American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article The Inheritance of Inequality SamuelBowles HerbertGintis 3 30 How level is the intergenerational playing field? What are the causal mechanisms that underlie the intergenerational transmission of economic status? Are these mechanisms amenable to public policies in a way that would make the attainment of economic success more fair? These are the questions we will try to answer. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=1&issue_date=Summer 2002 10.1257/089533002760278686 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Intergenerational Inequality: A Sociological Perspective RobertErikson John H.Goldthorpe 31 44 When economists are concerned with the inheritance of inequality, they typically focus on the intergenerational transmission of income or wealth. In contrast, sociologists are more likely to analyze intergenerational mobility between (and immobility in) different class positions. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=2&issue_date=Summer 2002 10.1257/089533002760278695 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Economic Interpretations of Intergenerational Correlations Nathan D.Grawe Casey B.Mulligan 45 58 Since accurate prediction ultimately determines the usefulness of theory, our paper gives the reader a taste of some predictions derived from economic theory and some empirical successes and failures. We provide only a taste, because there are a great many economic models relevant to intergenerational correlations — such as models of educational attainment, neighborhood effects in schooling, family formation and fertility choice, occupational choice and discrimination — and quite a variety of predictions that might be derived from these models. However, a simple model of investment and intergenerational decision making can be interpreted as a conceptual aggregation of many more detailed economic models. We present such a model and from it derive one class of predictions that has received substantial attention in the empirical literature — the role of endowments and credit markets in determining intergenerational correlations. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=3&issue_date=Summer 2002 10.1257/089533002760278703 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Cross-Country Differences in Intergenerational Earnings Mobility GarySolon 59 66 International studies of the extent to which economic status is passed from one generation to the next are important for at least two reasons. First, each study of a particular country characterizes an important feature of that country's income inequality. Second, comparisons of intergenerational mobility across countries may yield valuable clues about how income status is transmitted across generations and why the strength of that intergenerational transmission varies across countries. The first section of this paper explains a benchmark measure of intergenerational mobility commonly used in U.S. studies. The second section summarizes comparable empirical findings that have accumulated so far for countries other than the United States. The third section sketches a theoretical framework for interpreting cross-country differences in intergenerational mobility. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=4&issue_date=Summer 2002 10.1257/089533002760278712 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Economic Reforms in India Since 1991: Has Gradualism Worked? Montek S.Ahluwalia 67 88 Opinions on the causes of India's growth deceleration vary. World economic growth was slower in the second half of the 1990s, and that would have had some dampening effect, but India's dependence on the world economy is not large enough for this to account for the slowdown. Critics of liberalization have blamed the slowdown on the effect of trade policy reforms on domestic industry. However, the opposite view is that the slowdown is due not to the effects of reforms, but rather to the failure to implement the reforms effectively. This in turn is often attributed to India's gradualist approach to reform, which has meant a frustratingly slow pace of implementation. However, even a gradualist pace should be able to achieve significant policy changes over ten years. This paper examines India's experience with gradualist reforms from this perspective. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=5&issue_date=Summer 2002 10.1257/089533002760278721 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Is India's Economic Growth Leaving the Poor Behind? GauravDatt MartinRavallion 89 108 Has poverty continued to fall with growth in India in the 1990s, or has the nature of the growth process changed, such that the poor have been left behind? This paper tries to answer those questions. We do not attempt to assess the impact of India's macroeconomic reforms of the 1990s on poverty, since this would require identification of the counterfactual of what would have been experienced in the 1990s without the reforms. Rather, our aim is to describe what has happened to poverty in India in the 1990s. In the course of the discussion, we will learn about the proximate causes of changes in India's poverty rate. Moreover, although this discussion is India-specific, it illustrates themes that are often encountered in the analysis of poverty in low-income economies, including difficult issues of survey design and comparability and the proximate factors underlying the responsiveness of poverty to economic growth. