Journal Article Comparative Advantage and the Theory of Tariffs: A Multi-Country, Multi-Commodity Model Get access Ronald W. Jones Ronald W. Jones Rochester, N.Y. Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 28, Issue 3, June 1961, Pages 161–175, https://doi.org/10.2307/2295945 Published: 01 June 1961

THE MULTI-PRODUCT firm occupies a prominent place among important but neglected topics in economic theory. Barring the programming approaches, a search of the literature reveals no comprehensive theoretical treatment of the subject. Indeed the brief development by Hicks in the mathematical appendix to Value and Capital [6] is probably the most thorough treatment in the sense of considering both the production and sales activities of the firm. Since Hicks allots only four pages to this topic, this is a remarkable state of affairs. While the literature on all phases of the multi-product firm is scanty, a few writers have considered the selling side of such a firm; the works of Bailey [1], Clemens [3], and Weldon [10] may be cited in this connection. On the cost and production side the literature is virtually non-existent. Even the work of Carlson [2], a standard reference for twenty years, deals only with the special case of joint cost but not with any other aspect of the multi-product firm. The purpose of this paper is to present a theory of cost and production for the multi-product firm. In developing this theory, the traditional concept of the firm as a social mechanism that connects the markets for factors of production with the markets for finished products will be retained. This is in contrast to the usual inward looking view of the firm that appears in the programming literature. But once the problem is clearly stated in traditional terms, it becomes apparent that the Kuhn-Tucker theorem, which can be thought of as the logical basis of the optimization techniques of activity analysis, can be used in a straightforward way to solve the problems of cost and production in the multi-product firm. The solution of the problem will show that the optimum conditions for the multi-product firm are different from those of the single-product firm. These differences are discussed briefly in the final section of the paper.

There are several major reasons why general levels and patterns of concentration in United States and United Kingdom manufacturing industry might be expected to differ; among them are size, economic history, growth patterns, international trade, and anti-monopoly policy. Assuming similar technology of production in both countries, smaller domestic markets (in terms of geography and level of demand) would make for higher concentration ratios in the United Kingdom, since fewer optimal-size firms would suffice for each industry.1 Of course, past technological trends may have offset this, by evolving lower optimal firm sizes, such as the British system of shorter runs as against American mass production. Britain's greater maturity, and the widespread rationalization waves in the last two generations, would point toward higher British ratios. As for growth patterns, Britain's higher proportion of basic manufacturing trades (metals and heavy engineering), where economies of scale may be greatest, might also indicate a higher general level of concentration. Britain's greater involvement in international trade probably is important for individual industries, though its effect on concentration ratios might go either way. And Americans might suppose that United States anti-trust policy has kept the ratios relatively lower there than in the United Kingdom (though anti-trust vigor may merely reflect a largely ideological, and token, effort against an especially grave concentration problem). Other reasons one way and the other could easily be added. With all the difficulties of measurement and comparison that plague this topic, and with all the counterpoised influences in the two countries, it is surprising that one recent comparison, by P. Sargant Florence in I953 dealing with the year I935, reaches the straightforward conclusion that on the whole American manufacturers are roughly equally in control as are the British.2 In contrast, Rosenbluth in I952 reached different conclusions for the same year, I935, on the basis of a frequency of employment in manufacturing industries by degree of concentration.3 In each iO per cent bracket, cumulative United Kingdom employment as a per cent of the total exceeded that in the United States; in short, more employment was in more highly concentrated industries. It is clear therefore that the general level of concentration is higher in the British industries.4 As for patterns of concentration in sectors and industries, Florence found a remarkable association between specific industry ratios, whereas Rosenbluth's figures for matched industries tended to show important differences. Whatever the truth about comparative concentration in the United States and the United Kingdom (and whatever such a comparison may mean), the discrepancy and obsolescence of these conclusions suggest a need for more research, especially concerning more recent years. Now that two new sets of ratios for a fairly recent year (195 i) are available, a new Transatlantic comparison is bound to be made. This paper, it is hoped, provides it. Methods. The methods used in this paper are intuitively simple.5 In the British data from Evely and Little, industries are classified according to the degree of concentration of their employment in the largest three firms, and this gives a frequency dispersion with ten ten-per-cent categories.6 For the United States a similar tabulation for the same year (195I) has been drawn from that rich volume of data com-

W HETHER or not shortages of highly educated and trained personnel, such as engineers and scientists, existed or were serious in recent years has been the subject of widespread discussion and indeed controversy.1 Typically, this discussion focuses on the question of whether there ought to be more engineers and scientists, in terms of our competition with the Russians, for example. It is not surprising then that controversy flourishes, since the answer to this question depends ultimately on one's value judgments, with respect to market and nonmarket variables. But more fundamentally, much of the disagreement over the issue stems from the variety of meanings attached to the term and the lack of empirical tests. To clarify the matter, Blank and Stigler in their recent book2 define and provide an empirical test for the existence of shortage. This paper re-examines some of the empirical evidence they submit and supplements it with additional evidence, part of which extends the analysis to more recent date. Briefly, here is summary of the BlankStigler approach and findings.3 They begin with this definition of shortage: a shortage exists when the number of workers available (the supply) increases less rapidly than the number demanded at the salaries paid in the recent past. Then salaries will rise, and activities which once were performed by (say) engineers must now be performed by class of workers who are less well trained and less expensive.4 (Italics in original.) Since I929, and more particularly since I939, they find that the earnings position of engineers has deteriorated substantially relative to all earners and to other professional earners. Although they note slight upturn in the relative earnings position of engineers since the beginning of the Korean WVar, this reversal is characterized as a minor cross-current in tide. Thus, the evidence leads them to conclude that there has been no but rather an increasingly ample supply of engineers. Furthermore, they predict that the downward trend in relative earnings position will continue.5

