Knowledge that Transforms

3. While he discusses it in general terms, Mr. Flick fails to present the proposed reformulation of my approach in concise mathematical terms. Hence I find it impossible to determine to what extent it involves simply introduction of a different terminology rather than a substantively different argument. He introduces the new concept of Pollution Services. If this is done with the intention to present new factual information, effect on the material conclusion reached at the end of the argument to be nil. But even if the additional information thus conveyed is intended to be utilized not in this, but in some other context, I would be inclined to question the appropriateness and the intuitive appeal of this particular concept: while air may be viewed industries of by-products, to what substance would Mr. Flick ascribe the function of relieving the airports of the unwanted byproduct consisting of noise generated by landing and departing aircraft? The quantitative approach to the analysis of environmental repercussion within the framework of generalized input-output analysis outlined by me can and certainly will be superseded by more effective formulations; Mr. Flick's critical remarks and positive proposals do not seem however to point in the right direction. presented in my paper entitled Material Income, Economic Structure, and Environmental Externalities, in Measurement of Economic and Social Performance, edited by Milton Moss, National Bureau of Economic Research Press, New York (forthcoming 1974).

CONOMISTS have begun to question the efficiency and equity of the formal educational system as an institution for accumulating capital and determining the distribution of labor income.1 This paper will focus on a particular form of labor market imperfection which is related to the trend towards ever increasing amounts of schooling for more people. The imperfection consists of employment discrimination based on formal education, henceforth called screening. Screening is defined formally in the following way.2

IN Ramsey (1972) the author discussed the conditions under which limiting approximations to own price demand curves can be obtained. The objective to be pursued in this paper is to test with budget data some of the specific hypotheses generated in the previous paper. The results to be presented are to be regarded only as initial efforts. Their main function is to indicate whether the hypothesized models can meet some fairly weak tests and to indicate the nature of some of the practical problems to be faced in testing such hypotheses.

of the two major specifications of the Phillips curve supports the view of the expectations approach to the theory of inflation. In both specifications of the Phillips curve, evidence of a distributed lag between the variables was uncovered. Of particular interest are the findings that (1) unemployment lags wage changes and the lag is distributed, (2) wages lag prices, and (3) the level of profits are only weakly related to the rate of change in money wages.

V IRTUALLY every textbook on international trade contains a discussion and/or derivation of the optimum tariff for a country with monopoly power in world trade. Invariably these are treatments of aggregate tariff policy. Little or no work has been done to explain the infra-structure of tariffs within a given country or to explain in what respects tariffs might be expected to be similar across countries. Some papers have explored the impact of tariffs and tariff changes on domestic welfare, labor's share of income and trade prospects for developing countries. Contributions to this literature include Anderson (1972), Balassa (1965, 1967a, 1967b, 1971); Ball (1967); Basevi (1966, 1968); Cohen and Sisler (1971); Kreinen (1961, 1967); Mitchell (1970); Travis (1968) and many others. Yet, none of these studies has offered a well specified analytical framework that would permit a systematic investigation of testable hypotheses concerning the relative protection of industries: within and across countries. Instead, many of these papers have relied upon intuitive but ad hoc explanations of the data they presented. The purpose of this paper is two-fold. First, we will begin a systematic inquiry into the determinants of tariff policy at the industry level by developing a simple model based upon profit maximizing behavior in section II. Secondly, we will use the derivations of section II, along with data from previous studies by Balassa (1965, 1971) to demonstrate that a number of the ad hoc explanations of tariff data by previous authors are consistent with our simple .model. In addition, we will develop and test new hypotheses based on the analytical developments of section II. For example, we will be able to explain the pyramiding of tariffs in developed and less developed countries, the pattern of the rank correlations between effective protective rates for countries at similar and different levels of economic development, the greater variation in tariffs on primary products than on manufactured goods in developing countries, the greater variation and average value of tariffs on manufactured goods in developing countries and, finally, the relationship between the skill intensity of production and tariff protection in manufacturing in both developed and developing countries. Perhaps, most important of all our results is the fact that, by demonstrating that ad hoc explanations of previous studies are consistent with our explicit formulation of tariff determination at the industry level, we facilitate the development of future advances in this area.

Several years ago, one of us presented a model of the market for physicians' services (Feldstein, 1970). In a subsequent comment, Brown and Lapan ( 1972) raised several questions about the model and the conclusions. Unfortunately, this comment and the reply by Feldstein ( 1972) left a number of issues unsettled. Some of the disagreement was based on misunderstanding and on drawing infer ences from different theoretical models. After the publication of the comment and reply, we continued to pursue the basis of our disagreements. The cur rent note is an attempt to clarify the issues that were raised but not resolved in the previous ex change.

Raymond E. Lombra, Raymond G. Torto, Measuring the Impact of Monetary and Fiscal Actions: A New Look at the Specification Problem, The Review of Economics and Statistics, Vol. 56, No. 1 (Feb., 1974), pp. 104-107

Lean management and transaction management offer complementary perspectives on cost reduction to the business organization.Lean management focuses on preventing waste in production and is drawn from the business practice.The focus of transaction management is a reduction of transaction costs in the internal and external organization of the firm.The emphasis is on value creation on the long run.Transaction management is based on the theories of transaction cost economics and the new institutional economics.From these theoretical perspectives, with tree Nobel prize winners as originators (Coase, North and Williamson), it may contribute to the strategic management of the firm.