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The growing complexity of many real world problems is one of the biggest challenges of our time. The area of international finance is one prominent example where decision making is often fraud to mistakes, and tasks such as forecasting, trading and hedging exchange rates seem to be too difficult to expect correct or at least adequate decisions. From the high complexity of the foreign exchange market and related decision problems, the author derives the necessity to use tools from Machine Learning and Artificial Intelligence, e.g. Support Vector Machines, and to combine such methods with sophisticated financial modelling techniques. The suitability of this combination of ideas is demonstrated by an empirical study and by simulation.

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In his new book, "Vienna and Chicago, Friends or Foes?" economist and author Mark Skousen debates the Austrian and Chicago schools of free-market economics, two schools in constant, heated disagreement in their theories of money, business cycle, government policy, and methodology. ... Read more

Customer Reviews (13)

Lots of History of Economic Thought, Presented Nicely
Almost every Ph.D. program in Economics around the world teaches Neoclassical Economics as the correct way to model economic activity.While writing my Ph.D. dissertation in Mathematics at Harvard, I became a anti-Vietnam war/pro-civil rights activist, which led me to embrace Marxism (I didn't know what Marxism was, but I knew the people I hated hated it, so I figured it must be good), and thus to transfer to the Ph.D. in Economics at Harvard, because I was told that "economics determines everything." Naturally, I hated everything about neoclassical economics, and wrote an anti-neoclassical dissertation, which I dedicated to Karl Marx (communist) and Talcott Parsons (sociologist).

Well, that was a long time ago, and in the interim I have come to appreciate neoclassical economics and defend its being taught as the central paradigm in graduate economics programs. Of course, using neoclassical economics to understand the world is fraught with difficulty, because the theory is like a chain saw without a chain guard---if you don't know where to hold it and where to point it, it will carve you up into little pieces. Thus, I spend most of my time critiquing neoclassical economics and proposing additions and emendations that make the theory more useful and insightful.

Lately, I have been very dissatisfied with the main currents in the political economy of social policy. I read the liberal journals, such as Dissent and The American Prospect, but found I could not stomach their platitudes. I read Commentary and the Cato Institute publications, but their knee-jerk love affair with free markets and their lack of concern for the poor and the environment exasperated me. So, I thought I would go back to the classics, rereading Milton Friedman and the other Chicago school policy types, Hayek and the Austrians, and their popularizers. This was very fruitful. Milton Friedman was a deeply insightful genius and in a different way, so was Friedrich Hayek. But their policy positions I found not just incorrect but wildly bizarre and completely out of touch with reality. There are no equally deep popularizers on the liberal side (Galbraith was a great essayist, but had no analytical core, some modern liberal economists like Paul Krugman do brilliant professional work, but their policy positions are puerile). Amartya Sen is a great economist/policy-maker, but his work centers on third-world development. So, before I get to an assessment of Skousen's analysis of the two rival schools of laissez-faire economics, the Chicago school and the Austrian school, let me say what I think the orthodox neoclassical position is---a position that I in fact think is just about completely correct.

The central model of neoclassical theory is the Walrasian general equilibrium model, which portrays consumers/workers/owners earning returns on the labor and capital they supply to firms, which turn labor, capital, and resources into consumer and capital goods. Kenneth Arrow, Gerard Debreu, Frank Hahn, and others showed in the 1950's and early 1960's that when certain provisionally plausible assumptions hold, there always exists a set of prices such that all markets clear, and at such an "equilibrium" the allocation of goods is Pareto-optimal; i.e., you can't rearrange things to make anyone better off without making someone else worse off. This is Adam Smith's famous "Invisible Hand."

It became immediately obvious that several of the assumptions mentioned above sometimes fail. For instance, an industry can produce not only a good x that it sells on the market for price p, but may also produce pollution y, which it "gives away for free" to the community. To restore efficiency, the government must step in and force the industry to pay for its effluents, so that the marginal cost of polluting equals the price the industry must pay. These are called "externalities." Second, there are industries where the efficient scale of production is so large that market competition is precluded (e.g., nuclear energy), or where it is impossible to exclude people from use of the good (e.g., clean air, national defense, epidemic control). These are called "public goods." Third, consumers may have incomplete information as to the quality of goods, so thinks like the Food and Drug Administration are needed to ensure adequate product quality. These are called asymmetric information problems. Fourth, there may be certain things that we, as a moral society, do not wish to permit to be traded on markets. These so-called "merit goods" include body parts, prescription and recreational drugs, votes, and sexual services. Finally, it may be prohibitively costly to enforce certain contracts (e.g., labor and capital) through courts of law, so game theoretic issues involving endogenous enforcement and mutual trust and reciprocity must be added to the general equilibrium system. This is called the problem of "costly enforcement."

