Journal of Economic Literature

doi: 10.1257/jel.50.3.1pmid: N/A

Chandra, Amitabh; Skinner, Jonathan

doi: 10.1257/jel.50.3.645pmid: N/A

Abstract In the United States, health care technology has contributed to rising survival rates, yet health care spending relative to GDP has also grown more rapidly than in any other country. We develop a model of patient demand and supplier behavior to explain these parallel trends in technology growth and cost growth. We show that health care productivity depends on the heterogeneity of treatment effects across patients, the shape of the health production function, and the cost structure of procedures such as MRIs with high fixed costs and low marginal costs. The model implies a typology of medical technology productivity: (I) highly cost-effective “home run” innovations with little chance of overuse, such as anti-retroviral therapy for HIV, (II) treatments highly effective for some but not for all (e.g., stents), and (III) “gray area” treatments with uncertain clinical value such as ICU days among chronically ill patients. Not surprisingly, countries adopting Category I and effective Category II treatments gain the greatest health improvements, while countries adopting ineffective Category II and Category III treatments experience the most rapid cost growth. Ultimately, economic and political resistance in the United States to ever-rising tax rates will likely slow cost growth, with uncertain effects on technology growth. (JEL H51 , I11 , I18 , O31 )

Docquier, Frédéric; Rapoport, Hillel

doi: 10.1257/jel.50.3.681pmid: N/A

Abstract This paper reviews four decades of economics research on the brain drain, with a focus on recent contributions and on development issues. We first assess the magnitude, intensity, and determinants of the brain drain, showing that brain drain (or high-skill) migration is becoming a dominant pattern of international migration and a major aspect of globalization. We then use a stylized growth model to analyze the various channels through which a brain drain affects the sending countries and review the evidence on these channels. The recent empirical literature shows that high-skill emigration need not deplete a country's human capital stock and can generate positive network externalities. Three case studies are also considered: the African medical brain drain, the exodus of European scientists to the United States, and the role of the Indian diaspora in the development of India's information technology sector. We conclude with a discussion of the implications of the analysis for education, immigration, and international taxation policies in a global context. (JEL F02 , F22 , J24 , J61 , O15 )

Zitzewitz, Eric

doi: 10.1257/jel.50.3.731pmid: N/A

Abstract A new meta-field of “forensic economics” has begun to emerge, uncovering evidence of hidden behavior in a variety of domains. Examples include teachers cheating on exams, road builders skimping on materials, violations of U.N. sanctions, unnecessary heart surgeries, and racial biases in employment decisions, traffic stops, auto retailing, and even sports judging. In each case, part of the contribution of economic analysis is in uncovering evidence of wrongdoing. Although research questions differ, forensic economic work shares commonalities in approaches and limitations. This article seeks to draw out the common threads, with the hope of stimulating further research across fields. (JEL K13 )

Atkinson, Anthony B

doi: 10.1257/jel.50.3.770pmid: N/A

Abstract The Mirrlees Review of taxation in the United Kingdom is a landmark in the analysis of U.K. fiscal policy, and of wide interest to public finance economists around the world. This review concentrates on what we can learn from the Review about the current state of public economics and directions for future research. (JEL E62 , H20 , H50 )

Feldstein, Martin

doi: 10.1257/jel.50.3.781pmid: N/A

Abstract The Mirrlees Review is an ambitious and comprehensive analysis of the British tax system with detailed recommendations for reform. This review essay focuses on those issues that are also likely to be of interest to an American reader. The Review has the technical sophistication that readers would expect from a team of ten economists, chaired by James Mirrlees, the distinguished theorist who received the Nobel Prize for his contributions to the theory of optimal taxation. But it is written for a broader audience, explaining concepts like deadweight loss and the elasticity of tax revenue with respect to tax rates and doing so without any mathematics. (JEL D64 , E21 , E62 , H24 , H25 )

doi: 10.1257/jel.50.3.791.r1pmid: N/A

Abstract Edwin S. Mills of Kellogg School of Management, Northwestern University reviews “Lectures on Urban Economics” by Jan K. Brueckner. The EconLit abstract of the reviewed work begins: Presents a rigorous but nontechnical treatment of major topics in urban economics. Discusses why cities exist; analyzing urban spatial structure; modifications of the urban model; urban sprawl and land-use controls; freeway congestion; housing demand and tenure choice; housing policies; local public goods and services; pollution; crime; and urban quality-of-life measurement. Brueckner is Professor of Economics at the University of California, Irvine. Index.

doi: 10.1257/jel.50.3.791.r2pmid: N/A

Abstract Ted Bergstrom of University of California, Santa Barbara reviews “The Darwin Economy: Liberty, Competition, and the Common Good” by Robert H. Frank. The EconLit abstract of the reviewed work begins: Explores the importance of Charles Darwin's theories on the development of economics. Discusses paralysis; Darwin's wedge; no cash on the table; starving the beast -- but which one; putting the positional consumption beast on a diet; perpetrators and victims; efficiency rules; ownership of money; success and luck; the great trade-off; taxing harmful activities; and the libertarian's objections reconsidered. Frank is an economics professor with the Johnson Graduate School of Management at Cornell University. Index.

doi: 10.1257/jel.50.3.791.r3pmid: N/A

Abstract Janice Boucher Breuer of University of South Carolina reviews “The Moral Foundation of Economic Behavior” by David C. Rose. The EconLit abstract of the reviewed work begins: Explores the connection between morality and economic behavior through the medium of trust. Discusses opportunism; group size; moral values; harm-based moral restraint; the empathy problem; duty-based moral restraint; the moral foundation; trust; and culture. Rose is Professor of Economics at the University of Missouri, St. Louis. Index.

doi: 10.1257/jel.50.3.791.r4pmid: N/A

Abstract Matthijs van Veelen of University of Amsterdam reviews “A Cooperative Species: Human Reciprocity and Its Evolution” by Samuel Bowles and Herbert Gintis. The EconLit abstract of the reviewed work begins: Explores why humans cooperate in large numbers to advance projects for the common good and examines the cultural, biological, and other processes that explain how humans became exceptionally cooperative. Discusses the evolution of altruism in humans; social preferences; the sociobiology of human cooperation; cooperative Homo economicus ; ancestral human society; the coevolution of institutions and behaviors; parochialism, altruism, and war; the evolution of strong reciprocity; socialization; social emotions; and human cooperation and its evolution. Bowles is Head of the Behavioral Sciences Program at the Santa Fe Institute and teaches economics at the University of Siena. Gintis is at the Santa Fe Institute, the Central European University, and the University of Siena. Name and subject indexes.