American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Regular Article Capital Account Liberalization: Theory, Evidence, and Speculation Peter BlairHenry 887 935 Research on the macroeconomic impact of capital account liberalization finds few, if any, robust effects of liberalization on real variables. In contrast to the prevailing wisdom, I argue that the textbook theory of liberalization holds up quite well to a critical reading of this literature. Most papers that find no effect of liberalization on real variables tell us nothing about the empirical validity of the theory because they do not really test it. This paper explains why it is that most studies do not really address the theory they set out to test. It also discusses what is necessary to test the theory and examines papers that have done so. Studies that actually test the theory show that liberalization has significant effects on the cost of capital, investment, and economic growth. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=1&issue_date=December 2007 10.1257/jel.45.4.887 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Regular Article The Obstinate Passion of Foreign Exchange Professionals: Technical Analysis LukasMenkhoff Mark P.Taylor 936 972 Technical analysis involves the prediction of asset price movements from inductive analysis of past movements. We establish a number of stylized facts, including that technical analysis is widespread in the foreign exchange market and that it may be profitable. We then analyze four arguments that have been put forward to explain this: that the market may not be fully rational; that technical analysis may exploit the influence of official interventions; that it may be an efficient form of information processing; and that it may inform on nonfundamental influences. While each may have some validity, the latter is the most plausible. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=2&issue_date=December 2007 10.1257/jel.45.4.936 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Regular Article Interesting Questions in Freakonomics JohnDiNardo 973 1000 Freakonomics is more about "entertainment" than it is a serious attempt at popularization. Consequently, rather than conduct a comprehensive fact check, I use the book as a springboard for a broader inquiry into social science research and take issue with the book's surprising premise that "Economics is a science with excellent tools for gaining answers but a serious shortage of interesting questions." Using examples from Freakonomics, I argue that some of the questions the book addresses are "uninteresting" because it is impossible to even imagine what a good answer would look like. I conclude with some thoughts about the role of economic theory in generating interesting questions and/or answers. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=3&issue_date=December 2007 10.1257/jel.45.4.973 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Regular Article A True Development Round? A Review of Joseph E. Stiglitz and Andrew Charlton's Fair Trade for All: How Trade Can Promote Development Robert Z.Lawrence 1001 1010 In Fair Trade for All: How Trade Can Promote Development, Stiglitz and Charlton prescribe what a multilateral trade agreement--that promotes development and is fair for all--would include. This review appraises their prescriptions and offers some alternatives. Many of their ideas about what developed countries should do (opening markets, especially of labor intensive goods and services and cutting farm subsidies) are quite familiar and sensible. More controversially, however, they propose that all WTO members (both developed and developing) completely open their markets to all developing countries poorer and smaller than themselves. They also stress the importance of preserving domestic policy space, dropping intellectual property rules from the WTO and keeping restrictive rules off the agenda. Among its criticisms of the book, the review points out that the liberalization proposal contradicts their own arguments favoring individually tailored policies in developing countries and is likely to maximize trade diversion. In addition, their prescriptions for more policy space neglects the more desirable possibility of a WTO in which members accept differentiated commitments. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=4&issue_date=December 2007 10.1257/jel.45.4.1001 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Regular Article Children in the Vanguard of the U.S. Welfare State: A Review of Janet Currie's The Invisible Safety Net and Jane Waldfogel's What Children Need EugeneSmolensky 1011 1023 Policy driven social science research intended to influence the future of the U.S. welfare state has, during the past decade, emphasized improving the life-chances of children, particularly children disadvantaged at birth by the socioeconomic status of their parents. This essay samples that literature, discussing in detail the contents and implications of two recent largely synthetic volumes from this genre. http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=5&issue_date=December 2007 10.1257/jel.45.4.1011 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Book Review Book Reviews 1024 1093 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=6&issue_date=December 2007 10.1257/jel.45.4.1024 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Journal Article Annotated Listing of New Books 1094 1183 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=7&issue_date=December 2007 10.1257/jel.45.4.1094 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Journal Article JEL Classification System for Books 1184 1196 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=8&issue_date=December 2007 10.1257/jel.45.4.1184 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Journal Article Doctoral Dissertations in Economics 1197 1223 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=9&issue_date=December 2007 10.1257/jel.45.4.1197 American Economic Association Nashville, TN 0022-8282 Journal of Economic Literature http://www.aeaweb.org/journal.html 45 4 December 2007 http://www.aeaweb.org/articles/issue_detail.php?journal=JEL&volume=45&issue=4&issue_date=December 2007 Journal Article General Index for Volume XLV 1224 1230 http://www.aeaweb.org/articles/article_detail.php?journal=JEL&volume=45&issue=4&article=10&issue_date=December 2007 10.1257/jel.45.4.1224