THE object of this paper is to consider, from a theoretical point of view, the price development in a wartime economy with price control short of a general price ceiling. If there is an absolutely complete and universal price ceiling, changes in prices are automatically ruled out. But in hardly any war economy are price increases so completely absent as to make superfluous a study of the development of prices and the factors affecting this development. In no modern war economy, on the other hand, are prices so free to move as to make an equilibrium analysis, based on a continuous and immediate adjustment of supply and demand through changes in prices, a fully adequate approximation of actual developments. A highly instructive model of the behavior of prices in a free-price economy under the stimulus of wartime inflation has been developed by Dr. Koopmans.' Such a model can be considered only as a limiting case which actual developments would approach if there were no control over prices. The present paper starts from the reverse point of view, though it is realized that such treatment assumes great strength in the price control mechanism if it is operating as it is likely to be in a milieu of greatly excessive demand. Price formation will be studied from the supply rather than from the demand side. Wage increases, for instance, will be considered as a price raising factor because they raise costs, not because they swell the public's purchasing power. There seems to be some justification in taking this extreme point of view. Excessive purchasing power does not in itself exercise a price-raising influence. Taxation and compulsory savings may take away a large part of this purchasing power, and the rest may be absorbed by various kinds of voluntary savings. Or, if consumers are left with the money, it may be directed away from the scarce commodities, and thus be prevented from exercising a priceraising influence, by an extensive rationing system. Or finally, if the stream of money is neither absorbed by the government nor canalized into safe regions by rationing, it may simply beat, but not break, the dams erected by the pricecontrolling authorities, in which case excessive demand will result in shop shortages, not in rising prices. In fact, with a high rate of excess profits taxation, entrepreneurs have little stimulus to raise their prices to the point of equilibrium unless costs go up.2

The subject of this paper is the solution of a typical economic equation system. The system has the following properties: (1) Goods are produced not only from “ natural factors of production, ” but in the first place from each other. These processes of production may be circular, i.e. good G1 is produced with the aid of good G2, and G2 with the aid of G1. (2) There may be more technically possible processes of production than goods and for this reason “ counting of equations ” is of no avail. The problem is rather to establish which processes will actually be used and which not (being “ unprofitable”).

Introduction: scope and plan, 427. — I. Oost estimates for the present old-age and survivors insurance program without change: provisions of the program, 429; the high and low assumptions, 430; the estimates, 431. — II. Cost estimates for the old-age and survivors insurance program with assumed changes: the changes considered, 436; change in lump-sum benefit payments, 437; in benefit payments to parents, 438; in minimum monthly benefit limitation, 439; in maximum monthly benefit limitation, 440; in age of eligibility for women, 442; provision of disability benefits, 442; extension of coverage, 443. — Summary of estimates, 450. — Conclusion, 450.

Journal Article The Equilibrium of the Firm in Multi-Process Industries Get access Wilford J. Eiteman Wilford J. Eiteman Duke University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 59, Issue 2, February 1945, Pages 280–286, https://doi.org/10.2307/1884828 Published: 01 February 1945

Journal Article Interest-Free Deficit Financing: Rejoinder Get access J. Carl Poindexter J. Carl Poindexter Roanoke College Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 60, Issue 1, November 1945, Pages 154–165, https://doi.org/10.2307/1880647 Published: 01 November 1945

Journal Article The Generalised Theory of Consumer's Surplus Get access J. R. Hicks J. R. Hicks Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 13, Issue 2, 1945, Pages 68–74, https://doi.org/10.2307/2296037 Published: 01 September 1945

The writer has no quarrel with cost accountants and their methods, nor is it implied that cost figures, because of their imperfections, are hopelessly useless. By and large, the cost accountant performs well a function that is essential to carrying on accounting in general and basic to the furtherance of intelligent management. There are, however, three general conclusions that may be drawn from the exposition presented in the article; these should be emphasized. First, there is a real need for research directed toward the establishment of principles for cost allocation, especially with regard to the allocation of overhead costs. Second, there is good reason for broadening the concepts that have been applied to the field of cost accounting, to embrace techniques of statistical and mathematical analysis. Third, and most important, the limitations of available methods, the compromises of expediency, and the conflicting objectives that enter into cost calculations should make the accountant more careful as to his terminology with respect to unit costs.

According to the author accounting profession would be strengthened and the public interest would be better served, if all persons who present themselves as practitioners of public accountancy would be required by law, first to demonstrate their professional abilities and then to act in accordance with recognized standards of practice. Accountancy is not an exact science. There are no set rules or formulae, which can be used as a guide by the untrained. It follows, then, that the public accepts the practitioner pf public accountancy in good faith as one properly qualified to render a specialized service, important to the welfare of business and, consequently to the general public. The present generation should accept this, even though it means that they will encounter the many difficulties concomitant with such a drastic change as the regulation of practice through restrictive legislation. They should work and strive with all the ability they possess and the strength of character, which has been built into their profession to bequeath to the certified public accountants of the future the gracious heritage of a unified profession.

The article presents information on the role of the public accountant in contract termination. The settlement of terminated contracts involves many problems other than accounting, such as the physical handling and disposal of inventories and equipment. However, there can be no lack of emphasis on the accounting phases of such settlements. The Contract Settlement Act of 1944 has as its purpose the standardization and so far as possible, the simplification of procedures in arriving at such settlements. Although the Act provides for settlement by agreement or negotiation, a careful reading will indicate that accounting is generally considered essential to such settlements. The basis of a settlement by agreement is the contractor's proposal for settlement, which must be prepared and submitted to the proper governmental agency. It should be apparent that such proposal must be based upon a reasonable accounting foundation in order to negotiate a settlement an any basis other than a purely arbitrary one. Provisions of the Contract Settlement Act of 1944, imposing severe penalties in case of fraud or misrepresentation in the settlement proposal, make reliable accounting data equally important for the contractor's own protection.