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=6&issue_date=Summer 2002 10.1257/089533002760278730 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Economic History and Modern India: Redefining the Link TirthankarRoy 109 130 This paper argues that to restore the link between economic history and modern India, a different narrative of Indian economic history is needed. An exclusive focus on colonialism as the driver of India's economic history misses those continuities that arise from economic structure or local conditions. In fact, market-oriented British imperial policies did initiate a process of economic growth based on the production of goods intensive in labor and natural resources. However, productive capacity per worker was constrained by low rates of private and public investment in infrastructure, excessively low rates of schooling, social inequalities based on caste and gender and a delayed demographic transition to lower birthrates and the resultant heavy demographic burden placed on physical capital and natural resources. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=7&issue_date=Summer 2002 10.1257/089533002760278749 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Perspectives on the U.S. Current Account Deficit and Sustainability Catherine L.Mann 131 152 This essay considers the underpinnings of the large U.S. current account deficit. It then tackles the question of whether the U.S. current account deficit is sustainable. A current account deficit is "sustainable" at a point in time if neither it, nor the associated foreign capital inflows, nor the negative net international investment position are large enough to induce significant changes in economic variables, such as consumption or investment or interest rates or exchange rates. Even if the current account deficit is sustainable by this definition today, its trajectory could still be creating future risks for the U.S. and global economy. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=8&issue_date=Summer 2002 10.1257/089533002760278758 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article The Central Role of Entrepreneurs in Transition Economies JohnMcMillan ChristopherWoodruff 153 170 The authors summarize entrepreneurial patterns in the transition economies, particularly Russia, China, Poland and Vietnam. Markets developed spontaneously in every transition country, but they were built at varying speeds. Some governments impeded the entrepreneurs' self-help by creating conditions that made it hard for informal contracting to work; others created an environment that was conducive to self-help. The spontaneous emergence of markets, furthermore, has its limits. As firms' activities became more complex, they came to need formal institutions. Some governments fostered entrepreneurship by building market-supporting infrastructure; others did not. The authors argue that the success or failure of a transition economy can be traced in large part to the performance of its entrepreneurs. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=9&issue_date=Summer 2002 10.1257/089533002760278767 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article The Theory of the Firm as Governance Structure: From Choice to Contract Oliver E.Williamson 171 195 The propositions that organization matters and that it is susceptible to analysis were long greeted by skepticism by economists. One reason why this message took a long time to register is that it is much easier to say that organization matters than it is to show how and why. The prevalence of the science of choice approach to economics has also been an obstacle. As developed herein, the lessons of organization theory for economics are both different and more consequential when examined through the lens of contract. This paper examines economic organization from a science of contract perspective, with special emphasis on the theory of the firm. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=10&issue_date=Summer 2002 10.1257/089533002760278776 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Retrospectives: The Origins of Neoclassical Microeconomics Robert B.EkelundJr Robert F.Hébert 197 215 Until recently, the standard story line in history of thought textbooks was that a triumvirate of British and Continental writers established demarcation between classical economics and neoclassical economics in the early 1870s. The authors raise two objections to this potted history. The first is that the tools of neoclassical economics were invented earlier. Recent work has demonstrated that the tools of neoclassical analysis were widely available across Europe well before 1870. The notion that neoclassical economics experienced a tripartite immaculate conception around 1870 cannot stand. The second objection is that the method of neoclassical economics was invented later. As it stands, the legend undervalues the key contribution of Alfred Marshall, who put an indelible stamp on neoclassical economics by defining the appropriate method of economic inquiry. When we refer to neoclassical economics today, we usually mean the collection of tools of economic knowledge available to (and invented by) Marshall, channeled and directed into uses dictated by Marshall's view of economic science. Yet as we shall see, Marshall had an eminent predecessor in method as well, in the person of Jules Dupuit. http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=11&issue_date=Summer 2002 10.1257/089533002760278785 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Recommendations for Further Reading BernardSaffran 217 224 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=12&issue_date=Summer 2002 10.1257/089533002760278794 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Comments Robert S.Goldfarb H. O.Stekler DavidNeumark WilliamWascher T. D.Stanley 225 229 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=13&issue_date=Summer 2002 10.1257/089533002760278802 American Economic Association Nashville, TN 0895-3309 Journal of Economic Perspectives http://www.aeaweb.org/jep/ 16 3 Summer 2002 http://www.aeaweb.org/articles/issue_detail.php?journal=JEP&volume=16&issue=3&issue_date=Summer 2002 Journal Article Notes 231 235 http://www.aeaweb.org/articles/article_detail.php?journal=JEP&volume=16&issue=3&article=14&issue_date=Summer 2002 10.1257/089533002760278811