American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Journal Article Front Matter 285 286 http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.1 10.1257/jel.49.2.1 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Articles Illiquidity and All Its Friends JeanTiroleToulouse School of Economics 287 325 The recent crisis was characterized by massive illiquidity. This paper reviews what we know and don't know about illiquidity and all its friends: market freezes, fire sales, contagion, and ultimately insolvencies and bailouts. It first explains why liquidity cannot easily be apprehended through a single statistic, and asks whether liquidity should be regulated given that a capital adequacy requirement is already in place. The paper then analyzes market breakdowns due to either adverse selection or shortages of financial muscle, and explains why such breakdowns are endogenous to balance sheet choices and to information acquisition. It then looks at what economics can contribute to the debate on systemic risk and its containment. Finally, the paper takes a macroeconomic perspective, discusses shortages of aggregate liquidity, and analyzes how market value accounting and capital adequacy should react to asset prices. It concludes with a topical form of liquidity provision, monetary bailouts and recapitalizations, and analyzes optimal combinations thereof; it stresses the need for macro-prudential policies. ( JEL E44, G01, G21, G28, G32, L51) http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.287 10.1257/jel.49.2.287 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Articles What Determines Productivity? ChadSyversonU Chicago 326 65 Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, labor, and trade. This paper surveys and evaluates recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes are manifold, and differ depending on the particular setting. They include elements sourced in production practices -- and therefore over which producers have some direct control, at least in theory -- as well as from producers' external operating environments. After evaluating the current state of knowledge, I lay out what I see are the major questions that research in the area should address going forward. (JEL D24, G31, L11, M10, O30, O47) http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.326 10.1257/jel.49.2.326 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Articles Natural Resources: Curse or Blessing? Frederickvan der PloegU Oxford and Free U Amsterdam 366 420 Are natural resources a "curse" or a "blessing"? The empirical evidence suggests that either outcome is possible. This paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization, and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems. Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in nondemocratic countries, and keeps in place bad policies. Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets. The survey also offers some welfare-based fiscal rules for harnessing resource windfalls in developed and developing economies. (JEL O47, Q32, Q33) http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.366 10.1257/jel.49.2.366 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Articles A World without Intellectual Property? A Review of Michele Boldrin and David Levine's Against Intellectual Monopoly RichardGilbertU CA, Berkeley 421 32 In their recent book, Against Intellectual Monopoly, Michele Boldrin and David Levine conclude that patents and copyrights are not necessary to provide protection for either innovation or creative expression and should be eliminated. The authors note the many flaws of the U.S. system of intellectual property protection and argue that other means are available to appropriate the benefits of invention and creative expression. While the authors overlook important functions of intellectual property, they provide support for further reforms of intellectual property law. (JEL K11, O31, O34) http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.421 10.1257/jel.49.2.421 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Journal Article Book Reviews 433 66 Links to individual book reviews now available online. http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.433 10.1257/jel.49.2.433 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Journal Article Annotated Listing of New Books 467 568 http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.467 10.1257/jel.49.2.467 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 49 2 June 2011 http://www.aeaweb.org/issue.php?journal=JEL&volume=49&issue=2 Journal Article JEL Classification System 569 583 http://www.aeaweb.org/articles.php?doi=10.1257/jel.49.2.569 10.1257/jel.49.2.569