HE purpose of this paper is to consider T Canada's mechanism of international adjustment from I946 through I957. Canadian loans and export credits amounted to approximately $2 billion during this period. The classical writers, i.e., Ricardo and Mill, as well as the modern Keynesians, primarily Metzler and Machlup, state that when a nation is involved in long-term lending, the capital account is the independent variable and as such induces equilibrating changes in the current account.' The two schools differ, however, with respect to the mechanism of adjustment. The classical writers claim that adjustment occurs through changes in prices and factor allocations, whereas the latter group claim that adjustment takes place through changes in purchasing power. The thesis offered here, however, is that the adjustment process from this capital outflow can be explained conceptually by a system of mutually interdependent equations. The paper is divided into three parts. The first outlines the adjustment process, utilizing simultaneous equations for two periods, I94650 and I95I-57, using a three dimensional model, the analysis of which is not amenable to geometrical presentation.2 Then an attempt is made to verify statistically the hypothesis presented in the model. The last section deals with the application of the model for balance of payments analysis. Adjustment Process Under the Simultaneous Equations Approach

Stability of a Dynamic Input-Output System Get access Dale W. Jorgenson Dale W. Jorgenson Berkeley, California Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 28, Issue 2, February 1961, Pages 105–116, https://doi.org/10.2307/2295708 Published: 01 February 1961

Abstract The allocation of income taxes on financial statements is a relatively new development in corporate accounting. It is an extraordinarily important development because of its significant effect upon the determination of corporate net income and because, also, it seems to represent somewhat of an erosion of certain of our long-tested and long-standing definitions and concepts as to principles of accounting. As a general rule, accounting procedures for the allocation of income taxes have resulted in the placement of certain credit values for deferred income taxes in the balance sheet. The accounts representing these credit values have been called "deferred credits." Since these accounts are not part of corporate net worth they must be liabilities. It is an accepted procedure of auditing that the revenues and revenue charges of a business must be supported by evidence, preferably written evidence. There is no billing by a creditor, no evidence of legal liability, no evidence of the erosion of the accounting value of an asset, and no evidence of the consumption of accounting value. In short, there is no factual evidence, whatsoever, to support the accounting propriety of charging current income with a provision representing deferred income taxes.

Abstract In addition to the criteria set forth above, additional sets could be given for the realization of a capital contribution, a capital withdrawal, an investment, a liability liquidation, and a loan. It is felt, however, that those presented illustrate adequately the type of criteria currently used in practice. There are, of course, some instances where they are not strictly followed. The criteria are not thereby discredited, however, they apply in the vast majority of situations, and the exceptions perhaps point to inconsistencies in accounting theory. It should be understood that the writer does not advocate that these criteria necessarily should be followed. They are merely those which seem currently to be in effect. The criteria presented embody the factors of measurability and permanence, and serve as guides to the accountant in determining if a change in an asset or liability is sufficiently definite and objective to warrant recognition in the accounts. It should perhaps be pointed out here that the sale and the purchase are often the signal to the accountant that certain criteria have been met. In the normal situation, the sale is the signal that revenue has been realized and the purchase is the signal that a cost has been realized. They merely serve as prime facie evidence, however, that specific criteria have been met. It can be seen that the judgment of the accountant plays an important part in all these criteria. He must reach conclusions in each case as to the degree of permanence and objectivity present. His decision, one way or the other, will determine whether or not a particular item is to be considered realized.

Reviews the book "Statistical Cost Analysis," by Johnston J.

Abstract In selecting a measure of activity to be used in applying manufacturing burden to product, a typical cost accounting text includes a few brief remarks about direct labor hours, direct labor cost, machine hours, and units of product. The fact that machinery is the main factor in production does not necessarily mean that machine hours is a measure of activity which provides more accurate costing than does direct labor hours. Cost accounting texts, in their discussion of machine hours versus direct labor hours, frequently seem to avoid the real issues. Very often, unless the instructor amplifies the textbook statements considerably, it is likely that the student will not get a satisfactory answer to the basic question. One of the issues which has not received its fair share of attention is the general superiority for product costing purposes of rates established by machine cost centers which include only homogeneous equipment over a single rate established for a department which includes heterogeneous equipment. It has been argued that machine hours is a better basis than direct labor hours under the following conditions, the process is a relatively continuous one; and cost responsibility centers include heterogeneous equipment and burden rates are established by cost responsibility centers.