This model, with these emendations, I maintain is correct, and if we understand the emendations, we can handle the chain saw that is neoclassical economics without getting hurt. This position was clearly expressed in the dominant public economics text of the post-World-War II period, Richard Musgrave's Public Finance in Theory and Practice (1958). Musgrave was my teacher, and he convinced me that state intervention is appropriate wherever there are "market failures," such as those described above, that prevented the Walrasian general equilibrium system from producing social efficiency.

Now, when I was learning all of this theory from Richard Musgrave, my objections were very simple: why would you believe that the state would actually do these things? Why should the state act in the public interest? I remember once, as a young instructor at Harvard, attending a lecture by the great Keynesian James Tobin, delivered to an audience of thirty or so economics faculty and graduate students. Tobin was telling us that countercyclical fiscal policy could easily hand the current economic downturn. I raised my hand and asked a question. "I understand that the government can do this," I stated, "by why do you think it will do this?" Well, I could have defecated on the buffet table and drawn fewer horrified looks (from both Tobin and the Senior Professors) than I did by asking this simple question. At that time, neoclassical economics simply assumed a Beneficent State. Being a good Marxist, I believed that the state was controlled by the Capitalist Class, who used business cycles to discipline labor and make sure wages did not spiral out of control.

It was not too long after, however, that a group of economists inspired by the Chicago and Austrian Schools mounted a successful attack on the neoclassical model of economic policy, showing that there are forms of "state failure" that are just as pervasive and pernicious as "market failure," because the incentives supplied by market competition were completely missing from the government sector---politicians could make promises to get elected, but there was no way to turn those promises into contractual commitments. James Buchanan and Gordon Tullock's brilliant The Calculus of Consent (1962) was one of the first, and one of the most powerful critiques of this type.

As a result, by 1980 or so, most economists were learning in graduate school that there are important market failures, but because of state failures, in many cases the "cure" of government intervention is as likely to exacerbate as to ameliorate the problem. A proper analysis, therefore, must take into consideration the decision-making structure of the government, and a proposed intervention should prove its incentive compatibility on the governmental level as well as the market level.

The question that I ask, having read Skousen's interesting book, is whether there is anything to be learned from the Austrian and Chicago school economists--- principles that are not represented in the neoclassical public economics model as I have described it above. First, as far as I can see, every deviation from the standard public economics account by the Austrian school is just wrong. Most important, the Austrians hold that economic theory is derived from rational thought and empirical findings are not relevant to the truth value of their assertions. This is just plain wrong. Principles that the Austrians say flow from reason in fact flow from their peculiar, cultish, prejudice.

Second, the Austrians place no value on democracy, recognizing that voters can make choices that undermine their notion of "reason," and therefore a liberal republic should not permit popular sovereignty to override the sanctity of private property and the principles of the minimal state. I recall vividly Hayek (who was a great economist but a poor policy analyst) commenting on the Pinochet overthrow of democratic government in Chile (Pinochet brought a gang of Chicago economists into town to implement the principles of laissez-faire markets, torturing and murdering thousands who had different ideas) commenting that he would prefer a [laissez-faire style] liberal dictatorship to an illiberal democracy.

I am not suggesting that the Austrians are uninteresting; far from it. I love to read their work, and I find their views, bizarre and outlandish they seem to my ear, to be as mind-stimulating as a good fantasy novel, or an ethnographic account of the hunter-gatherer inhabitants of some tropical island. However, in no way are they scientists that deserve to be taken seriously. Of course, when there are Marxists all over the place trying to nationalize everything in sight, the Austrian philosophy might have some popular value as a counterweight. By the way, my reading of Americans who call themselves Austrians is that they are fooling themselves---they are really standard neoclassical public sector economists that have personal values favoring the entrepreneurial spirit.

The Chicago school of public policy inspired by Milton Friedman and George Stigler does not make any of the mistakes of the Austrians. A careful reading of Friedman's most impressive general work, Capitalism and Freedom, shows clearly that Friedman is a thoroughly committed democrat, and he opposes state intervention in regulating markets only on the grounds that the expected state failures will be greater than the market failures they are supposed to solve.

However, I come away of my recent rendezvous with the Austrians and the Chicago school with two bottom-line conclusions. First, these thinkers are often brilliant economists with excellent technical ideas, although these ideas do not imply the policy recommendations they favor. Second, their policy recommendations flow from normative principles that they have the right to hold, but they do not have the right to pass off as "scientific." For instance, their objections to the welfare state are purely ethical, and I find repugnant. Similarly, their objection to anti-trust regulation and the institution of fiat money (not backed by gold) seems to me to lack a scientific basis. I think if we stick to the standard neoclassical model of market-state interaction, and we add the analysis of state failure developed by Buchanan, Tullock, and others, we have the correct system to work with.

