By Olivier Blanchard.
Prentice Hall; 687 pages; $67 and £26.95
EVER wish that you had learnt more economics at university? Now is the time to catch up. Olivier Blanchard's new introduction to macroeconomics is a textbook that (almost) doubles as teacher too. Full of real-world examples, clearly constructed and written in lively prose, it is an enjoyable as well as educational read.
“Macroeconomics” begins with a discussion of short-run equilibrium in goods and financial markets. Step by step, Mr Blanchard explains what determines output and interest rates. But, unlike most textbooks, his soon moves on, bringing in the role of expectations and the impact of economic openness. Once the dynamics of the labour market and the determinants of long-run growth are added, the reader has a comprehensive tool-kit for understanding how an economy works.
Along the way, Mr Blanchard shows how this analytical framework can be put to use in understanding real policy issues from deficit-reduction in the United States to unemployment in Europe. With an accompanying CD-ROM students can simulate the models he describes. Mr Blanchard's audience should go well beyond undergraduates.
BUSINESS CYCLES. By Lars Tvede.
Harwood Academic Publishers; 274 pages; $19.99 and £30
IT IS now fashionable to declare the business cycle dead, especially in the United States. As that country's economy shows no signs of faltering after seven years of growth, ever more investors are beginning to wonder whether recessions are a relic of the past. Those tempted to take such a Panglossian view should read “Business Cycles”.
Lars Tvede has written a crisp history of the theory of business cycles and the characters associated with them. He begins with John Law, whose recommendation that France introduce paper money to pay off the national debt produced a great boom followed by great bust, and then proceeds to trace economists' understanding of cyclical booms and busts from Adam Smith to chaos theory.
Pedants will wince at some of his more egregious theoretical simplifications. But for everybody else, this history is both entertaining and informative.
THE GREAT WAVE.;; £25 and $30
By David Hackett Fischer.
Oxford University Press
THE past 900 years have seen four great waves of price inflation. These “price-revolutions” occurred in the 13th, 16th, 18th and 20th centuries, and showed remarkably similar characteristics. Led by food and other basic goods, prices began to rise slowly, almost undiscernibly. Gradually, however, inflation gathered momentum, real wages fell and inequality increased. Violence, crime, alcoholism, drug addiction and family breakdowns all increased as price revolutions progressed. Finally, each price-wave ended in a wrenching social, political and economic upheaval.
The inflation rate associated with each price revolution has risen, but the degree of upheaval has weakened. Thus, though the 13th century price rises shattered the civilisation of the time, the end of the 20th-century price wave is unlikely to do the same.
That, in short, is the thesis of David Fischer's sweeping historical tour. Detailed price records form the empirical backbone of a story that begins in Chartres cathedral in the early 13th century and ends with the Federal Reserve's anti-inflationary policies of the 1980s and 1990s. Revolutions, wars and plagues accompany inflationary waves; peace, prosperity and progress are the handmaidens of the intervening periods of stability.
Understanding these waves, Mr Fischer reckons, demands more than a purely economic analysis. Inflation is not just a monetary phenomenon. He shows convincingly, for instance, that European price rises in the 16th century predated the inflow of gold from the Americas. Instead, he argues, an explanation is needed that integrates “ecological, demographic, social, monetarist and economic factors”. Unfortunately, Mr Fischer's own attempts at providing one are not convincing. No matter. Ignore the conclusion and enjoy a provocative and thoughtful journey through history.
WORLD DEVELOPMENT INDICATORS 1997. CD-ROM
World Bank; 377 pages; $60.
INFORMATION overload, rather than a scarcity of statistics, characterises today's world. The challenge lies in collating and organising information in such a way that it can easily be used. The World Bank—the main source of economic data on developing countries—has thoroughly overhauled the presentation of its main statistical publications, to great effect.
“World Development Indicators”, a compendium of developing countries' economies, has been radically redesigned. It is now accompanied by a CD-ROM which contains the 500 time-series indicators and 200 tables available in the book, as well as information from many other World Bank publications.
By the standards of most CD-ROMs, this is not a fancy product. Video is kept to a minimum; an irritatingly kitschy introduction by the World Bank's president, James Wolfensohn, explains how the CD-ROM format allows the Bank to be available 24 hours a day. (The Bank has sensibly forgone other gimmicks in order to produce a CD-ROM that can be used on the old-model computers that so many still rely on in developing countries.)
The data are clearly presented and accessible. It is easy to create any combination of charts, maps or tables from the huge statistical database. But glitches remain: the CD-ROM cannot identify a user's typed requests if they differ at all from those that have been pre-specified—you cannot, for instance, ask for the “total population” of a country, but must specify “population, total”. Nor is it made easy to compare series of statistics between country groupings. These are teething problems: the World Bank has made a fine contribution to improving the quality of statistics available on developing countries. Scholars, investors and policy-makers will all benefit.