American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 37 4 December 1999 15651565 Corrigenda: The Numerical Reliability of Econometric Software B. D.McCulloughH. D.Vinod http://www.aeaweb.org/journal/contents/December1999.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 37 4 December 1999 15691614 The Microfinance Promise JonathanMorduch In the past decade, microfinance programs have demonstrated that it is possible to lend to low-income households while maintaining high repayment rates--even without requiring collateral. The programs promise a revolution in approaches to alleviating poverty and spreading financial services, and millions of poor households are served globally. A growing body of economic theory demonstrates how new contractual forms offer a key to microfinance success--particularly the use of group-lending contracts with joint liability. For the most part, however, high repayment rates have not translated into profits, and studies of impacts on poverty yield a mixed picture. In describing emerging tensions, the paper highlights the diversity of innovative mechanisms beyond group-lending contracts, the measurement of financial sustainability, the estimation of economic and social impacts, the costs and benefits of subsidization, and the potential to reduce poverty through savings programs rather than just credit. The promise of microfinance has pushed far ahead of the evidence, and an agenda is put forward for addressing critical empirical gaps and sharpening the terms of policy discussion. http://www.aeaweb.org/journal/contents/December1999.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 37 4 December 1999 16151660 Inequality and Economic Growth: The Perspective of the New Growth Theories PhilippeAghionEveCaroliCeciliaGarcia-Penalosa We analyze the relationship between inequality and economic growth from two directions. The first part of the survey examines the effect of inequality on growth, showing that when capital markets are imperfect, there is not necessarily a trade-off between equity and efficiency. It therefore provides an explanation for two recent empirical findings, namely, the negative impact of inequality and the positive effect of redistribution upon growth. The second part analyzes several mechanisms whereby growth may increase wage inequality, both across and within education cohorts. Technical change, and in particular the implementation of "General Purpose Technologies," stands as a crucial factor in explaining the recent upsurge in wage inequality. http://www.aeaweb.org/journal/contents/December1999.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 37 4 December 1999 16611707 The Science of Monetary Policy: A New Keynesian Perspective RichardClaridaJordiGaliMarkGertler The paper reviews the recent literature on monetary policy rules. We exposit the monetary policy design problem within a simple baseline theoretical framework. We then consider the implications of adding various real world complications. Among other things, we show that the optimal policy implicitly incorporates inflation targeting. We also characterize the gains from making a credible commitment to fight inflation. In contrast to conventional wisdom, we show that gains from commitment may emerge even if the central bank is not trying to inadvisedly push output above its natural level. We also consider the implications of frictions such as imperfect information. http://www.aeaweb.org/journal/contents/December1999.html