I. Characteristics of the game-theoretic approach, 559. — II. Theories of fixed-threat bargaining: Nach's theory, 563; the Zeuthen-Harsanyi theory, 566; Raiffa's theories, 569; a welfare theory, 572; further critique, 574. — III. Theories of variable-threat bargaining: an illustrative duopoly situation, 582; Nash's theory, 589; a Shapley theory, 593; Raiffa's theories, 594; Braithwaite's theory, 595; other theories, 597; Critical evaluation, 599. — IV. Conclusion, 602.

I. Fighting speculative flurries, 312. — II. Living with a deficit on the basic balance, 314. — III. Conclusion, 316.

The Strotz-Wold Reply, however, penetrates to the heart of the issue, almost, and it will probably be illuminating to make a rejoinder. To begin with I should like to say that they are justified in taking exception to the unfortunate wording of the headnote. Though, when applied to the sequence of recipes given out by Wold, my remarks do not lack for verisimilitude, they are certainly not true to the letter of the Strotz-Wold article, and I should have taken pains not to convey the impression that I thought they were.2 Accepting their just remonstrance, I turn to the text of my article. The main contention of my paper was that the classical scientific notion of causality (not, however, the doctrine of cause and effect) 3 is adequate to rationalize the construction of non-triangular or interdependent mechanical models in economics; that employment of the classical notion in the case of non-triangular systems neither leads to paradox nor calls for novel categories of causality, e.g., circular causality, bi-causality, vector causality,

W l THAT have we learned from ComIV Vmission on Money and Credit about processes and responses in monetary policy? So far as I can see, from Report itself, very little but perhaps experts in monetary economics were not a significant part of audience at whom Report was aimed. So most fruitful course may be to turn primarily to staff papers. Here there is substantial evidence of quantity theory reborn at least in sense that money matters a good deal in determining aggregate spending on current output and of an important postwar change in monetary theory. As noted in my introduction to this volume, this postwar shift in theory is centered in approach to demand for money and other assets. In this theory, channels through which variations in money supply affect levels of income and employment include not only a change in the interest but also changes in relative prices of all assets-real and financialwhich in turn lead to shifts in spending on existing assets and currently produced goods and services. Thus in its extreme form approach suggests that we need to look not at one interest rate but at an extremely large number, including implied interest rates on all real assets and including consumer goods of any degree of durability. In logical terms, this approach offers an elegant rapprochement for devotees of and quantity-theory approaches to role of money, and for monetary-versus-fiscal policy disputes since I930's. If look prevails, we may look back at much of this controversy as a good deal less significant than it has seemed en route. The great controversy over Is savings really equal to investment? of late I930's and early I940's springs to mind. But agreement on this mechanism doesn't necessarily tell us how important money is quantitatively. If we look at staff papers (or at least, at sample I managed), what does professional support for renaissance of money and monetary policy amount to? Friedman and Meiselman, as might be expected, plump for money as a prime determinant of level of spending on current output, and show convincingly that a simple, traditional monetary model versus a simple traditional Keynesian model test gives verdict clearly to stability for velocity over stability for ratio of autonomous to income, including cases where reasonable lags are introduced. Moreover, they go on to spell out portfolio balancing mechanism as at least a plausible mechanism through which this monetary effect may be exerted. If we take Section VI of their paper as a statement of new monetary orthodoxy, on intellectual grounds at least a good deal of basis for long quarrel between monetary and Keynesian economists has been reasoned (or compromised) away. Few, even most ardent neo-Keynesians, would disagree that impact of open market operations may be through spreading net which Friedman and Meiselman spell outnot merely through one (bond) interest rate alone acting on investment decisions. The major challenge to now generally accepted fiscal policy position as our really powerful stabilization tool becomes a strong one if a reasonably stable demand for money is added to mechanism as at least Friedman and Meiselman argue. The C.M.C. staff papers contain no empirical answer to Friedman and Meiselman challenge to show better results with another model. Tobin, in his paper on debt policy, provides an elegant statement of a very similar mechanism through which changes in money stock and liquidity may influence spending decisions on current output through rebalancing of asset portfolios. But I hope it will not be too dissident a note to suggest that we really know very little empirically about validity of this description of channels of monetary policy; and that elaborate portfolio-balancing general equilibrium approach lacks intuitive appeal

Journal Article “Credit Risk and Credit Rationing”: Comment Get access A. J. L. Catt A. J. L. Catt New Zealand Institute of Economic Research, Inc., Wellington, New Zealand Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 77, Issue 3, August 1963, Pages 505–510, https://doi.org/10.2307/1879576 Published: 01 August 1963

Abstract The expression "accounting theory" which is what the title of this article might be interpreted to cover would be far too ambitious a programme on this occasion. It can be used in at least two senses which it is desirable to distinguish. The first interprets "accounting" as a gerund, that is, the words "theory of accounting" come to mean a statement or set of statements about the activity that is known as accounting, or, in other words, propositions about the accounting that is carried out by people who are called accountants. The second interpretation possible is that of regarding the word "accounting" as a substantive or noun, meaning an area of study. A theory of accounting in this sense becomes a set of statements about the things that accountants or others interested in the field observe and think about, as well as what accountants do. This field has been explored only in more recent times than the other and has, to a great extent, developed out of it. The distinction between these two interpretations is perhaps rather shadowy and subtle, and they are not altogether divorced from each other.

Journal Article Minimization of Economic Rent in Spatial Price Equilibrium Get access Vernon L. Smith Vernon L. Smith Lafayette and Stanford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 30, Issue 1, February 1963, Pages 24–31, https://doi.org/10.2307/2296027 Published: 01 February 1963

Abstract The article presents an analysis of various methods of allocating and distributing expenses in retail enterprises. Allocation and distribution methods are available which can yield, on a departmental basis, a contribution margin and a reasonably accurate controllable profit figures, but departmental net profit can be obtained only if certain indirect expenses continue to be allocated arbitrarily on some such basis as sales. For product lines and individual items, contribution statements can be prepared by allocating certain expenses on an estimated or computed basis and arbitrarily allocating others. Allocation of costs to products and items, where applicable, is more reliable for establishing prices. For cost analysis, cost control and other managerial purposes than the use of departmental averages and departmental figures. The underlying principles of classification are not ephemeral and methods which are being applied in allocating and distributing costs to products and items may be regarded as applications of fundamental classification principles.

Abstract The article focuses on two points of view concerning the cost categories relevant to income measurement. The ultimate conclusion of the argument is that the fixed costs of production are costs without service potential since their incurrence in one period has no effect on whether they will be incurred in the future. Variable production costs on the other hand do have service potential since their incurrence today will overcome the need for their incurrence in the future. The essence of the argument seems to be contained in the idea that the only costs, which will be reduced in the future because they are incurred today, are variable costs since the fixed costs will remain the same with or without the production of goods, which are included in the inventory. In other words, the value of the inventory is determined only by the extra costs occasioned by producing the inventory. These costs are variable costs of production since the fixed costs of production would be the same with or without the production of the inventory. The idea of opportunity costs is certainly much broader in its possible impact on accounting theory than its position in the Sorter-Horngren thesis of "relevant costing."