Robert M. Solow, Institute Professor Emeritus of Economics at MIT, won the 1987 Nobel Prize in economics. His most recent book is Work and Welfare. (May 2009)

IN THE REVIEW

How to Understand the Disaster

Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke at a congressional hearing on oversight of the federal government’s intervention at AIG, Washington, D.C., March 24, 2009

A Failure of Capitalism: The Crisis of '08 and the Descent into Depression

by Richard A. Posner
No one can possibly know how long the current recession will last or how deep it will go. That is because the dangerous combination of the “real” recession—the unemployment and idle productive capacity that come from lack of demand—and the financial breakdown, each being both cause and effect of the …

Trapped in the New ‘You’re on Your Own’ World

High Wire: The Precarious Financial Lives of American Families

by Peter Gosselin
When the Bush-Cheney administration proposed to replace Social Security with a system of individually accumulated, individually owned, and individually invested accounts, my first thought was that its goal was to take the Social out of Social Security. It took a few minutes longer to realize that it also intended to …

‘Survival of the Richest’?

A Farewell to Alms: A Brief Economic History of the World

by Gregory Clark
Look at the graph reproduced on this page. It shows the material standard of living of the average English person over a span of eight centuries beginning in 1200. In 1800 the average English person was literally no better off, in food, clothing, and shelter, than in 1200.

How to Understand the Economy

Adam's Fallacy: A Guide to Economic Theology

by Duncan K. Foley
Educated friends who have never studied economics themselves often ask the economist Duncan Foley to recommend a book that will explain what economics is about. He doesnot find it easy, sees correctly that the standard seven-hundred-page elementary textbook is essentially unreadable, and usually ends up by suggesting the late Robert …

Mysteries of Growth

Why Economies Grow: The Forces That Shape Prosperity and How We Can Get Them Working Again

by Jeff Madrick
The standard measure of a national economy’s overall performance is its real gross domestic product (GDP). This is just the sum of all the goods and services produced during the year (except those used up in further production), valued at going market prices and then corrected for price inflation. The …

Party Line

Economic Report of the President together with The Annual Report of the Council of Economic Advisers

by The Council Of Economic Advisors
The Employment Act of 1946 committed the federal government to the pursuit of “maximum employment, production and purchasing power,” a commitment whose cash value has fluctuated drastically from time to time. It also established the Council of Economic Advisers (CEA), to be appointed by the president in order to provide …