Author: Peter J. Montiel
Publisher: Cambridge University Press
Price: £140.00 and £60.00
ISBN: 9780521514729 and 1733045
Economics courses at UK universities are attracting increasing numbers of overseas students. Many of them are from less-developed or developing countries, including the impressively performing economies of India and China. The lecture room is becoming more cosmopolitan every year. However, the courses these students are taught in their undergraduate degrees tend to be those relevant to rich economies such as the UK, the US and Europe. This situation is especially pronounced in the study of macroeconomics.
As this textbook makes clear, the macroeconomic issues facing less-developed economies are different from those of our own. In terms of macro institutions, production structures and international linkages, they are fundamentally very different. Macro institutions for fiscal and monetary policy in these countries tend to have limited credibility with regard to maintaining a healthy budgetary position and keeping the money supply stable. Treasuries regularly "overspend" and then place pressure on the central bank to set the printing presses going, risking hyperinflation. The challenge of overcoming these difficulties is one of the issues dealt with in Peter Montiel's book.
The production structures of poorer economies also present their own challenges. Such economies are often highly specialised in primary products or low-tech manufacturing and are highly reliant on the exports of these goods. Furthermore, while they are open in terms of their goods markets as a result, they are much less so when it comes to financial markets. Many also make the choice of a fixed exchange rate, as opposed to a freely floating rate of the kind found in the US and the UK. Macroeconomics in Emerging Markets gives lecturers everything they need to show how standard macroeconomic theory must be adapted to deal with shocks in such a context, and to facilitate far better policy responses. The book's latest edition also contains very readable material on past emerging-market issues, and on the impact of the post-2008 "great recession".
There is no better way to help economies across the world escape poverty than by making sure that their future policy leaders and politicians are equipped with the knowledge to tackle the challenges specific to their own countries. This is not to say that this textbook covers every aspect of policy that may be of relevance. Naturally, it is embedded in the pro-market school of policy advice, and so focuses on the pursuit of macro institutions that will best facilitate the workings of the market. Those seeking advice on how state intervention in the form of industrial or protectionist policy - which was used by more or less all the now-wealthy economies in the process of their development - will have to seek additional literature. Nevertheless, Montiel's work is an outstanding achievement.
Who is it for? Undergraduate and postgraduate students of macroeconomics and development economics, lecturers and policymakers. Montiel was a senior policy adviser at the International Monetary Fund and an economics chief at the World Bank - arguably there is no better guide.
Presentation: Unusually for an economics book, there is very little maths. This makes it highly accessible and very readable.
Would you recommend it? Yes, both to students and to lecturers aiming at "freshening up" their lectures by making them more relevant. For the latter, this is a great place to start.