Insightful comparison...some flawed conclusions
Overall, I really liked this book.The opportunity to gain insight into the differences and similarities between the two big free-market schools of economic thought from one of the premier insiders in the freedom movement makes the read definitely worthwhile.I disagreed with some of his conclusions.In fact, I thought the cases he built in some of the chapters actually should have led to the opposite conclusion, but it is, after all, an opinion piece and not an objective study.As an Austrian, it is difficult to hear that being right is not always as important as fitting in...but that seems to be the case.I would recommend this book as a good primer for those who have not pinned down their philosophical loyalty.

A fascinating topic, well told
A very good book. The history and the theories of the Austrian School and the Chicagoan School written in a very plain and understandable way.
Economics made easy and enjoyable. Many thanks to Mark Skousen for making the dismal science a lively and fascinating subject.

Austrian vs. Chicago School: Who You Got!?
In this book Mark Skousen compares and contrasts the ideas of the two most prominent schools of free market economics. That is, the Austrian School (Carl Menger, Eugene Bohm-Bawerk, Ludwig Von Mises, Friederich Hayek, etc.) and the Chicago School (Milton Friedman, George Stigler, etc.) This book is an invaluable resource to any fan of free market economics who seeks a more in depth understanding of the intellectual history behind this subject.

Mark Skousen, a prolific, pro-free-market economist and writer, is a highly qualified individual to take up this important task. He has authored over 20 books on this subject, has studied free market economics in depth and has had extensive contact with both Milton Friedman and Friedrich Hayek.

From reading this book, you will not only get a nice overview of the history of free market economics including brief discussion of the important roles of precursors such as Adam Smith and Jean-Baptiste Say but you will also understand the finer points of both the Austrian view and the Chicago view. In particular, you will obtain a thorough understanding of the issues on which both schools passionately disagree, including their contrasting views on monetary policy, the cause and effect of business cycles and most importantly, what each school views as the proper methodology for obtaining economic truths.

The only shortcoming of this book that I noticed is very minor but will be of importance to a few readers. For an individual as well versed in free market thought as Mark Skousen, he often displays a clumsy understanding of the philosophy of Ayn Rand. For example, in this book, Skousen parenthetically comments how Ayn Rand would describe Immanuel Kant's concept of reason as "objective" reason. However, those who have studied the ideas of Ayn Rand knows that she has vociferously rejected the analytic-synthetic dichotomy of Immanuel Kant, which amounts to saying that reason is utterly useless in discovering truths in what Kant calls the noumenal world (that is, an unknowable world that exists independent of our consciousness). However, this should not detract from this fantastic book he has written.

I recommend this to anyone with a strong interest in laissez-faire economics and who wants to understand the finer but important contrasts between the ideas of the Austrian School and the Chicago School. If you are interested in the history of economic thought, I also recommend Mark Skousen's "The Big Three in Economics".

A Useful Comparison
The Austrian and the Chicago schools of economic thought have both made important contributions to our understanding of economics. Dr Skousen has, in an understandable and entertaining manner, presented these contributions to the general reading public.

I thought Dr Skousen was very game in suggesting that the Mises Institute had a siege mentality when it came to the defense of the Austrian school. I would also suggest that their partisan position is actually hindering further research and developments based upon the Austrian paradigm.When you regard your leader or school as been the final repository of truth and wisdom, where can you go from there? This may be one reason why most Austrian economists find it so hard to get good positions in top universities. They are regarded by their peers as being closed minded!

I also thought this book so good I gave it away to one of my graduate students who was leaning towards the church of Keynes. This book helped save him!

A great buy and a great read! ... Read more

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Agent-based Computational Economics (ACE) is a new discipline of economics, largely grounded on concepts like evolution, auto-organisation and emergence: it intensively uses computer simulations as well as artificial intelligence, mostly based on multi-agents systems. The purpose of this book is to give an up-to date view of the scientific production in the fields of Agent-based Computational Economics (mainly in Market Finance and Game Theory). Based on communications given at AE'2005 (Lille, USTL, France), this book offers a wide panorama of recent advances in ACE (both theoretical and methodological) that will interest academics as well as practitioners.

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This book analyzes the important contributions of Rosa Luxemburg to economic theory as well as devoting some space to her background as a left social-democratic politician and her personality.

The book's main focus of attention is the theory of capitalist development and the theory of the crash, but its connection with the theory of value, the theory of the monetary circuit, the theory of distribution and the theory of international finance are also explored.

