Richard Blundell CBE FBA holds the David Ricardo Chair in Political Economy at University College London and is Research Director of the Institute for Fiscal Studies, London. He is also Director of the Economic and Social Research Council's Centre for the Microeconomic Analysis of Public Policy. Professor Blundell serves as President of the Econometric Society for 2006. Whitney K. Newey is Professor of Economics at the Massachusetts Institute of Technology. A 2000-01 Fellow at the Center for Advanced Study in the Behavioral Sciences in Palo Alto, he is Associate Editor of Econometrica and the Journal of Statistical Planning and Inference, and formerly served as Associate Editor of Econometric Theory. Torsten Persson is Professor and Director of the Institute for International Economic Studies at Stockholm University and Centennial Professor of Economics at the London School of Economics. He was elected a Foreign Honorary Member of the American Academy of Arts and Sciences in 2001 and served as President of the European Economic Association in 2003.

"I think this book may be a useful reference for further contributions on the economic theory" - Jose A. Ordaz, Universidad Pablo de Olavide, Technometrics

• 1. The economics of social networks; 2. Multi-contracting mechanism design; 3. Allocative and informational externalities in auctions and related mechanisms; 4. The economics of relationships; 5. Information in mechanism design; 6. Communication in economic mechanisms; 7. Advances in dynamic optimal taxation; 8. Quantitative macroeconomic models with heterogeneous agents; 9. Modeling inefficient institutions; 10. Whither political economy? Theories, facts, and issues; 11. Comments on Acemoglu and Merlo.