Knowledge that Transforms

[The introduction of ratchet effects into the consumption and investment functions of the Smithies model does not provide an endogenous explanation of cyclical fluctuations and growth, contrary to Smithies' expectation. As in other cycle models, the growth trend can only be explained by exogenous forces.]

[The core is the set of all unblocked allocations. Implicit in this definition is the idea that if an allocation is proposed which could be blocked, some coalition will form and issue a counterproposal which it can enforce. A process of successive counterproposals based on this idea is shown to converge in a finite period of time (amost surely) to the core.]

[Market determination of the value in exchange (price) of money is considered in a general equilibrium finite horizon model. The possibility of the price of money being zero in equilibrium and the role of taxes (payable in money) in preventing a zero price are considered.]

This paper presents a comparison of three distributed lag estimators: OLS, the Almon procedure, and the Hannan inefficient method. Each method is compared for sample sizes of 50 and 100 for several alternative distributed lag shapes and residual process structures. The results not only reveal the relative performance of these estimators, but also provide evidence on each method's performance under misspecification with respect to lag length and the residual process.

[We study an economic model where one group of agents is guided by different prices from those of another group. This situation arises, e.g., in the case of excise taxes, subsidies, and import and export tariffs in international trade. It is established that a decrease in the specified divergence between the equilibrium price vectors implies an increase in welfare in a certain natural sense. The result broadens a conclusion of a classical theorem of welfare economics and answers a question of Foster and Sonnenschein [6]. It also has some bearing on the theory of second best.]

The durabilities of a consumption good produced in a perfectly competitive market or by a monopoly are compared. The analysis is conducted in terms of firm profit maximization in a Cournot industry. Conclusions are based on the properties of the entire optimal path rather than on the steady state alone.

I N 1956 Gale [4] considered a general model of balanced growth and asserted the existence of price vectors which equate the economic growth with the technological growth rate. This model of Gale was an extension of fundamental results earlier proven by von Neumann for the case in which the production space was polyhedral. Recently Hulsmann and Steinmetz [6] demonstrated that Gale's theorem was not true by constructing a counterexample. In this paper we shall prove that Gale's theorem in a modified form is true and with a certain regularization the original theorem of Gale is valid. This regularization will be automatically satisfied by polyhedral production spaces so that as a corollary the proof for the polyhedral version of Gale's theorem will be attained. Finally we show that the counterexample of Hulsmann and Steinmetz [6] does not satisfy this regularization.