Reviewing_Lucas_ResearchPaper - Book Reviews techniques of...

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techniques of the new economic geography—a study which points out that simply lowering inter- regional trade barriers and trade costs within China may not alone solve the tendency for inte- rior regions to fall behind. The issue of regional impacts of trade reform is also taken up by Mingtai Fan and Yuxin Zheng, who report on the construction of a general equilibrium model, the PRCGEM model, which distinguishes impacts on regions within China. One issue that many thought had become of minor significance—the determinants of exchange rate changes—is the subject of an inter- esting chapter by Lei Lei Song. He concludes that the overall performance of trade has been an important determinant of exchange rate changes in the past. Given the re-emergence of this issue in the context of U.S.-China trade relations, this paper warrants careful attention. Overall, this book is an excellent contribution to both the study of economic reform in China, and of modeling techniques for economies such as China which are more challenging to model than the industrial economies. Given the rising importance of China in world trade, and as a source of ideas for development in other devel- oping economies, I hope that this book will attract a wide readership. W ILL M ARTIN World Bank Lectures on Economic Growth. By Robert E. Lucas, Jr. Cambridge and London: Harvard University Press, 2002. Pp. xi, 204. $52.00. ISBN 0–674–00627–5. JEL 2002–0767 This volume collects five influential papers by Lucas and reflects his intellectual journey over a quarter of a century, rather than what he would write today (p. xi). His valuable, most current views are in the introduction. There he recog- nizes that knowledge spill-overs help countries during development, and the development process needs on-the-job experiences such as export operations. It is skill shortage that limits foreign investment in low wage countries. Thus, qualified labor is crucial to industrialization and in fertility decisions, the quality/quantity trade-off shapes the demographic transition. Audacious, brilliant, and candid, Lucas has inspired theorists in development economics. Even dissenters have been stimulated to present
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This note was uploaded on 02/20/2009 for the course ECON 4730 taught by Professor Henrywan during the Fall '08 term at Cornell University (Engineering School).

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Reviewing_Lucas_ResearchPaper - Book Reviews techniques of...

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