This paper estimates a model of the United Kingdom's monetary sector comprising supply and demand functions for various types of monetary assets including currency, bank reserves, demand deposits, time deposits, and total deposits. The model is closed by a simple distributed lag version of the quantity theory of money. Since the matrix of endogenous variables turns out to be triangular, the model is superficially recursive and thus OLS may be a consistent, FIML estimator of the system. In case the other conditions for recursiveness are not met and the system is genuinely interdependent, TSLS estimates are also presented. Various interest rates and income elasticities are calculated. They conform broadly with previous single equation estimates of their magnitude.

Harsanyi [1], after translating Zeuthen's bargaining theory [5, Ch. 4] into modern utility terms, has shown that it implies the same outcome as Nash's theory [4], namely a settlement that maximizes the product of the utility increments of the two parties. In the same paper, Harsanyi also reviewed Hicks's comparable theory [2, pp. 140-45] and found it, understandably, distinctly inferior to Zeuthen's. The context that both Zeuthen and Hicks had in mind was labor-management bargaining, where agreements and conflicts have time dimensions. Specifically in such situations, it will be suggested, it is possible to combine the central conceptions of both Zeuthen and Hicks in a composite theory that is superior to either of the separate ones. To prepare the way for the composite theory's presentation, its components will be briefly summarized.

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics and Social Science, 1962.

The Strotz-Wold Reply, however, penetrates to the heart of the issue, almost, and it will probably be illuminating to make a rejoinder. To begin with I should like to say that they are justified in taking exception to the unfortunate wording of the headnote. Though, when applied to the sequence of recipes given out by Wold, my remarks do not lack for verisimilitude, they are certainly not true to the letter of the Strotz-Wold article, and I should have taken pains not to convey the impression that I thought they were.2 Accepting their just remonstrance, I turn to the text of my article. The main contention of my paper was that the classical scientific notion of causality (not, however, the doctrine of cause and effect) 3 is adequate to rationalize the construction of non-triangular or interdependent mechanical models in economics; that employment of the classical notion in the case of non-triangular systems neither leads to paradox nor calls for novel categories of causality, e.g., circular causality, bi-causality, vector causality,