Knowledge that Transforms

It is commonly accepted that Pareto's law holds well for the middle range of income distribution but not for smaller and larger income classes. Although it is comparatively easy to analyze the larger incomes statistically, the econometric approach is essential for analyzing the distribution of smaller incomes. Data are presented for income distribution in 108 of the 274 communes (villages, towns, and cities) in Hokkaido, Japan, including data for the smaller incomes below the tax limit. Using these data and Pareto's curve, the author attempts to estimate income distribution as a whole in Japan. The extreme positive skewness of the income distribution is noted, and appropriate methods of curve fitting are explored.

The problem to be discussed is the determination of the rate of interest in a closed economy, working under laisser faire in the sense that the authorities use no means to influence conditions except monetary policy.

A study of the efficient allocation problem in production by the evaluation of the merits of private or corporate enterprise versus a centrally directed economy. Presented before a joint meeting of the American Statistical Association, the American Economic Association, and the Econometric Society in New York City, December 29, 1949.