Explorations In Pragmatic Economics

Description:
For twenty years since the publication of his seminal paper 'The Market for 'Lemons'', George A. Akerlof's work has changed the way we see economics, and the economics of information in particular. In abandoning the perfect-competition benchmarks of classical economics, the pragmatic modern economics championed by Akerlof has provided deep insights into markets, identity, discrimination, motivation, and work, and into behavioural economics in general. This collection of Akerlof's most important papers provide both an introduction to Akerlof's work and a grounding in modern economics. Divided into two broad areas, micro- and macroeconomics, they cover the economics of information; the theory of unemployment; macroeconomic equilibria; the demand for money; psychology and economics; and the nature of discrimination and other social issues. The collection closes with Akerlof's 2001 Nobel Lecture, in which he argues that it is imperative that macroeconomics be considered inherently behavioural. Akerlof's substantial introduction to this volume tells the story of these papers, connecting them and showing how his later work has built upon his early contributions, in many cases improving their arguments, their subtlety, and their usefulness today.

Review:
Explorations in Pragmatic Economics provides that long awaited compilation of favorite hits by Akerlof and his coauthors. ...the book compiles some of the most innovative articles written in the past few decades. It is a must read...for any economist, be it a micro, macro, behavioral, or misbehavioral one. Leeat Yariv, Journal of Economic Literature, Vol. XLV

Table of Contents:
Introduction; PART 1: MICROECONOMICS; 1. The Market for 'Lemons': Quality Uncertainty and the Market Mechanism; 2. The Economics of Caste and of the Rate Race and Other Woeful Tales; 3. Discriminatory, Status-based Wages among Tradition-oriented, Stochastically Trading Coconut Producers; 4. Economics and Identity; 5. The Economics of 'Tagging' as Applied to the Optimal Income Tax, Welfare Programs, and Manpower Planning; 6. An Analysis of Out-of-Wedlock Childbearing in the United States; 7. Men Without Children; 8. The Economic Consequences of Cognitive Dissonance; 9. The Economics of Illusion; 10. Procrastination and Obedience; 11. Looting: The Economic Underworld of Bankruptcy for Profit; PART 2: MACROECONOMICS; 12. Relative Wages and the Rate of Inflation; 13. The Microeconomic Foundations of a Flow of Funds Theory of the Demand for Money; 14. Irving Fisher on his Head: The Consequences of Constant Threshhold-Target Monitoring of Money Holdings; 15. Jobs as Dam Sites; 16. Labor Contracts as Partial Gift Exchange; 17. The Fair Wage-Effort Hypothesis anmd Unemployment; 18. A Near-Rational Model of the Business Cycle, with Wage and Price Inertia; 19. The Macroeconomics of Low Inflation; 20. Behavioral Macroeconomics and Macroeconomic Behavior