The contributors to the volume come from different theoretical perspectives, both from within and outside the Marxian tradition - Post-Keynesians, Kaleckians and Circuitists are all included.

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Innovation in banking should be directed at improving the infrastructure that fosters efficient financial services and international trade. In this work, innovation theory is used to show how modern payment systems have transformed the technology of banking and facilitated changes in the strategy and structure of financial services organisations. Design, implementation and dissemination of payment systems are described and the analysis of their costs and benefits is combined with case studies of banks undergoing change. By studying firm capabilities, competencies, and resources, the approach is extended to services in general and linked to the ability of firms to compete and promote national economies. Payment systems vary and advanced and developing economies face obstacles in their legal and technical infrastructure, and maturity of banks. By adopting an international perspective, the book offers a unique comparative analysis that shows what kind of investments are likely to be effective.

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What is the World Trade Organization? Has it become a type of a "constitution"? Will it curb international trade discrimination and open up markets for developing countries, or will it prevent States from choosing the economic systems they want? This book untangles debates about constitutionalization and argues that the WTO is not, and should not, be described as a constitution by the standards of any conventional definition, or by the lights of any constitution to which we ought to aspire.Under current models, a constitutionalized WTO may curtail the ability of states to decide matters of national economic interest. The risk is an emphasis upon economic goals and free trade theory over other social values. Instead, Cass argues that what is needed, is a constitutionalized WTO which considers the economic development needs of States.Trading democracy, and not trading constitutionalization, is the biggest challenge facing the WTO. ... Read more

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In this study, Robert H. Nelson explores the genesis, the prophets, the prophesies, and the tenets of what he sees as a religion of economics that has come into full blossom in latter-day America. Nelson does not see "theology" as a bad word, and his examination of the theology underlying Samuelsonian and Chicagoan economics is not a put-down. It is a way of seeing the rhetoric of fundamental belief - what has been called "vision". ... Read more

Customer Reviews (7)

Forget that old time religion
The title is not so provocative today.You only have to turn on your TV setanytime of the day and there are programs galore on covering the markets and investing.Clearly, economics and the scientific disciplines have filled in the void left by religion, at least in the western democracies.Let's hope we don't turn the economic model into a god that time immemorial has already shown is not worthy of human adoration. This isn't to say we shouldn't pay attention to economics, for clearly and righlty, it has an important place in our lives.

First Rate--With Some Reservations
This is an excellent book by a professional economist who makes the case that modern neo-classical economics is highly ideological or religious in content as opposed to being composed of truly scientific endeavors.He views modern economics as being a form of religious artistry (with lovely mathematical expressionism) as opposed to being a truly scientific endeavor in a Newtonian sense.He quotes one wag, approvingly, that modern neo-classical economics suffers from "physics envy."

It would seem that Professor Nelson stretches the meaning of "religious" to cover the underlying values of modern day economic thought and social theory.While I agree, that very, very much of our modern day value system is derived from the Western Christian tradition that provided much of the historical moral and ethical foundations of this country, I would be hesitant to extend the "religious" term quite as liberally as Mr. Nelson.My personal preference would be to focus on the ideological foundations of modern Neo-Classical economics as opposed to its claimed "scientific values" foundation.I know that ideology and religion areoften closely related, however, I am reluctant to admit that Neo-Classical, Keynesian, Institutional, even Marxian economics can be adequately defined in religious terms.All of them employ religious elements.However, the derivatively religious values are brought in thru the backdoor--not glaringly thru the front entryway.Catholic, Calvinist, Pentacostal, etc., etc. economic ideas are not the primary focus of these religions--God is....

I would rather have a debate and discussion centered around the nature of the differing values underlying the different schools of economic thought than about why Calvinist economic ideas should trump Catholic ideas.That's an argument that I would personally prefer to avoid.I definitely do not want to be ruled by any official Christian sectarian economic school of thought.I am a firm believer of the Enlightenment values upon which our wonderful democratic institutions are based.I know, as the author points out clearly, that many of those values were translated from Christian values and put in a more secular form (backdoor religion, once more).However, I do believe that sticking to such secular forms in terms of economic schools of thought provides a more hopeful venue for decent political and civil debate and disagreement concerning economic ideas.The one thing for certain is that no one is going to agree upon what is properly "God's Will" in terms of His (or Her) desire for our economic destiny.

Mr. Nelson finishes his book with a very approving endorsement of Frank Knight as being the most significant 20th century economist.I plan to read more of Knight to see if I am so impressed.The author also concludes that perhaps libertarianism and environmentalism will be the triumphant "religions" (or my preference, "ideologies") of the future.Personally, I find the vast majority of climate scientists much more convincing than the opinions coming from the "Rush Limbaugh Insitutute of Science."Science may be imperfect.It may stumble and fall.It may advance in fits and starts, but it is the most powerful instrumentality the human race possesses.We should not abandon the real thing--we should only abandon pseudo-scientific pretensions masquerading as science.Environmental science, while imperfect and stumbling at times, is real science.It is something we must pay extremely close attention to if we are to have a future.Our future economic activity and development must be bounded by resource depletion limitations, pollution limits, and ecological concerns.

