5 comments about The Theory of Incentives: The Principal-Agent Model.

1. This is a fabulous book, destined to become a classic reference summarizing some 30 years of research in a field that has now become mature and which has completely redefined and expanded the field of Modern Economics. Jean Jacques Laffont is a sure-bet future Nobel laureate for his contributions to the field (likely to be shared with that other Toulouse-based giant Jean Tirole). Martimort is a rising star in his own right.

   This volume, the first in what is described as a two-volume survey, should be on the bookshelf of any serious economist or any graduate student trying to work her way through a serious first or second year microeconomic theory. It could also be used effectively to teach a first-year graduate or an advanced undergraduate course on asymmetric information and contracts.

   What is so nice about the book pedagogically in my view is the way the authors have synthesized so many results by working with variants of simple models. It's the power of elegant simplicity. When looking at moral hazard for example, they start with the simplest two outcome, two action problem, with a risk-neutral principal and agent. Then they slowly and selectively complicate the same base model (e.g. adding a limited liability constraint, making the agent risk averse, allowing for more action levels and outcomes, adding more tasks, more agents, etc). Hence you get the essential insights without being overly burdened from the start with cumbersome notation. They have several nice graphical representations to accompany the very well written intuitive explanations. The end result is that you end up seeing with clarity how many results in the literature, that had previously seemed disparate, tie together very neatly and share a common mathematical structure.

   The authors state in the introduction (which is a brilliant historical survey of ideas and the development of the field) that they plan a second volume on multi-agent contracts and mechanism design. It should also be fabulous and will hopefully help to popularize and democratize an area of economics that is packed with essential insights for understanding political economy and the behavior of groups, hiearchies and organizations, yet has mostly been left to mathematical economists.

   There are other books out there like Macho-Stadler et al' "An Introduction to the Economics of Information: Incentives and Contracts" and Salanie's "The Economics of Contracts" which are targeted at a similar audience. These are quite good in their own right, but do not have the breadth and insight of this volume.




2. A very clear book on the topic of information theory; pretty much everything you need as a graduate student. Covers all topics in substantial detail but with models that capture only the effects that are relevant. A great buy.



3. The book provides a systhesis of contract theory at the phd level. It begins with basic idea of adverse selection and then its extension and followed by basic moral hazard model and its extension. The selected topics are presented here in a consistent fashion of the main ideas. Applications are well presented along the models.

   Nonverifiability, the mixed model of adverse selection and moral hazard and some dynamic aspects of the two are also incorporated in a great deal of details.

   This is the text on incentive theory, not just introduction. Its comprehensive insights are useful and time-saving for readers. You need not to read a bulk of papers, after reading the book, you just complement it with some core papers of the topics. (such as multidimensional screening, random participation)

   If there is some weakness, it would be that... the authors present some topics too short and some notation used are not well explained, particularly the extension of the core models and some selected topics.

   Anyways, i found it helpful and complete for studying incentive theory but it requires deep understanding of optimization theory and some experience of economic-theorethic arguments.

   This book is written by a major contributor of the field. It would be hard to write another book to compete with this one in the field. . .




4. I had a project work. I was struggling with a P/A model in other books' examples. But this book is a gem. I got what I wanted in less than two days. I am an average student and the various models and extensions are very helpful in understanding the material.
   
   I love the cover and the color combination also. I dont have it now. But will buy one. G-R-E-A-T Book.
   
   Give it a try.



5. This book is really good for people studying contract theory and with some knowledge of game theory. Slightly advanced, but really good.

5 comments about Recursive Macroeconomic Theory.

1. The first time i read the book, i'm sure this should not be the first text book for Dynamic Macroeconomics everyone should read. It's better to read somewhere else as an introduction to the idea of dynamic macroeconomics. Romer 'Advanced Macroeconomics' and Stokey, Lucas, Prescott 'Recursive Methods' are more appropriate to start. After gainning some similarity with Dynamic Methods, it would be much better to study models about macroeconomics presented in the book.

   This book is the presentations of various models using Dynamic / Recursive Macroeconomics. It makes them easier and time-saving to study many kinds of model in a semester. It's GOOD & HELPFUL IN THIS SENSE. However, it might not be a good book for study in depth. You are better to study from the original papers for the same topics.

   I think, this book is similar to Tirole 'Theory of Industrial Organization' in spirit, but different in content. They both show the simplified version of various models in the fields.

   If you think you like this style, you would like to have it. But if you don't, it might be better just to skim (from the library) and read the original papers.

