Book Reviews Alvin L. Aim and Robert J. Weiner, eds., Oil Shock: Policy Response and Implementation (Cambridge, Mass.: Ballinger, 1984), 239 p.Douglas R. Bohi and W. David Montgomery, Oil Prices, Energy Security, and Impact Policy (Washington, D.C.: Resources for the Future, 1982).Robert H. Nelson, The Making of Federal Coal Policy (Durham, N.C.: Duke University Press, 1983).James Plummer, Terry Ferrar. and William Hughes, eds., Electric Power Strategic Issues (Arlington, Va.: Public Utilities Reports, and Palo Alto, Calif.: QED Research, 1983).H. C. Kunreuther, J. Linnerooth, et al., Risk Analysis and Decision Processes: The Study of Liquefied Energy Gas Facilities in Four Countries (Berlin, Heidelberg, New' York. Tokyo: Springer-Verlag, 1983).Arlon R. Tussing and Connie C. Barlow, The Natural 0us Industry: Evolution, Structure, and Economics (Cambridge, Mass.: Ballinger Publishing Co., 1984). (1985)

OPEC I1 spawned a number of studies of oil market dynamics and possible policy responses duringoilsupply interruptions.This hook fills aparticularniche by organizing a set of easily readable papers on improving policymaking, with a focus on the implementation of revenue recycling and oil stockpile programs.By design, it doesnot attempt anin-depthanalysisofpast oildisruptions, theireconomicconsequences, or broad policy considerations for responding to oil interruptions.The volume is organized into three major sections: the oil markets during disruptions, macroeconomic policies, and oil stockpile strategies and issues.Two of the eleven chapters have appeared elsewhere in journals, and all hut one were originally presented at a conference entitled "Energy Security Policy Implementation Issues," held in midJuly 1982, under the auspices of the Harvard Energy and Environmental Policy Center.Although virtually all policy prospects are at least mentioned, this volume is really a treatment of two policy options.Revenue "recycling" is advocated for addressing the possible adverse impacts of rising oil prices on households.It is offered primarily to keep government from implementing price controls and allocation schemes during an oil shock.Macroeconomic considerations appear to he second-order concerns.The second option discussed thoroughly is the filling and drawdown of the Strategic Petroleum Reserve (SPR), both unilaterally and in concert with the public reserves of other oil-importing countries.The fundamental macroeconomic problem is the feasibility of and mechanisms for stabilizing emplopent and output without exacerbating the inflationary effects of a shock.However, this issue is largely ignored in the section on macroeconomic policy, which primarily addresses the issue of revenue recycling.Several authors correctly note that this term is a misnomer: there is no extra income to recycle because federal deficits worsen rather than improve during an oil shock.In fact, today's draconian federal deficits effectively remove from the policy agenda any options that reduce taxes.The section on macroeconomic policies includes two chapters on specific revenuerecycling strategies: a temporary reduction in income taxes (M.C .Rarth and E. Berk) and a one-time issuance of federal checks through the Internal Revenue Service (S. Kelman).Using results from a macroeconomic model, R .G. Hubbard shows that the effectiveness of a temporary income tax reduction depends importantly on whether the recipients perceive the income as a permanent or temporary gain.Even if all income were treated as a permanent gain, however, the estimated effect of recycling policies will vary widely depending on key macroeconomic parameters, as discussed in Hickman (1984) and Energy Modeling Forum (1984).R. S. Pindyck and J. J. Rotemberg's article is broader in scope than the other 1.See. for example.the summary of the study of the macroeconomic effects of oil supply shocks by the Stanford University Energy Modeling Forum in Hickman and Huntington (1984).