By contrast, libertarianism seems to be a combination of interesting and novel ideas--and a lot of crank theory.The idea that the individual is the only legitimate concern of economics.The family, community, society, nation, and the world mean nothing.It's all about "ME", "THE SELF MADE MAN!!!"It seems so childishly narcissistic....We are all selfish creatures, conservatives are right on that.We are also creatures capable of great love and sacrifice.Perhaps the mothers of libertarians should have abandoned their squalling, wet, smelly brats at the nearest city dump out of self interest.Clearly, the little brats had to cramp the mothers' individual styles.Of course they didn't, almost all mothers are strongly maternal and love their children and would never do such a barbarous thing.Also, I wonder how many people, with no idea for any future reward or payback, helped your typical libertarian child growing up.We are basically social creatures.Yes, we are also selfish, but we are also gregarious and cooperative.We would never have survived as a species without our very strong group social skills.

Lastly, I would take issue with the author's negative assessment of the 60's and 70's.I don't regard the Civil Rights Movement, the Vietnam Anti-War Movement, the Feminist Movement, the beginning of the Gay Movement, the Environmental Movement, etc. as being bad moments in history.Far from it.I suspect that the author in his heart of hearts doesn't either.The Sexual Revolution in America actually started in the 20's--not the 60's as commonly believed.The drug use--leaving out recreational pot--of the era was truly lamentable.There is no denying there were excesses during that period and that was one of them.However, questioning institutional idiocy should not be viewed as a negative.There are many times when standing up and being counted is highly laudable when the powers that be are grossly in the wrong.However, it is to be agreed that you don't want to throw out the precious democratic institutions with the polluted political bathwater.

A very good book.A very worthwhile read that should reveal to you different ways of thinking about economics as well as the underlying religious and ideological values of formal economic systems.

Interesting overall but major errors occur whenever Adam Smith is discussed
This book is certainly worth buying .It is well written.It is probably true that,to some extent,Samuelson saw Keynesian ecomomics as a religious type gospel of reform.Undoubtedly,the Chicago school's libertarian atheism (of Milton Friedman and others)can be regarded as a type of religion.It is certainly true that Adam Smith's work has been so badly misinterpreted by practically all economists,including Nelson,that one could be convinced that Smith's Invisible Hand is based on some type of mysterious ,near religious belief.Nothing could be further from the truth.


Nelson totally misstates Adam Smith's position again and again and again throughout this book.There is not a single page in this book that, even remotely,provides the reader with a firm foundation about what Smith's system of classical liberty reallyentailed.Nelson's assessments of Smith's system are about as accurate as the entirely false claim that John Maynard Keynes was an advocate of deficit finance(Keynes was a stauch opponent of deficit finance throughout his life.It is simply false to state that Keynes favored deficit finannce).Nelson claims the following:" As Adam Smith now interpreted the natural laws of economics,governments that sought to interfere with the individual pursuit of self interest in the market were acting contrary to the devine plan.The results were only likely to cause wide social disruption and distress-just as would any government action that in the physical order might be foolishly taken in attempted defiance of the law of gravity".(Nelson,p.287 :see also,for example,pp.44,84,89,191,etc.).Nelson,Samuelson, Friedman,and the rest of the economics profession have it all wrong andupside down.Smith certainly recognized that the Invisible Hand process of the division of labor and labor specializationcreated great wealth and economic growth.However,he also clearly recognized that it simultaneously generated massive undepletable ,detrimental externalities impacting the entire work force that only government actions could reduce,mitigate,or minimize.This is all clearly stated on pp.734-741 of the Modern Library (Cannan)edition of the Wealth of Nations.Nelson's book is intellectually unsatisfactory in its present state.The Invisible Hand has absolutely nothing to do with God,Divine Providence,or religion at all.It is a purely human economic-social process that leads to positive changes over time in a society because both the individual and society(all other individuals) benefit from the additional expertise and training as new specializations are created over time . Unfortunately,this process also has a dark side that Smith recognizes can only be effectively dealt with by government action.Period.Nelson needs to read what Smith actually said and initiate substantial CHANGES IN HIS NEXT EDITION.