   Hope this comment would be helpful for you to make a decision :)




2. When I recently left my job as cryer in a grim, north-eastern town, I was made the head of recursive macroeconomic theory at a major international bank. I could have done with a simpler introduction than this, to be honest, as my knowledge of RMT was limited. But now I hold my own in meetings simply by spouting a few long words from this book (mainly "macroeconomic" and "recursive" - theory doesn't seem to impress as much) and delegating to underlings.



3. This is a perfect book for three reasons; i) it is perfect for those who wish to learn modern macroeconomics. The book develops necessary knowledge and tools to be applied to dynamic economics, ii) Sargent is one of most prominent and leading macroeconomists of the world, and he should be Nobel prize winner in Economics, iii) the book is published by MIT.



4. This is a great book. But you can download the second addition free on Sargent's website, so I wouldn't recommend buying it.



5. The book is certainly written by distinguished people, but it seems to me that their focus in writting this book was more to exhibit mathematical methods to solve problems rather than discuss the problems themselves. Apparently the book is meant for training mathematical skills in dynamic programming, and prepare you for computer simulations of macroeconomic problems. But don't use it for understanding macroeconomics.
   
   In general, the authors get into mathematical discussions that divert attention from the problem itself, and at the same time they don't explain why they are doing all these. Reading the book needs a lot of background knowledge and self-intuition. Apart from that some chapters are educational and fit for class work.
   
   The first chapters cover mathematical basics about random process and Markov chains and estimation. They are the good chapters. The chapters on partial equilibrium, complete markets ad incomplete markets are also the ones that are noramlly used in class lectures. The book's coverage of consumption theory and economic growth is weak and insufficient. I would recommend Romer or Blanchard&Fisher book for that. The chapter on search and job matching is also simplistic and again not enough. In most of the chapters, technicality dominates concepts, so having a complementary textbook can be great help.
   
   For one thing, the book has a lot of misprints and mistakes too, which seem to be fixed in the newer edition.

1 comments about Capital and Language: From the New Economy to the War Economy (Semiotext(e) / Foreign Agents).

1. This book is fantastic. It's about time that the greater interest shown in workerist / autonomous Marxist thought and politics has translated into publishing some of Christian Marazzi's work in English. If Toni Negri's work provides one with a giant hammer for smashing through the mystifications of class reality, Marazzi conversely provides a set of finely sharpened blades and scalpels for the dissection of processes of class decomposition. Of particular interest and usefulness is his exploration of fiscal crisis of New York City during the 1970s, and how that proved to be a turning point is the disciplining of the working class as pension funds were invested into stock markets (thus workers came to have an interest in the workings of financial markets that were both benefitting and working against them). It is unfortunate this book was not published several years earlier, as the fact that Marazzi is analyzing an earlier financial crisis (namely the one relating to the new economy bubble) might suggest to one that this book is old hat (it is strange, for instance, to be reading commentaries and analysis involving a number of companies that only recently have ceased to exist), but this is not the case. The dynamics of financialization and class composition that Marazzi are all the more present, even if having changed exaggerated since he wrote this book, within the conjunction of factors leading to the current crisis. Definitely worth a read. Looking forward to more of his work being translated and published.

5 comments about The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits.

1. The author has noble intentions and some of the arguments are persuasive. But something does not quite add for me:
   
   Solve third world poverty by making everyone consumers? Buy more plastic goods?
   
   Some of the cases are good stories and I am not against the idea...but something is missing here. What about the mass environmental impact?
   What about eradicating poverty but increasing impoverishment? Make everyone a consumer, eradicate their customs and culture, Americanize every Third World country by turning its native peoples into consumers. Sounds like a profitable enterprise for the MNCs--but not sure how much "Fortune" will be redistributed to the native peoples. I doubt much.



2. This is a great book for anyone serious about expanding their business, or starting their own business. It gives a real look at the world's poor. Every stereotype is wrong.



3. I learned about CK Prahalad and the BOP about two years ago doing a school project. I'm a graphic designer, so my approach is far removed from the typical business person's. After this project, I used this book to guide my senior project (design equivalent of a thesis), in which I made up a company that served the BOP in Venezuela and created a brand and packaging system for it. As a non-business person, it was sometimes challenging to follow the book, but it was not overwhelming. I agree with other comments that say that it was a bit technical (especially with all the abbreviations), but it was still approachable.
   
   I'd recommend this not just for business people and entrepreneurs. Poverty is a world-wide issue and this book shows new and innovative ways of dealing with it. We can find uses for this theory in many different realms and disciplines and the theory forces us to think outside of the box. I was especially appreciative of the non-subsidies and the notion that poverty alleviation can come from sustainably profitable operations. I also like the idea of environmental sustainability as a must when dealing with the vast majority of the world as consumers.
   
