American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 38 2 June 2000 287331 Preferential Trade Liberalization: The Traditional Theory and New Developments ArvindPanagariya This paper begins by systematically developing the "static" theory of preferential trade areas (PTAs) and showing that neither a large volume of initial intra-union trade nor geographical proximity can serve as a guide to welfare enhancing PTAs. The paper then discusses the modern literature addressing welfare effects of simultaneous division of the world into many PTAs, the impact of the decision to form a PTA on external tariffs and the "dynamic" time-path question of whether PTAs are building blocks or stumbling blocks towards multilateral freeing of trade. A final section discusses key theoretical considerations in the empirical evaluation of PTAs. http://www.aeaweb.org/journal/contents/June2000.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 38 2 June 2000 332382 Developments in Non-expected Utility Theory: The Hunt for a Descriptive Theory of Choice under Risk ChrisStarmer This article reviews recent developments in the economic theory of individual decision making under risk. Since the 1950s it has been known that individual choices violate the standard model of expected utility in predictable ways. Considerable research effort has now been devoted to the project of developing a superior descriptive model. Following an overview of non-expected utility theories which distinguishes between "conventional" and "non-conventional" approaches, the paper seeks to assess these alternative models in terms of empirical success (using laboratory and field data) and theoretical usefulness. The closing sections reflect on some new directions emerging in this literature. http://www.aeaweb.org/journal/contents/June2000.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 38 2 June 2000 383404 What Do We Say about Ourselves and What Does It Mean? Yet Another Look at Economics Department Research Jerry G.Thursby Statistical and programming techniques are used to examine economics department quality rankings and how resources and research output are related. Four questions are asked using the National Research Council's 1993 survey. Are there significant differences in department quality scores? How are quality scores related to publications, citations and numbers of Ph.D.s produced? What is the relation between research output and department resources? How well do departments generate research in comparison with other departments with similar levels of resources? What I find is that resources determine outputs, outputs determine opinions (which are generally diffuse) and most departments efficiently use their resources. http://www.aeaweb.org/journal/contents/June2000.html American Economic Association Nashville, Tennessee 0022-0515 Journal of Economic Literature 38 2 June 2000 405411 Review of Sargent's The Conquest of American Inflation RamonMarimon Sargent's book provides a reinterpretation of the US inflation record over the last half-century, reflecting on how macroeconomic theory has evolved since the beginnings of the rational expectations revolution. It is a basic reference on dynamic macroeconomic theory. http://www.aeaweb.org/journal/contents/June2000.html