A Midwestern Progressive's view from Japan
This is a brilliant intellectual history of late 20th century American economics which puts it in both American and European historic context.It is both erudite and immensely practical in helping one to see the limitations in recommendations of economists more clearly.
As a former international banker (and a mathematician by training) who has lived both in Europe and the Far East, the practical limits and occasional parochialism of American mainstream economics have long been clear, but except for George Stiglitz' "Globalization and Its Discontents", I can't think of any book that does a better job of explaining just what is wrong and why.Read them together and be prepared to think hard about the difference beween what we really "know" about (international) economic behavior and what we merely believe.

Economics as religion
This is a remarkable book...erudite, opinionated, original, and addressing a crucially important subject matter.Prof. Nelson covers a wide swath of recent economic thinking (that survey alone makes the book worthwhile), and contends that while economics wears the cloak of authority of science, it can more accurately be viewed as a secular religion.I had read one of his 1980s articles, and picked up the book on that basis - and became thoroughly engaged.If one measures success in terms of underlined sections, exclamation points and scribbled notes in the margins, then this one more than passes.I'm not an economist (or a theologian), but nonetheless found this to be a tremendously interesting read.I wanted more, and hope that his next book follows up on his closing point, about the cutting edge role of libertarians and environmentalists. ... Read more

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In a globalized economy logistics has become a crucial area for the success of companies. The performance of each company depends on the performance of its suppliers and of its business partners. The customers of each company are spread on a large geographical space. For this reason distribution logistics is the most important and complex part of logistics. An efficient and effective management of distribution logistics is a key issue for the success of a company. There are many different problems to deal with, from facility location to transportation, to inventory management, and, most important, to the integration and optimization of the entire logistics network. Quantitative methods provide relevant tools to support decisions, from strategic to operational, in distribution logistics.

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This is a history of economic thought from Adam Smith to John Maynard Keynes--but it is a history with a difference. Firstly, it is history of economic theory, not of economic doctrines. Secondly, it includes detailed Reader's Guides to nine of the major texts of economics in the effort to encourage students to become acquainted at first hand with the writings of all the great economists. This fifth edition adds new Reader's Guides to Walras' Elements of Pure Economics and Keynes' General Theory of Employment, Interest and Money as well as major additions to the chapters on marginal productivity theory, general equilibrium theory and welfare economics. ... Read more

Customer Reviews (5)

Good synopsis but poor analysis
I have always felt uneasy with this book since I was an under graduated student, 30 years ago. This is undoubtedly a quiet useful book for anyone who needs a bird's-eye view of the classics in economics. If you don't have time to read Smith's Wealth of Nations or Marshall's Principles, here you have the book you need. However, it is not here that you can look for a good analysis of the meaning and implications of the main schools of economic thought, as well as the relevance of the work of its most distinguished authors and their social and intellectual environment. That is reason why I always preferred Schumpeter's History of Economic Analysis. Today, that I am lecturing this course my dissatisfaction has increased, among other reasons because you have more and better textbooks, such as Lionel Robbins' History of Economic Thought, Mark Skoussen's Making of Modern Economics, or JürgNiehams'History of Economic Theory, which I really enjoyed reading because they try to make a portrayal of the intellectual and human stature of the most important economists of all times and their background.

Good synopsis but poor analysis
I have always felt uneasy with this book since I was an under graduated student, 30 years ago. This is undoubtedly a quiet useful book for anyone who needs a bird's-eye view of the classics in economics. If you don't have time to read Smith's Wealth of Nations or Marshall's Principles, here you have the book you need. However, it is not here that you can look for a good analysis of the meaning and implications of the main schools of economic thought, as well as the relevance of the work of its most distinguished authors and their social and intellectual environment. That is reason why I always preferred Schumpeter's History of Economic Analysis. Today, that I am lecturing this course my dissatisfaction has increased, among other reasons because you have more and better textbooks, such as Lionel Robbins' History of Economic Thought, Mark Skoussen's Making of Modern Economics, or JürgNiehams'History of Economic Theory, which I really enjoyed reading because they try to make a portrayal of the intellectual and human stature of the most important economists of all times and their background.

good for econ dudes
as an econ major i found this book highly informative and interesting. however, if you are not mathematically inclined you might find some of the models and graphs difficult to follow, especially the ones involving differential equations.
but if you are an econ dude, this book is great. lots of insight about how commonly used theories and models came about. well written for the most part, but somewhat wordy at times.

Too much lopsided for my taste.
The problem with this book is that it offers an astoundingbibliography, being therefore a mandatory list to further readings, but unfortunately it is entirely teleological, as it considers neoclessic economics of the most conservative kind to represent the acme of all economic thinking.