   I would also recommend "Out of Poverty" by Paul Polack. I liked Prahalad's position better, as Polack falls short in addressing exclusively money as a poverty factor and disregards life quality as something we should address; something that Prahalad does address. But Polack addresses an even poorer segment of the world and we can learn from both theories.



4. Rather than teaching the poor how to fish you should provide them with the information they need to reach a life beyond fish and rice. That goal is nicely laid out by author C.K. Prahalad in his wonderful volume "The Fortune at the Bottom of the Pyramid."
   
   Prahalad correctly points out that it is the poor who stand most to profit from free, global markets. While that is true, the goal cannot be reached without a government being willing to assume a leadership role in making transactions easier for customers and accepting the responsibility of helping to create wealth rather than merely taxing wealth.
   
   Prahalad shares the belief of many that poverty and non-functional economies are not caused by Western dominance but by the inattention of the West. The author issues a call to change, insisting that business no longer can afford to neglect a market of 5 billion people who already are consumers and will help business generate even more profits once these 5 billion become more highly-informed consumers. It is information, not charity, that provides meaningful relief, stresses Prahalad, who calls upon business leaders to make meaningful and sustained improvements in the lives of billions of people.
   
   In case study after case study the author provides evidence for his premise that the win-win formula of innovation offers the dual function of helping the poorest of the poor while at the same time generating corporate profits.
   
   When you take a close look at India and its opportunities for successful business intervention, you see further evidence for Prahalad's assertion that the greatest potential for economic growth is in the billions of people living at the bottom of the economic pyramid.
   
   By Gunjan Bagla
   Author of Doing Business in 21st Century India



5. I thoroughly enjoyed this book and found the information eye-opening. I was thrilled to read about so many creative and resourceful people (actual case studies) who are truly commited to serving those who live on $1-$2 a day around the world. Their needs are real and the heros are those creative individuals who are 'pushing the envelop' in serving them while still making an honest profit. The case studies are also available either via a CD in the back of the book or via the website in the paperback edition. This is an EXCELLENT read.

5 comments about Recursive Methods in Economic Dynamics.

1. Essential for understanding modern macroeconomic theory, for better or worse. Chapter 4 on Dynamic Programming under certainty and bounded returns is beautiful. I recommend using this book in conjunction with Sargent's RMT.



2. This book is a first great step into the theory and results that you need to really understand the technicalities behind current research on Dynamic General Equilibrium Macroeconomics.
   Further, it's an excellent complement of Sargent and Ljungqvist's Recursive Macroeconomic Theory.



3. I have never, e*v*e*r encountered a worse book in any field in my entire life. Ok, so chapter 4 and 9 are cute - but you know what, you really don't need to write a book to publish 30 pages of material that is actually worth reading.
   
   I had a clever teacher who once said: "If you want to pick mushrooms, go to the forest" - well, if you want to learn Math, take the bus and head to the math department. The presentation is completely unclear, there is no motivation and the math is treated in a ridiculusly simplified way.
   
   According to SLP, to prove a theorem, all you need to do is make assumptions - no need to motivate why you make them - that would be overkill, rather leave it to the reder to motivate (as an annoying exercise).
   
   I dream of the day a Mas-Collel of macro economics comes around and writes a comprehensive macro book. Until this day, I am left wiping my behind with chapter 1-3; 5-8; and 10-End. Oh well.



4. i refer this textbook to follow mathematical idea of macro dynamic programming. the excircises are helpful to deepen my understanding.



5. This is really a usful book for a graduate student who want to learn recursive methods in macro, especially in monetary theory.

5 comments about A First Course in Optimization Theory.

1. An excellent introduction at this level which is both lucid and rigorous with just enough examples to motivate applications while not leaving the reader swimming in redundancy. The previous review gives details, but I will add that the proofs are concise and clear. The only thing I would add to this book is more and harder problems, but that is easily remedied. If you want a theoretical introduction, buy this book right now -- its one of the best textbooks I have ever seen.



2. Excellent introduction to optimization techniques with a special emphasis to induce the student to an active and positive attitude towards the rigoruous demonstration of every proposition behind theorems and economic models.
   This is not a book for beginners, but an excellent one that helps to develop the abilities required to understand modern textbooks and papers on micro and macroeconomics.
   With an excellent presentation, and interesting end-of-chapter exercises, this book cannot be out of every economist's toolbox.



