Macroeconomics

Although the title Macroeconomics in emerging markets seems rather straightforward at first sight, it makes one wonder whether the foundations of macroeconomics in emerging markets really differ from those in industrialised countries. Why a separate macroeconomics textbook for this category of countries? In this extremely lucidly written book, Peter Montiel easily convinces the reader that it is a useful complement to existing textbooks for at least two reasons. First, because the idiosyncrasies of many emerging economies - most notably their often weak financial and legal systems - may require a different macroeconomic management focus. While macroeconomic policies in industrialised countries often relate to business cycle developments, policy makers in emerging economies are compelled to spend much more time on irregular episodes of financial instability, which may require different types of action. Second, because some assumptions of standard theoretical models do not hold for most emerging economies. Market-determined floating exchange rates and a risk-free rate of return on short-term government debt do for instance not apply to many countries in the developing world.

The book is divided into four parts. The first one introduces a clear analytical model, to which later chapters refer when treating issues of macro-economic stabilisation. And although the author does not formally define the term "emerging market", the model developed in Chapters 2 and 3 shows that a typical emerging economy is characterised by real and financial openness (though with imperfect substitutability between domestic and foreign financial assets), an officially determined exchange rate regime, and a relatively strong reliance on monetary policies and stabilisation rather than fiscal policies (when compared to industrialised countries). Although the discussion of the model is clear, it would have benefited had the letters denoting the variables been more intuitively logical (e.g. why not use n to designate the nominal exchange rate rather than s?).

In the subsequent three parts the author gives an overview of specific areas of macroeconomic policy: fiscal management, management of the financial sector, and exchange-rate management. In general, the discussion of these themes is both comprehensive and profound. However, in my view the second part of the book, on financial sector policies, is somewhat unbalanced. The author discusses at length the literature on financial repression and financial liberalisation, but pays virtually no attention to the (more recent) so-termed legal view literature. The empirical results of this literature carry important implications for emerging economies, as they underline that the positive growth effect of financial system development mainly depends on the extent to which the financial system is rooted in an enforceable legal system. Only in Chapter 11 some oblique remarks are made with respect to the influence of the legal system on contract enforcement costs. Another omission is that, while dealing with the theoretical (dis)advantages of banks vs. financial markets, Chapter 11 does not discuss the empirical research into this matter, which basically shows that financial structure as such appears to be inconsequential for economic growth.

An important point in favour of the book is that, using the benchmark model from the first part, the author systematically shows that in emerging economies fiscal policy, financial sector issues, and exchange rate management are mutually interdependent. An interesting case in point is the very clear treatment of exchange rate management and currency crises in the last part of the book. Here, the differences between industrialised and emerging countries come clearly to the fore in a discussion of the ability of countries to perform moderate devaluations if a gap between the actual and equilibrium real exchange rate becomes apparent. While industrialised countries have been able to limit such devaluations, emerging economies have often experienced more extreme market reactions due to a lack of confidence. Paul Krugman already referred to this "double standard" of financial markets in The Return of Depression Economics (1999), but Peter Montiel elaborates on this theme, linking it to self-fulfilling liquidity crises and his discussion of financial sector fragility in earlier chapters.

All in all, this book provides for a readable and insightful analysis of macroeconomic management in emerging and transition economies, generally based on the state-of-the-art as regards theoretical and empirical research on this topic. Given the largely non-mathematical approach, the book may also serve well as an updated, more concise, and "light" version of Agénor and Montiel's second edition of Development Macroeconomics (1999). In doing so, this book also shows that clear and precise analytical writing on (macro)economics can be done without casting each and every argumentation into a mathematical mould.

This book contains both the theoretical models of currency substitution and key articles and contributions. It is comprehensive even if a little slack in its mathematical expositions. It is a great survey of the recent literature on the topic but could be more coherent.

Though the name is "self-fulfilling prophecies", but I regard it as a standard advanced textbook for macroeconomics.

It introduced the basic technique and standard approach in modern macroeconomics, including linear difference equations, intertemporal optimization, representative agents and OG models, competitive equilibrium and welfare theorem, standard models of money (CIA and money in utility function), etc. It is good to think macroeconomics as a branch of applied general equilibrium.

It also includes some frontiers of research like RBC and calibration, increasing returns, multi-sector models, etc.

As it's name suggests, it tells much on multiple equilibria and sunspots, it maybe an alternative approach to explain the real phenomena.

The most important, all these materials are introduced in a moderate level. The mathematics used is more acceptable to the first-year graduate students in economics compare to some other texts.

Since it emphasizes on fluctuations, it lacks of some important topics like unemployment, labor market, incomplete and imperfect market, fiscal policy, policy-making, and little on endogenous growth. But it is not so bad, this keeps the text short and more friendly. Not a book can include all the important topics in the subject. The basic has been told, and all the others could upon to others.

So it is suitable for first-year graduate students in economics and is better to be used together with Blanchard & Fisher's "Lectures on macroeconomcs".

This book, intermediate in level, is a great textbook for european students or students interested in European economics. It's nice to read a european oriented book every now and then when most economics books are American. The book deals the with modern approach to macro economicsa and uses micro-economic foundations. It gives timely examples and lively case studies taken from the European and global economic scene. Even for business school students this book will be very usefull in understanding the european ecnomic envoronment. Moreover it's well written, easy to read style.

This book by Prof. Amit Bhaduri makes a sincere and serious attempt towards locating the functioning of the macroeconomy, much closer to the real world, unlike those umpteen number of textbooks, which tries to portray ideal world features. Ever since the days of classical political economy, due to the rise to dominance of neoclassicism as an economic ideology, the study of economics has been less and less been able to make economics intelligible to address the issues of the economy in which we live in. Prof. Bhaduri's work in this regard ought to be appreciated in this regard, especially during these days when we are at the zenith of neoclassical theorising.

Decent text for early explorations into the field. As Dr Gowland taught me some topics in Monetary Economics at the University of York, U.K. some 15 years ago, I am slightly biased however I recommend it for students of this interesting area.

This is a pretty good book. I used it to help me pass my college's macro class. The book makes macro very easy to understand in comparison to my college text book.

An introduction to macroeconomics written by the creator of the Taylor Rule. It begins with an overview of economics in general including market economies and the supply/demand model. Later topics include measuring GDP, the spending allocation model, unemployment, productivity, money, inflation, fiscal policy, monetary policy, financial markets, and international trade. The text has bright, eye-catching graphics and convenient review boxes placed throughout the chapters but tends to focus more on the U.S. economy than economies in general.

This book is full of interesting articles from the magazine "Dollars & Sense" relating to Macro Economics.

The pieces contained in this book are pleasant to read and full of great opinion and facts!

Dr. Kasper covers the contributions of economists who opposed Keynesian thought and achieved fame and fortune by it. The analysis of modern economics is sophisticated, yet sufficiently transparent that the whole book contains only two equations.

Generally chapters trace the development of the Chicago school of laissez-faire economics from Frank Knight's studies of risk and uncertainty to Robert Lucas' rational expectations. Each chapter gives a brief introduction to one economist: Knight, Simons, von Hayek, Friedman, Buchanan and Lucas, followed by a summary of his thought, his methodology, and his conclusions. Dr. Kasper takes seriously their intellectual development while pointing out their limitations as well.

While Dr. Kasper herself is an institutionalist economist, who is critical of mathematical legerdemain, she writes of these men sympathetically with literary flair.

Though the hardback edition is too expensive to use as a textbook, its readability for undergraduates to professionals makes me hope that it will appear soon in paperback.