Still the best of its type
The standard text for anyone who wishes to analyse economic theory. Blaug takes the approach that an economic theory can be criticised on two levels.It may have a mismatch with the environment and or it may be internallyflawed as a theory. By concentrating on theory Blaug helps the readeracquire their own critical faculties for assessing economic theorieswithout getting bogged down on endless details associated with, "butthings were different then," or with defendants of marxist economictheory, "but things would be different." ... Read more

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Generalized method of moments (GMM) estimation of nonlinear systems has two important advantages over conventional maximum likelihood (ML) estimation: GMM estimation usually requires less restrictive distributional assumptions and remains computationally attractive when ML estimation becomes burdensome or even impossible. This book presents an in-depth treatment of the conditional moment approach to GMM estimation of models frequently encountered in applied microeconometrics. It covers both large sample and small sample properties of conditional moment estimators and provides an application to empirical industrial organization. With its comprehensive and up-to-date coverage of the subject which includes topics like bootstrapping and empirical likelihood techniques, the book addresses scientists, graduate students and professionals in applied econometrics. ... Read more

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Ongoing global changes bring fundamentally new scientific problems requiring
new concepts and tools. A key issue concerns a vast variety of practically
irreducible uncertainties, which challenge our traditional models and require
new concepts and analytical tools. The uncertainty critically dominates, e.g.,
the climate change debates. In short, the dilemma is concerned with enormous
costs vs. massive uncertainties of potential extreme impacts.
Traditional scientific approaches usually rely on real observations and
experiments. Yet no sufficient observations exist for new problems, and "pure"
experiments and learning by doing may be very expensive, dangerous, or
simply impossible. In addition, available historical observations are contaminated
by actions, policies. The complexity of new problems does not allow to achieve
enough certainty by increasing the resolution of models or by bringing in more links.
Hence, new tools for modeling and management of uncertainty are needed, as given
in this book which was prepared for an interdisciplinary audience, and addresses open
problems, limitations of known approaches, novel methods and techniques, or lessons
from the applications of various approaches. Thus, the book contributes to a better
understanding between practitioners dealing with the management of uncertainty, and
scientists working on either corresponding modeling approaches that can be applied for
improving understanding or management of uncertainty.

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Unemployment in Open Economies studies how domestic labour markets are influenced by a changing international environment. It combines the recently developed search and matching models with standard models of international trade. By this method, the reader gains new insights in the ongoing debate on how globalisation can affect unemployment.
The author develops a collection of models showing that globalisation can be one reason for long-known and well-documented phenomenons on the labour market. She puts emphasis on country differences by studying the role of individual risk behavior and the wage setting on the unemployment level. ... Read more

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After a decade of sub-par performance, the Japanese economy remains in the doldrums. Now, after a decade of extraordinarily strong performance, the United States economy is slowing. The ability of the world's two largest economies to reestablish strong growth is of critical importance to themselves and to the world as a whole. Trade frictions between the United States and Japan have remained muted in recent years but the deteriorating economic situation in the United States will lead to renewed attention to trade issues. Japan will feature prominently.

The bilateral trade agenda is increasingly moving beyond the traditional border impediment issues toward the more politically sensitive issues of internal regulation and deregulation. In the past, security concerns have mitigated trade tensions but the end of the Cold War has undercut a primary justification for the United States-Japan security alliance, in turn requiring a rebalancing of economic, diplomatic, and security priorities.

This volume analyzes the United States and Japanese economies; their trade and financial relationships; and their roles in the provision of international public goods such as development assistance, environmental protection, and international security. It argues that the United States ought to deemphasize its Japan-specific policies and its traditional focus on trade, and instead address its Japan-related concerns primarily through multilateral mechanisms with a focus on monetary and macroeconomic issues. The authors also recommend ways that the United States and Japan can cooperate to strengthen the global system in several areas of common interest. ... Read more

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Discover cutting-edge developments in electric power systems

Stemming from cutting-edge research and education activities in the field of electric power systems, this book brings together the knowledge of a panel of experts in economics, the social sciences, and electric power systems. In ten concise and comprehensible chapters, the book provides unprecedented coverage of the operation, control, planning, and design of electric power systems. It also discusses:

• A framework for interdisciplinary research and education

• Modeling electricity markets

• Alternative economic criteria and proactive planning for transmission investment in deregulated power systems

• Payment cost minimization with demand bids and partial capacity cost compensations for day-ahead electricity auctions

• Dynamic oligopolistic competition in an electric power network and impacts of infrastructure disruptions

• Reliability in monopolies and duopolies

• Building an efficient, reliable, and sustainable power system

• Risk-based power system planning integrating social and economic direct and indirect costs

• Models for transmission expansion planning based on reconfiguration capacitor switching

