With the going rate of pay only

25 per thousand words, the 927 contributors to "The New Palgrave Dictionary of Economics" must have been attracted by something else: perhaps the sheer scope of the undertaking, or maybe the company they knew they would be keeping. Surely they have not been disappointed on either score.

The massive, four-volume work, published this month in the United States and Britain, is more encyclopedia than dictionary, and far surpasses any other reference work on economics. It includes 655 biographies among its nearly 2,000 entries and has about 4,000 cross references.

The entries are generally far more than a brief definition. They usually are essays with a point of view rather than just a bland description of the subject, and many run to thousands of words. Moreover, they are followed by bibliographies listing the major articles and books on each subject, and in the case of biographies, the key works of that person.

Kenneth J. Arrow of Stanford University, one of the nine American winners of the Nobel Prize in economics to contribute to the New Palgrave, heaped high praise on it. "The New Palgrave will be an indispensable reference tool for both junior and senior scholars in economics and perhaps even more for the journalist or business executive... . The authors include all the leading economists and many younger and highly active researchers. In many cases, interest will attach as much to the views of the particular author as to the content of the article, for there is a tendency for frank opinions rather than impersonal presentation," said Arrow.

"Many readers will enjoy simply browsing, as they would in a really great dictionary," he added, and quite correctly so.

Low pay not withstanding -- contributors also got a set of the $550 books in addition to the approximately $44 per thousand words -- the editors were able to persuade many of the world's outstanding economists to participate. Among the American Nobel winners writing in the areas for which they are famous are Milton Friedman on the quantity theory of money, Wassily Leontief of Massachusetts Institute of Technology on input-output analysis, and James M. Buchanan of George Mason University on constitutional economics.

Arrow naturally describes Arrow's Theorem and Gerard Debreu of the University of California at Berkeley discusses the existence of general equilibrium. James Tobin of Yale University has an entry on financial intermediaries that runs nearly eight pages, but he also has done two biographical entries on other Yale economists.

The first is about the life and work of Irving Fisher, who died in 1947. Tobin describes him as "widely regarded as the greatest economist America has produced," and explains why. The second is about Arthur L. Okun, the former chairman of the Council of Economic Advisers, who was a fellow at the Brookings Institution when he died in 1980 at the age of 52. Tobin was a close friend of Okun's, and it shows in the depth and the loving tone of the biography.

Many of the essays, such as the one by former Federal Reserve Governor Henry Wallich and David Lindsey, a Fed economist, are rich expositions of a subject that can easily be read and understood by an intelligent layman. Others are full of mathematical equations and descriptions that might challenge a PhD economist not familiar with the specific subject.

The "New" Palgrave is so labeled to contrast it with the original "Dictionary of Political Economy" edited by R.H. Inglis Palgrave, a British financial journalist, and published just before the turn of the century. A few entries in the new work are reprinted from the old one.

Editors of the New Palgrave are economists John Eatwell of Trinity College, Cambridge, England; Murray Milgate of Harvard University, and Peter Newman of Johns Hopkins University. Eatwell came to the project about five years ago, and he enlisted the aid of Milgate and Newman.

Eatwell said the trio first drew up a subjective list of economists they regarded as "the top 100" in the world. "We asked them to write on assigned topics and anything else they chose," he recalled. "Eighty-one responded."

With that prestigious list of participants in hand, requests for articles went out to other economists. "The profession responded enthusiastically," Eatwell said, "especially the older members. The younger ones did not know the old Palgrave."

As the articles began to flow in, each editor read them and made comments on a master sheet using different colors of ink. About one-fifth of the articles were accepted the first time around. Other went back for revisions, some two or three times. In the end, about 25 were simply scrapped and other authors found, Eatwell said.

One disappointment is the cutoff age chosen for biographies. To be included, a living economist had to be prominent, of course, but also had to have reached the age of 70 before 1986. That meant that many economists -- such as Arrow, whose prominence is hardly in doubt -- do not have biographies.

Some readers of the New Palgrave have also looked to see if they can discern any left-of-center bias in the selection of topics or contributors. After all, Eatwell himself is left-of-center and an adviser to Neal Kinnock, leader of Britain's Labor Party. So far, there is not much clear evidence of such bias, though almost everyone has noted the absence of an entry on supply-side economics.

Eatwell acknowledged that not having such an entry "probably was a mistake," but he defended its absence on the grounds that there is still no clearly defined theoretical basis for many of the claims of the supply-siders. But do not be surprised if an entry shows up the first time the New Palgrave is revised.

The editor defended the work as unbiased, with the important proviso that the entries were generally written to show a point of view rather than an impersonal survey of economic literature on the topic.

For instance, while Friedman wrote on the quantity theory of money, the foundation of monetarist economics, Phillip Cagan of Virginia Polytechnic Institute was chosen to write about monetarism. Cagan was an "insider" -- that is, a monetarist -- who nevertheless could be trusted to write dispassionately about the doctrine, warts and all, according to Eatwell. Some other nonmonetarist economists applauded the choice.

There are a host of other articles by economists from the Washington area, or by those who have worked here in the past. To note a few:

Edward Denison of Brookings wrote on his specialty, growth accounting, and contributed a biography of George Jaszi, the long-time head of the Commerce Department's Bureau of Economic Analysis.

Stephen H. Axilrod, formerly of the Federal Reserve staff, did the biography of Wallich.

Michael R. Darby, assistant secretary of the Treasury for economic policy, wrote on the consumption function and the wealth effect.

Geoffrey H. Moore, former commissioner of labor statistics, did biographies of Arthur F. Burns, Wesley Mitchell and Solomon Fabricant, all of whom worked together at the National Bureau of Economic Research.

Joseph Pechman of Brookings wrote on built-in stabilizers and inheritance taxes, along with a biography of Walter Heller. Brookings colleague George Perry contributed articles on cost-push and demand-pull inflation and deficit financing.

Mancur Olson of the University of Maryland wrote articles on bureaucracy and collection action. Robert Nathan of Robert Nathan Associates and Herbert Stein of the American Enterprise Institute wrote other biographies.

In a review in the "AEI Economist," Stein, who has uttered many harsh words about sloppy work by economists, calls the New Palgrave "the best comprehensive picture of economics we are likely to see in this generation... . Exploring these pages is the best possible way to learn what economics is about today."

It is also a pleasure to read.