Knowledge that Transforms

This paper estimates a model of the United Kingdom's monetary sector comprising supply and demand functions for various types of monetary assets including currency, bank reserves, demand deposits, time deposits, and total deposits. The model is closed by a simple distributed lag version of the quantity theory of money. Since the matrix of endogenous variables turns out to be triangular, the model is superficially recursive and thus OLS may be a consistent, FIML estimator of the system. In case the other conditions for recursiveness are not met and the system is genuinely interdependent, TSLS estimates are also presented. Various interest rates and income elasticities are calculated. They conform broadly with previous single equation estimates of their magnitude.

THE PURPOSE OF THIS STUDY IS TO PROVIDE DATA AND ANALYSIS FOR A DISCUSSION OF PRIVATE CARRIAGE. THE STUDY ATTEMPTS TO ANSWER THREE QUESTIONS' 1. HOW HAS THE GROWTH OF PRIVATE ROAD HAULAGE COMPARED WITH FOR-HIRE HAULAGE AND OTHER MODES OF TRANSPORTATION{ 2. WHAT FIRMS IN WHAT INDUSTRIES AND REGIONS ARE NOW MAKING EXTENSIVE USE OF PROPRIETARY HAULAGE{ 3. WHAT ARE THE CHARACTERISTICS OF A TYPICAL FIRMS TRANSPORTATION REQUIREMENTS THAT LEAD IT TO EMPLOY PRIVATE CARRIAGE{ THE DATA WERE ANALYSED WITH THE AID OF AN ECONOMIC MODEL OF VERTICAL INTEGRATION WHICH ASSUMES THAT PROPRIETARY HAULAGE WILL BE EMPLOYED BY FIRM WHENEVER IT IS PROFITABLE FOR THE FIRM. THE HYPOTHESES THUS GENERATED WERE THEN SUBMITTED TO STATISTICAL TESTING. THIS RESEARCH WAS PERFORMED FOR THE TRANSPORTATION CENTER AT NORTHWESTERN UNIVERSITY. /RRL/

Michael J. Hamburger, Gerald L. Thompson, Roman L. Weil, Jr., Computation of Expansion Rates for the Generalized von Neumann Model of an Expanding Economy, Econometrica, Vol. 35, No. 3/4 (Jul. - Oct., 1967), pp. 542-547