American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Journal Article Front Matter i iv http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.i 10.1257/jel.48.3.i American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Articles The Macroeconomic Costs and Benefits of the EMU and Other Monetary Unions: An Overview of Recent Research RoelBeetsmaU Amsterdam and CESifo, Munich MassimoGiuliodoriU Amsterdam 603 41 This article provides an overview of recent research into the macroeconomic costs and benefits of monetary unification. We are primarily interested in Europe's monetary union. Given that unification entails the loss of a policy instrument, its potential benefits have to be found elsewhere. Unification may serve as a vehicle for beneficial institutional changes. In particular, it may be a route toward an independent monetary policy, which alleviates the scope for political pressure to relax monetary policy. Unification also eliminates harmful monetary policy spillovers and competitive devaluations. We explore how disagreement between the monetary and fiscal authorities about their policy objectives can lead to extreme macroeconomic outcomes. Further, we pay considerable attention to the desirability (or not) of fiscal constraints and fiscal coordination in a monetary union. Monetary commitment and fiscal free riding play a key role in this regard. Similar free-riding issues also feature prominently in the analysis of how unification influences structural reforms. We end with a brief discussion of monetary unification outside Europe. The cost-benefit trade-off of unification may differ substantially between industrialized and less-developed countries, where differences in fiscal needs and, hence, the reliance on seigniorage revenues may dominate the scope for unification. http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.603 10.1257/jel.48.3.603 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Articles Services Trade and Policy JosephFrancoisJohannes Kepler U Linz BernardHoekmanWorld Bank 642 92 A substantial body of research has taken shape on trade in services since the mid-1980s. Much of this is inspired by the WTO and regional trade agreements. However, an increasing number of papers focus on the impacts of unilateral services sector liberalization. The literature touches on important linkages between trade and FDI in services and the general pattern of productivity growth and economic development. This paper surveys the literature on services trade, focusing on contributions that investigate the determinants of international trade and investment in services, the potential gains from greater trade, and efforts to cooperate to achieve such liberalization through trade agreements. There is increasing evidence that services liberalization is a major potential source of gains in economic performance, including productivity in manufacturing and the coordination of activities both between and within firms. The performance of service sectors, and thus services policies, may also be an important determinant of trade volumes, the distributional effects of trade, and overall patterns of economic growth and development. At the same time, services trade is also a source of increasing political unease about the impacts of globalization on labor markets, linked to worries about offshoring and the potential pressure this places on wages in high income countries. http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.642 10.1257/jel.48.3.642 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Articles Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy Orazio P.AttanasioU College London and IFS, London GuglielmoWeberU Padova and IFS, London 693 751 This paper provides a critical survey of the large literature on the life cycle model of consumption, both from an empirical and a theoretical point of view. It discusses several approaches that have been taken in the literature to bring the model to the data, their empirical successes, and their failures. Finally, the paper reviews a number of changes to the standard life cycle model that could help solve the remaining empirical puzzles. http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.693 10.1257/jel.48.3.693 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Articles A Review of Douglass C. North, John Joseph Wallis, and Barry R. Weingast's Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History RobertBatesHarvard U 752 56 In Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History, Douglass C. North, John Joseph Wallis, and Barry R. Weingast probe the organizational foundations of development. Outlining the properties of the "natural" and "open entry" societies, they highlight as well the conditions under which societies can move from one to the other, thereby achieving political order and economic prosperity. http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.752 10.1257/jel.48.3.752 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Book Reviews Book Reviews 757 788 http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.757 10.1257/jel.48.3.757 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Journal Article Annotated Listing of New Books 789 882 http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.789 10.1257/jel.48.3.789 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 48 3 September 2010 http://www.aeaweb.org/issue.php?journal=JEL&volume=48&issue=3 Journal Article JEL Classification System 883 896 http://www.aeaweb.org/articles.php?doi=10.1257/jel.48.3.883 10.1257/jel.48.3.883