• Next-generation optimization for electric power systems

Most chapters end with a bibliography, closing remarks, conclusions, or future work. Economic Market Design and Planning for Electric Power Systems is an indispensable reference for policy-makers, executives and engineers of electric utilities, university faculty members, and graduate students and researchers in control theory, electric power systems, economics, and the social sciences. ... Read more

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Supply relations are often governed by so-called relational contracts. These are informal agreements sustained by the value of future cooperation. Although relational contracts persist in practice, research on these types of contract is only emerging in Operations and Supply Chain Management. This book studies a two-firm supply chain, where repeated transactions via well-established supply contracts and continued quality-improvement efforts are governed by a relational contract. We are able to characterize an optimal relational contract, i.e., to develop policies for supplier and buyer that structure investments in quality and flexibility in a way that no other self-enforcing contract generates higher expected joint surplus. A second goal is to compare the performance of different returns mechanisms in the context of relational contracting (quantity flexibility and buy-back contracts). Industry studies motivate the presented model.

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As we enter the year 2007, where are we in relationship to Gods prophetic time clock, socially, politically, economically, and militarily. In his book the Babylonian Economic System, Ralph Tankersley will take you through 4000 years of recorded history, from a Historical and Biblical perspective. There you will discover the origins of the American economy, and how this economy has operated down through history in nation after nation, kingdom after kingdom, empire after empire.In the world today, many believe and teach, that America is not recorded in scripture. Nothing could be further from the truth! In the Babylonian Economic System, Ralph Tankersley will walk you through the scriptures, show you where our economy is recorded in scripture, how and when these scriptures where fulfilled in the life of our nation.Therefore, if you are a Bible Believing Christian, interested in the fulfillment of prophecy, please read the Babylonian Economic System. This is the only economic system that has survived down through the centuries, from the dawn of time to the present time. This book change your life, not only from an economic perspective, but also from a spiritual perspective. ... Read more

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This book is concerned with the analysis, optimization and controllability of time-discrete dynamical systems and games under the aspect of stability, controllability and (for games) cooperative and non-cooperative treatment. The investigation of stability is based on Lyapunov's method which is generalized to non-autonomous systems. Optimization and controllability of dynamical systems is treated, among others, with the aid of mapping theorems such as implicit function theorem and inverse mapping theorem. Dynamical games are treated as cooperative and non-cooperative games and are used in order to deal with the problem of carbon dioxide reduction under economic aspects. The theoretical results are demonstrated by various applications. ... Read more

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Efficient movement of freight within the United States and across its borders is a critical enabler of future U.S. economic growth. The authors provide an overview of the freight-transportation system and the problems it faces, concluding with a discussion of key system-modernization issues, including increasing capacity, making the system less vulnerable to disruption, addressing environmental concerns, and building support for funding. ... Read more

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This monograph presents a general equilibrium methodology for microeconomic policy analysis intended to serve as an alternative to the now classical, axiomatic general equilibrium theory as exposited in Debreu`s Theory of Value(1959) or Arrow and Hahn`s General Competitive Analysis(1971).The methodology proposed in this monograph does not presume the existence of market equilibrium,accepts the inherent indeterminancy of nonparametric general equlibrium models,and offers effective algorithms for computing counterfactual equilibria in these models.It consists of several essays written over the last decade,some with colleagues or former graduate students,and an appendix by Charles Steinhorn on the elements of O-minimal structures,the mathematical framework for our analysis.

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Financial systems are crucial to the allocation of resources in a modern economy. They channel household savings to the corporate sector and allocate investment funds among firms; they allow intertemporal smoothing of consumption by households and expenditures by firms; and they enable households and firms to share risks. These functions are common to the financial systems of most developed economies. Yet the form of these financial systems varies widely. Why do different countries have such different financial systems? Is one system better than all the others? Do different systems merely represent alternative ways of satisfying similar needs? Is the current trend toward market-based systems desirable?Franklin Allen and Douglas Gale argue that the view that market-based systems are best is simplistic. A more nuanced approach is necessary. Financial institutions are not simply veils, disguising the allocation mechanism without affecting it, but are crucial to overcoming market imperfections. An optimal financial system relies on both financial markets and financial intermediaries. ... Read more

Customer Reviews (1)

Slipping the surface of substance
I suspect any researchers working on a project with such catchy words as "comparing" or "comparative" do theory for theory's sake: they slobber over theory without seriously looking at real issues in the real world.This book, by two scholars from the ivory tower, is clearly an example of this empty endeavor.It is just a collection of incoherent graffiti.I am not claiming that their arguments are illogical.Rather, I am just saying I don't understand for what and for whom these two puerile gangs are doing this sort of research.

In a nutshell, any serious intellectuals (I don't care about pedants like the authors) should skip a frivolous book like this.Do not be deceived by praises from their playmates. ... Read more