Economics & Finance 2009 press.princeton.edu Contents General Interest 1 Economic Theory & Research 11 Game Theory 14 Behavioral & Experimental Economics 15 Finance 16 Econometrics & Mathematical Economics 20 Labor & Organizational Economics 24 Public Economics 25 Political Economy, Trade & Development 26 Public Policy 31 Economic History & History of Economics 34 Economic Sociology & Related Interest 37 Classic Textbooks 42 Index/Order Form 44 Many of the books in this catalog are now being made available as ebook editions for the Amazon Kindle, Sony Reader, and in other formats that can be purchased from online booksellers. This icon, listed with the title information for the print edition, indicates that an electronic edition is available. For more infor- mation, please visit our website at press.princeton. edu. Princeton ebooks are currently available only in North America. TEXT Professors who wish to consider a book from this catalog for course use may request an examination copy. For more information please visit: press.princeton.edu/class.html Forthcoming Animal Spirits How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism George A. Akerlof & Robert J. Shiller “This book is a sorely needed corrective. Animal Spirits is an important—maybe even a decisive— contribution at a difficult juncture in macroeconomic theory.” —Robert M. Solow, Nobel Prize–winning economist The global financial crisis has made it painfully clear that powerful psychological forces are imperiling the wealth of nations today. From blind faith in ever-rising housing prices to plummeting confidence in capital markets, “animal spirits” are driving financial events worldwide. In this book, acclaimed economists George Akerlof and Robert Shiller challenge the economic wisdom that got us into this mess, and put forward a bold new vision that will transform economics and restore prosperity. Akerlof and Shiller reassert the necessity of an active government role in economic policymaking by recovering the idea of animal spirits, a term John Maynard Keynes used to describe the gloom and despondence that led to the Great Depression and the changing psychology that accompanied recovery. Like Keynes, Akerlof and Shiller know that managing these animal spirits requires the steady hand of government—simply allowing markets to work won’t do it. In rebuilding the case for a more robust, behaviorally informed Keynesianism, they detail the most pervasive effects of animal spirits in contemporary economic life. George A. Akerlof is the Daniel E. Koshland Sr. Distinguished Professor of Economics at the University of California, Berkeley. He was awarded the 2001 Nobel Prize in economics. Robert J. Shiller is the Arthur M. Okun Professor of Economics at Yale University. March 2009. 248 pages. Cl: 978-0-691-14233-3 $24.95 | £14.95 Also by Robert J. Shiller New Second Edition The Subprime Solution Irrational How Today’s Global Financial Crisis Happened, and What to Do about It Exuberance “Although the housing boom “Shiller . is an ardent financial-technology optimist, and his book is has lasted longer than anyone a torrent of fascinating ideas.” could have imagined, the —Clive Crook, Financial Times economy would still be in big The subprime mortgage crisis has already wreaked havoc on the trouble if it came to an end. lives of millions of people and now it threatens to derail the U.S. Robert Shiller, who correctly economy and economies around the world. In this trenchant book, called the stock bubble in his best-selling economist Robert Shiller reveals the origins of this crisis book Irrational Exuberance has and puts forward bold measures to solve it. added an ominous analysis of the housing market to the new 2008. 208 pages. 4 line illus. Cl: 978-0-691-13929-6 $16.95 | £9.95 edition. ” —Paul Krugman, New York Times 2005. 336 pages. 9 line illus. 4 tables. Cl: 978-0-691-12335-6 $35.00 | £19.95 press.princeton.edu general interest • 1 New Forthcoming Economic Gangsters Portfolios of the Poor Corruption, Violence, and the Poverty How the World’s Poor Live on $2 a Day of Nations Daryl Collins, Jonathan Morduch, Raymond Fisman & Edward Miguel Stuart Rutherford & Orlanda Ruthven “Economic Gangsters is a fascinating exploration of the dark side of economic development. Two “[W]ell written and accessible. The book should of the world’s most creative young economists find its way onto the shelves of nearly all academics use their remarkable talents for economic sleuth- and economists focused on microfinance and ing to study violence, corruption, and poverty financial decision making among the poor.” in the most unexpected ways. Subjected to —Christopher Blattman, Yale University their genius, seemingly inconsequential events (like New York City parking tickets and Suharto’s About forty percent of the world’s people live catching a cold) become potent tools in un- on incomes of two dollars a day or less. If you’ve derstanding how the world really works. Rarely never had to survive on an income so small, it is has a book on economics been this fun