3. a good book with lots of preliminary math review, but exercises are not that well



4. This book is a great review prior to starting graduate study in economics. Its accessible even if you've never studied optimization before, and covers many of the main optimization concepts used in first semester graduate coursework.



5. This is an attractive, very well written, self contained book which takes you by the hand, explaining the basic notions of convergence, and then moving through a refresher course on multivariable calculus and such topics as Lagrange Multipliers, then the relation of optimization to convexity and quasi convexity and more advanced topics.
   Most of the examples come from economics, so this book could be ideal to bring an economics major up to level.
   However you should be aware that many books entitled optimization cover different material. For example a book on numerical optimization such as
   Numerical Optimization (Springer Series in Operations Research and Financial Engineering) have very different contents, so you need to be clear about what you want before you buy this book.
   I initially gave this book 1 star because I got a book with a few missing pages, which C.U.P graciously replaced for me, but now I would give it 4 stars, if only I could change the rating when editing my review!

5 comments about The Principles of Political Economy and Taxation (Dover Value Editions).

1. The publisher should be convinced that the automatic spell checker should not be so heavily relied upon. The cover art is an expression of how an armchair graphic artist can be innovative with Photoshop. If a book of such high esteem be put out for public enrichment its presentation should not be so insincere.



2. David Ricardo was never one to mince words.
   "The opinion entertained by the labouring class, that the employment of machinery in frequently detrimental to their interests, is not founded on prejudice and error, but is comfortable to the correct principles of political economy." Unlike today, the ruling class and their intellectuals of the 19th Century were not affraid to say what they were up to.



3. This work is a masterpiece of economic theory only second to
   the Wealth of Nations by Adam Smith. Ricardo states that value
   is a function of effort and not the price paid for labor. He
   reminded us that labor plus the tools to assist labor affected
   the creation of value. Therefore; increases in value were in
   direct proportion to increments in labor. Value was also a
   function of the time it took to bring the goods to market.
   Surprisingly, the cultivation of inferior land resulted in a

   higher exchangeable value of raw produce because more labor
   was required in its production. If we become more efficient in
   land cultivation, rents will go down because more can be
   cultivated with less land. In addition, the exchangeable value
   of commodities is undisturbed by natural or accidental causes.
   Laborers derive their greatest pleasure when the market price
   of labor exceeds the natural price. Therefore; wages will
   increase in response to increases in the demand for labor.
   Rises in rent are accompanied by increments in the share of
   produce because landlords want more rent when harvests are
   greater. Accordingly, the price of corn is a function of the labor to produce it. If wages go down, then prices must fall.
   As the price of labor goes down, profits increase but the
   price of the commodity may not go down. Taxes on profits
   tend to increase the price of a commodity . If money is not
   taxed, then all commodities will be subject to price increases.
   Ultimately, a tax on land begets a tax on produce. In addition,
   a tax on labor will raise its price. In addition, the price of
   provisions determine the price paid to the worker. If money
   decreases in value, all commodities will be subject to steep
   price increases. This was seen in modern times with the
   fluctuation of the Russian currency. Ultimately, bounty
   lowers the price to foreigners because the government subsidizes
   the bounty paid to the local merchants to stimulate trade.
   The theory of rent transfers value but does not create it.
   Ultimately, wages are determined by the price of food and
   cost of production.

   This theory of wages differs from Adam Smith who said that
   wages were a function of the ease or hardship to do work, the
   difficulty or expense of learning a trade, the constancy
   of employment, the trust reposed in the workmen, the probability
   of success or failure of the venture or the fear of misfortune.
   David Ricardo's work is an important milestone in the theory
   of economics and comparison to the work of Adam Smith.




4. I don't want to insult Ricardo. He was unequivocally brilliant. But this book was painful to read. Granted, I am not an economist, so maybe this just wasn't for me. I found it dry and devoid of all emotion. I understand that it is intended to educate and to promote an economic theory, not to entertain, but God man, show your readers some mercy! I am a firm believer that if a book is too boring to read, the author's message will never get out, regardless of its merits.



5. David Ricardo played a crucial role in developing Classical Economics. Ricardo was prompted to write on economics by reading The Wealth of Nations. As luck would have it, Ricardo knew James Mill (father of JS Mill) and was soon in contact with TR Malthus. The debates between Ricardo and Malthus produced a paradigm that lasted only a half a century. PPE+T is a central part of the Classical paradigm, it is Ricardo's definitive statement on economics.
   
