THEORETICAL ISSUES IN INTERNATIONAL ECONOMICS.

By Prof. Meredith O. Clement (Economics), Richard L.Pfister, Kenneth J. Rothwell. Boston:Houghton Mifflin Co., 1967. 449 pp.$6.50; paper $5.25.

Since the launching of Sputnik I, and perhaps in part because of it, education in America has been changing rapidly. These alterations embrace much more than old and new technology. It is noticeable in the colleges in that entering students, for the most part, are far better prepared academically. The retention of their interest requires greater intellectual challenges, and this has accelerated the learning process so that undergraduates now frequently enjoy the stimulation of working on concepts that only a few years ago were almost exclusively the province of graduate schools.

This excellent volume by Professor Clement and two former colleagues is designed to supply the growing demand for more advanced text material, specifically the demand for a systematic presentation, between one set of covers, of some of the most important new ideas and controversies that enliven international trade theory and international monetary theory. The chapters on trade theory cover relative factor prices and relative factor supplies, the terms of trade, and regional integration. Those on monetary theory discuss the adjustment mechanism in international payments, fixed and flexible exchange rates, the effects of elasticities and absorption in the analysis of devaluation, the dollar shortage and the dollar glut, and the adequacy of international reserves.

The frontier is where the action is, and by taking students beyond the periphery of the "conventional wisdom" this book provides the challenge of sophisticated concepts as well as the more important challenge of significant problems requiring further advances for their solution. Perhaps some of those introduced to these questions by this volume will eventually be among those scholars who will help to answer them. But whether they are or are not of this company, all careful readers will have a more profound understanding of international economics.

Professor Marx and Professor Clement teachInternational Economics at Dartmouth.