and this hard to imagine. How would you put food on the important.” table, afford a home, and educate your children? —Steven D. Levitt, coauthor of Freakonomics How would you handle emergencies and old age? Every day, more than a billion people In Economic Gangsters, Raymond Fisman and around the world must answer these questions. Edward Miguel take readers into the secretive, Portfolios of the Poor is the first book to systemati- chaotic, and brutal worlds inhabited by these cally explain how the poor find solutions. lawless and violent thugs. Join these two sleuth- ing economists as they follow the foreign aid Indispensable for those in development studies, money trail into the grasping hands of corrupt economics, and microfinance, Portfolios of the governments and shady underworld characters. Poor will appeal to anyone interested in knowing Spend time with ingenious black marketeers as more about poverty and what can be done they game the international system. Follow the about it. steep rise and fall of stock prices of companies with unseemly connections to Indonesia’s former Daryl Collins directed the South African Financial dictator. See for yourself what rainfall has to do Diaries project and has taught finance at the with witch killings in Tanzania—and more. University of Capetown. Jonathan Morduch is professor of public policy and economics at New Raymond Fisman is the Lambert Family Professor York University. Stuart Rutherford is founder of of Social Enterprise and research director of the SafeSave, a microfinance institution in Bangla- Social Enterprise Program at Columbia Business desh. Orlanda Ruthven recently completed a School. He is a columnist for Slate. Edward Miguel doctoral degree in international development at is associate professor of economics and director the University of Oxford. of the Center of Evaluations for Global Action at June 2009. 320 pages. 9 line illus. 36 tables. the University of California, Berkeley. Cl: 978-0-691-14148-0 $29.95 | £17.95 2008. 256 pages. 4 line illus. 1 table. Cl: 978-0-691-13454-3 $24.95 | £14.95 To receive notices about new books, subscribe for email at: press.princeton.edu/subscribe 2 • general interest Forthcoming New The Invisible Hook Heroes and Cowards The Hidden Economics of Pirates The Social Face of War Peter T. Leeson Dora L. Costa & Matthew E. Kahn “A fresh and provocative take on the Golden Age “This remarkable book is destined to become pirates. Leeson writes with clarity and the depth a classic in social science. It addresses issues of of his research is impressive.” supreme importance and timeliness—loyalty, —Colin Woodard, author of The Republic of Pirates betrayal, heroism, cowardice, survival, the chal- lenges of diversity, and the benefits of social Pack your cutlass and blunderbuss—it’s time to bonds. It rests on rigorous statistical analysis of go a-pirating! The Invisible Hook takes readers an extraordinary historical archive, and yet it is so inside the wily world of late seventeenth- and readable as to be unputdownable. It deals with a early eighteenth-century pirates. With swash- single epochal event in one nation’s history—the buckling irreverence and devilish wit, Peter U.S. Civil War—and yet its lessons are highly rel- Leeson uncovers the hidden economics behind evant in many other eras and societies, including pirates’ notorious, entertaining, and sometimes our own.” downright shocking behavior. —Robert Putnam, author of Bowling Alone: The Collapse and Revival of American Community Peter T. Leeson is the BB&T Professor for the Study of Capitalism in the Department of Eco- Dora L. Costa teaches at the University of Califor- nomics at George Mason University. nia, Los Angeles. Matthew E. Kahn also teaches at June 2009. 296 pages. 8 halftones. 1 table. UCLA. Costa and Kahn are research associates at Cl: 978-0-691-13747-6 $24.95 | £14.95 the National Bureau of Economic Research. 2009. 344 pages. 11 halftones. 24 line illus. 1 table. Cl: 978-0-691-13704-9 $27.95 | £16.95 New The Price of Everything A Parable of Possibility and Prosperity Russell Roberts “[T]he best attempt to teach economics through fiction that the world has seen to date.” —Tyler Cowen, Marginal Revolution The Price of Everything is a captivating story about economic growth and the unseen forces that create and sustain economic harmony all around us. Russell Roberts is professor of economics at George Mason University, the J. Fish and Lillian F. Smith Distinguished Scholar at George Mason’s Mercatus Center, and a research fellow at Stanford University’s Hoover Institution. 2008. 224 pages. Cl: 978-0-691-13509-0 $24.95 | £14.95 press.princeton.edu general interest • 3 New New The Case for Big The Venturesome Economy Government How Innovation Sustains Prosperity in Jeff Madrick a More Connected World Amar Bhidé “Jeff Madrick makes a convincing case for the active role of government in the growth of our “Amar Bhidé provides a fresh and reassuring modern economy and our shared prosperity.” perspective on America’s technological position in —Senator Edward M.