American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Journal Article Front Matter i iv http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.i 10.1257/jel.50.1.i American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles The Elasticity of Taxable Income with Respect to Marginal Tax Rates: A Critical Review EmmanuelSaezU CA, Berkeley JoelSlemrodU MI Seth H.GiertzU NE 3 50 This paper critically surveys the large and growing literature estimating the elasticity of taxable income with respect to marginal tax rates using tax return data. First, we provide a theoretical framework showing under what assumptions this elasticity can be used as a sufficient statistic for efficiency and optimal tax analysis. We discuss what other parameters should be estimated when the elasticity is not a sufficient statistic. Second, we discuss conceptually the key issues that arise in the empirical estimation of the elasticity of taxable income using the example of the 1993 top individual income tax rate increase in the United States to illustrate those issues. Third, we provide a critical discussion of selected empirical analyses of the elasticity of taxable income in light of the theoretical and empirical framework we laid out. Finally, we discuss avenues for future research. ( JEL H24, H31, J22) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.3 10.1257/jel.50.1.3 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles Economic Perspectives on Corporate Social Responsibility MarkusKitzmuellerWorld Bank Group JayShimshackTulane U 51 84 This paper synthesizes the expanding corporate social responsibility (CSR) literature. We define CSR from an economic perspective and develop a CSR taxonomy that connects disparate approaches to the subject. We explore whether CSR should exist and investigate conditions when CSR may produce higher welfare than other public good provision channels. We also explore why CSR does exist. Here, we integrate theoretical predictions with empirical findings from economic and noneconomic sources. We find limited systematic empirical evidence in favor of CSR mechanisms related to induced innovation, moral hazard, shareholder preferences, or labor markets. In contrast, we uncover consistent empirical evidence in favor of CSR mechanisms related to consumer markets, private politics, and public politics. (JEL D21, L21, M14) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.51 10.1257/jel.50.1.51 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles The Enlightened Economy: An Economic History of Britain 1700-1850: Review Essay GregoryClarkU CA, Davis 85 95 The British Industrial Revolution is the key break in world history. Yet the timing, location, and cause of this Revolution are unsolved puzzles. Joel Mokyr's book is one of a number of recent attempted solutions. He explains the Industrial Revolution through the arrival of a particular ideology in Britain, associated with the earlier European intellectual movement of the Enlightenment. This review considers how Mokyr's "idealist" approach fares as an account of the Industrial Revolution, compared to the spate of recent proposed "materialist" explanations. ( JEL N13, N63) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.85 10.1257/jel.50.1.85 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles Economic History or History of Economics? Grand Pursuit: The Story of Economic Genius: Review Essay OrleyAshenfelterPrinceton U 96 102 In this essay, I review Sylvia Nasar's long awaited new history of economics, Grand Pursuit: The Story of Economic Genius. I describe how the book is an economic history of the period 1850-1950, with distinguished economists' stories inserted in appropriate places. Nasar's goal is to show how economists work, but also to show that they are people too--with more than enough warts and foibles to show they are human! I contrast the general view of the role of economics in Grand Pursuit with Robert Heilbroner's remarkably different conception in The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers. I also discuss more generally the question of why economists might be interested in their history at all. (JEL B10, B20, B30, N00) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.96 10.1257/jel.50.1.96 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles Fighting Poverty One Experiment at a Time: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty: Review Essay MartinRavallionWorld Bank 103 14 Abhijit Banerjee and Esther Duflo offer a coherent vision for an economics of poverty and antipoverty policy. Their economics is grounded in an effort to understand the economic and psychological complexities in the lives of poor people, informed by social experiments and field observations. Their preferred policies entail small reforms at the margin, also informed by experiments--specifically randomized control trials. While the book provides some interesting insights, I question how far its approach will get us in fighting global poverty. (JEL I32, I38, O15, P36) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.103 10.1257/jel.50.1.103 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Articles Thinking Small: Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty: Review Essay Mark R.RosenzweigYale U 115 27 In Poor Economics, Abhijit Banerjee and Esther Duflo eschew grand theorizing about poverty reduction in favor of an approach in which intelligently designed and tested small interventions, based on a scientific understanding of the lives of the poor, marginally improve their welfare. In so doing, they describe the findings from the recent large literature describing the behavior and institutions of the poor and the consequences of policy and experimental interventions targeted to poverty populations. In this review, I assess whether "thinking small" with its associated policy regime of transfers, subsidies, and nudges, is both a practical and effective policy prescription for "fighting" poverty and whether the set of studies that have focused on populations that have not escaped poverty has improved our fundamental understanding of both the consequences and causes of poverty. (JEL I32, I38, O15) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.115 10.1257/jel.50.1.115 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Forum on What Economists Should Read about the Financial Crisis Getting Up to Speed on the Financial Crisis: A One-Weekend-Reader's Guide GaryGortonYale U AndrewMetrickYale U 128 50 All economists should be conversant with "what happened?" during the financial crisis of 2007-09. We select and summarize sixteen documents, including academic papers and reports from regulatory and international agencies. This reading list covers the key facts and mechanisms in the build-up of risk, the panics in short-term-debt markets, the policy reactions, and the real effects of the financial crisis. (JEL E32, E44, E52, G01, G21, G28) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.128 10.1257/jel.50.1.128 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Forum on What Economists Should Read about the Financial Crisis Reading about the Financial Crisis: A Twenty-One-Book Review Andrew W.LoMIT and AlphaSimplex Group LLC 151 78 The recent financial crisis has generated many distinct perspectives from various quarters. In this article, I review a diverse set of twenty-one books on the crisis, eleven written by academics, and ten written by journalists and one former Treasury Secretary. No single narrative emerges from this broad and often contradictory collection of interpretations, but the sheer variety of conclusions is informative, and underscores the desperate need for the economics profession to establish a single set of facts from which more accurate inferences and narratives can be constructed. (JEL E32, E44, E52, G01, G21, G28) http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.151 10.1257/jel.50.1.151 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Book Reviews Book Reviews 179 224 http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.179 10.1257/jel.50.1.179 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Journal Article Annotated Listing of New Books 225 312 http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.225 10.1257/jel.50.1.225 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 50 1 March 2012 http://www.aeaweb.org/issue.php?journal=JEL&volume=50&issue=1 Journal Article JEL Classification System 313 327 http://www.aeaweb.org/articles.php?doi=10.1257/jel.50.1.313 10.1257/jel.50.1.313