marines. Johnson explores what makes this branch of the military distinct: their identity, norms, values, and perceptual lens. She then traces the history of the Marines' counterinsurgency experience from the expeditionary missions of the early twentieth century, through the Vietnam War, and finally to the Iraq War. Her findings break new ground in strategic culture by introducing a methodology that was pioneered in the intelligence community to forecast behavior. Johnson shows that even a service as self-aware and dedicated to innovation as the Marine Corps is constrained in the lessons-learned process by its own internal predispositions, by the wider US military culture, and by national preferences. Her findings challenge the conclusions of previous counterinsurgency scholarship that ignores culture. This highly readable book reminds us of Sun Tzu's wisdom that to be successful in war, it is important to know thyself as well as the enemy. This is a must-read for anyone interested in the Marines Corps, counterinsurgency warfare, military innovation, or strategic culture.

“Essential and thoroughly engaging…Harvey Cox’s ingenious sense of how market theology has developed a scripture, a liturgy, and sophisticated apologetics allow us to see old challenges in a remarkably fresh light.”
—E. J. Dionne, Jr.

We have fallen in thrall to the theology of supply and demand. According to its acolytes, the Market is omniscient, omnipotent, and omnipresent. It can raise nations and ruin households, and comes complete with its own doctrines, prophets, and evangelical zeal. Harvey Cox brings this theology out of the shadows, demonstrating that the way the world economy operates is shaped by a global system of values that can be best understood as a religion.

Drawing on biblical sources and the work of social scientists, Cox points to many parallels between the development of Christianity and the Market economy. It is only by understanding how the Market reached its “divine” status that can we hope to restore it to its proper place as servant of humanity.

“Cox argues that…we are now imprisoned by the dictates of a false god that we ourselves have created. We need to break free and reclaim our humanity.”
—Forbes

“Cox clears the space for a new generation of Christians to begin to develop a more public and egalitarian politics.”
—The Nation

Long before Deng Xiaoping’s market-based reforms, commercial relationships bound the Chinese Communist Party to international capitalism and left lasting marks on China’s trade and diplomacy.

China today seems caught in a contradiction: a capitalist state led by a Communist party. But as Market Maoists shows, this seeming paradox is nothing new. Since the 1930s, before the Chinese Communist Party came to power, Communist traders and diplomats have sought deals with capitalists in an effort to fuel political transformation and the restoration of Chinese power. For as long as there have been Communists in China, they have been reconciling revolutionary aspirations at home with market realities abroad.

Jason Kelly unearths this hidden history of global commerce, finding that even Mao Zedong saw no fundamental conflict between trading with capitalists and chasing revolution. China’s ties to capitalism transformed under Mao but were never broken. And it was not just goods and currencies that changed hands. Sustained contact with foreign capitalists shaped the Chinese nation under Communism and left deep impressions on foreign policy. Deals demanded mutual intelligibility and cooperation. As a result, international transactions facilitated the exchange of ideas, habits, and beliefs, leaving subtle but lasting effects on the values and attitudes of individuals and institutions.

Drawing from official and commercial archives around the world, including newly available internal Chinese Communist Party documents, Market Maoists recasts our understanding of China’s relationship with global capitalism, revealing how these early accommodations laid the groundwork for China’s embrace of capitalism in the 1980s and after.

Market signaling, a phrase formulated by A. Michael Spence, means the activities and characteristics of individuals which are visible to somebody else and convey information in a market, such as the job market. This study attempts to explain the informational content of market signals.

In many markets, people are screened. Employers screen job applicants. Banks screen loan applicants. In screening processes like these, the attributes of individuals, such as education, previous experience, personal appearance, sex, and race may be read as signals. Thus education may be a signal of an ability to do a certain kind of job. Spence finds that when education is regarded as a job-market signal there is a systematic tendency to overinvest in it.

The author also extends the concept of “market equilibrium” to include signaling. A signaling equilibrium, when applied to a job market, is defined as a situation in which employers’ beliefs about the relationship between (1) applicants’ signals and (2) their productivity are confirmed by their performance after they are hired. Spence uses this concept to derive insights into the efficiency of a market system for allocating jobs to people and people to jobs. His approach gives economists and policy makers a way of looking at the welfare properties of various signals and of studying the informational structures of particular markets.

Martin Shubik brings classical oligopoly theory and research in mathematical economics close to new studies in industrial organization and simple game experiments in this imaginative and important new work. He engages the reader by creating a market model and by explaining its availability as a computer program, thus promoting interest in game experiments. In all, he admirably succeeds in increasing our understanding of the meaning of competitive and cooperative behavior and of market structure.

This unusual book covers a variety of topics: economic explanation, model building, analyses of duopoly and oligopoly, product differentiation, contingent demand, demand fluctuations, the study of non-symmetric markets, and advertising. All of these parts of Shubik's overall pattern of interpretation may also be used in a game which, more or less, coincides with the exposition of theory and the subject matter of accounting. A complete linking of basic accounting items to the oligopoly model and theory is made. Shubik bridges the gap between information as it appears to the businessman—the player in the game—and the economic model and abstraction of the market as it appears to the economic theorist.

A staunch neoclassical economist, Sherwin Rosen drew inspiration from Adam Smith's Wealth of Nations, particularly his theory of compensating wage differentials, which Rosen felt was central to all economic problems involving product differentiation and spatial considerations. The main theme of his collection is how markets handle diversity, including the determination of value in the presence of diversity, the allocation of idiosyncratic buyers to specialized sellers, and the effects of heterogeneity and sorting on inequality.

Rosen felt that good economics required combining simple but powerful concepts such as optimizing and equilibrium with careful empirical analysis. It was important for the relatively simple rules of behavior implied by rationality to have useful, empirically descriptive content and predictive power. If they did, it was often possible to infer underlying structure (tastes and technology, for example) from actual behavior. Using this approach, Rosen was able to develop powerful insights into such phenomena as the enormous salaries paid to sports and entertainment stars and top business executives. He also explored with fruitful results the premium paid to workers in risky jobs, learning and experience in the labor market, and other labor market phenomena.

A colorful history of US research universities, and a market-based theory of their global success.

American education has its share of problems, but it excels in at least one area: university-based research. That’s why American universities have produced more Nobel Prize winners than those of the next twenty-nine countries combined. Economist Miguel Urquiola argues that the principal source of this triumph is a free-market approach to higher education.

Until the late nineteenth century, research at American universities was largely an afterthought, suffering for the same reason that it now prospers: the free market permits institutional self-rule. Most universities exploited that flexibility to provide what well-heeled families and church benefactors wanted. They taught denominationally appropriate materials and produced the next generation of regional elites, no matter the students’—or their instructors’—competence. These schools were nothing like the German universities that led the world in research and advanced training. The American system only began to shift when certain universities, free to change their business model, realized there was demand in the industrial economy for students who were taught by experts and sorted by talent rather than breeding. Cornell and Johns Hopkins led the way, followed by Harvard, Columbia, and a few dozen others that remain centers of research. By the 1920s the United States was well on its way to producing the best university research.

Free markets are not the solution for all educational problems. Urquiola explains why they are less successful at the primary and secondary level, areas in which the United States often lags. But the entrepreneurial spirit has certainly been the key to American leadership in the research sector that is so crucial to economic success.