   PPE+T is perhaps the most tightly reasoned book written by a Classical economists (JS Mill is a close rival here). This is not fun reading but it is important as a piece of history, and elements of Ricardo's analysis remain relevant today. Given Ricardo's razor sharp intellect, one must wonder why he did not develop modern value theory himself. The tight reasoning of this book is, ironically, the source of much criticism against it. Joseph Schumpeter (among others) has lamented `the Ricardian vice', by which Ricardo arrived at policy conclusions through flawless but restrictive logical reasoning. Ricardo is hard to argue against, given his assumptions, but what if we alter these assumptions?
   
   While Classical Economics is dead, some of its Ricardian elements live on. The Principles of Political Economy and Taxation remains relevant today largely because of Ricardo's concept of Comparative Advantage. Comparative Advantage is one of the most enduring ideas in economics. The development of the Comparative Advantage concept set Ricardo ahead of all but a few of his contemporaries. Economists still speak of Ricardian Equivalence and The Ricardo Effect. While some might object Ricardo's logical-deductive approach to political economy, few economists have stood the test of time so well. PPE+T is a timeless classic. This is not fun reading, but it is important none the less.

2 comments about Global History and Geography (Barron's Regents Exams and Answers Books).

1. This book really gave me good practice for the regents



2. There aren't too many books published to help specifically for the SAT II W. Hist. So before I took that exam I bought this book for some practice problems, and it did help. I scored a 710 although I it had been 2 years since I took W.Hist. If you also plan to buy the Barron's How to...World History, read the review section, which is pretty good, but don't let their exam questions tarnish your perceptions. The questions intensified popular misconceptions and what not. That's why you would want this book for practice questions. Ironic: same publishers, two different recommendations.

No comments about Monetary Policy, Inflation, and the Business Cycle: An Introduction to the New Keynesian Framework.

5 comments about Vienna and Chicago, Friends or Foes?: A Tale of Two Schools of Free Market Economics.

1. Those interested in economic history as well those who sympathize with the Chigaco or Austrian Schools will find this to be a great read. A great explanation of what free market economics means to two different schools.



2. This book is a lovely addition to the history of economic thought, and aptly describes the modern 'methodenstreit' between the Austrian and Chicagoan schools. Skousen fails only in one regard: his understanding of Misesian apriorism is horrific. Granted, Mises was not clear enough and reintroduced arcane terms into his exposition on method (i.e. rationalism vs empiricism; see on this the source 3, provided below) that have largely obfuscated his contributions, and indeed some of his writings were incorrect. However, even an undergraduate in Economics myself with a modest understanding of praxeology can see massive holes in the author's understanding. Austrians emphasize the value and necessity of theory in interpreting data which has no voice of its own. Contra Skousen, they do not disregard history or empirical evidence. That is nonsense, and his writings on Mises show an utter misunderstanding (he does not even sufficiently disentangle Mises from Ricardo and other classical economists.) It is praxeological theorems (e.g. law of demand) that are necessary to approach statistical data, and formulate complete economic theorems, and are themselves logical truths. It is a common misunderstanding that Austrians completely disregard empirical data, and I was hopeful that Skousen would not repeat it - yet he does, and more ineptly than usual even. Economists serious about understanding the Austrian School comprehend this. It was Mises' position that neither mathematics nor statistics can yield praxeological truths. This does not mean that math and statistics can't be useful in understanding particular historical episodes (in fact the author realizes this -as did Friedman,- when he makes reference of faulty studies going counter to economic wisdom, which were later corrected by theoretically informed economists.) Nor does it mean dogmatic adherence to "broken" theories, which lack explanatory power (which are a signal either of faulty deduction or induction.) Rather than relegating Mises -whose theorems largely stand correct- to the status of crank, Skousen could've put more effort into understanding Mises. He is right to laud Austrians for engaging in more empirical studies, wrong in his understanding of what the Austrian method is. Empirical studies, statistical methods and graphs are wonderful tools in relaying information and insuring that our theories possess explanatory power, all of which Austrians have put to use without compromising their stance on praxeological theorems. He also misrepresents Mises' position on free will, which at most is compatibilist (http://www.mises.org/books/ufofes/ch3~4.aspx)
   
   For more on the matter:
   [...]
   
   
   Other than this and some minor errors, the book is great. The author skilfully recounts the birth of both schools, and provides a balanced assessment of their respective strengths and weaknesses, where he is equipped to do so (he is best on the business.) For a brief history of free market economics (and economics more generally), this book is excellent; for a philosophical treatise on method in Economics, it ought to be avoided. Readers will appreciate the author's exposition of certain basic concepts of economics in his work.



3. 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!



4. 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".



5. 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.