Volume 4, Issue 4

Adam Smith's methodology -- and the modern economist's -- is one of theory, led by observation. Alternative methodologies, including opinion surveys of businessmen are no more likely to generate useful answers than this time-tested epistemology.

The idea that economists will come closer to the reality of business operations by sitting in their academic offices and making up stories than they might get by observing or talking to managers is bizarre.

Observation-based analysis at the firm and plant level is alive, well, and growing, according to Frank Giarratani. More than eight hundred scholars, including many economists, embrace observation-based analysis, and identify with industry studies as a research field based on this principle.

Harlan Greene wonders whether the inadequacy of U.S. efforts to gracefully accommodate its ethnic melting pot could account for the troubling statistics in "Garrison America."

Business reporters and Fed watchers focus on monetary policy which is no longer--if it ever was--the Fed's main job, according to Lester Telser. Ben Bernanke's own research suggests that even long ago the main danger to the economy came from the non-monetary effects of disruptions in confidence in the soundness of the banking system, a fact that is all the more true today.

After decades of near constancy at 40 cents on the dollar, the gender pay gap has declined markedly. Francine Blau and Lawrence Kahn document these developments and explore the reasons both for the remaining gender pay gap and changes in the gap over time.

Voluntary purchases of offsets for carbon emissions have been criticized as potentially increasing emissions. However, Joshua S. Gans argues that even if offsets do increase the consumption of carbon intensive goods, net emissions will always fall because these goods will become less carbon intensive.

John Morgan presents a radical proposal to sell voting rights at the IMF and redistribute power through market mechanisms instead of by formula.