Knowledge that Transforms

Journal Article Monetary Policy in an Inside-Money, Open Economy: Comment Get access Basant K. Kapur Basant K. Kapur National University of Singapore Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 96, Issue 2, May 1981, Pages 349–356, https://doi.org/10.2307/1882395 Published: 01 May 1981

Journal Article Monetary Policy in an Inside-Money, Open Economy: Reply Get access Donald J. Mathieson Donald J. Mathieson International Monetary Fund Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 96, Issue 2, May 1981, Pages 357–361, https://doi.org/10.2307/1882396 Published: 01 May 1981

Journal Article Statistical cost Analysis Re-Revisited: Reply Get access James M. Griffin James M. Griffin University of Houston Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 96, Issue 1, February 1981, Pages 183–187, https://doi.org/10.2307/2936150 Published: 01 February 1981

In a recent article A. Y. C. Koo [1973] sought to advance a “more general theory of land tenancy” and draw implications for land reform. While his contention that different models of share-tenancy (with conflicting efficiency properties) have different implications for land reform is correct, unfortunately, his mathematical analysis of oligopoly land market is both misleading and erroneous. It is misleading in the sense that it is not (as a close look at the model would verify) an oligopoly model of share-rental determination, which it purports to be. Thus, on this account, it is not really a critique of either Bardhan and Srinivasan [1971] or of Cheung [1974], which it claims to be.1 Rather it is an oligopoly model of determination of fixed-rental in the landlease market. If so, it loses much of its importance, at least empirically, since the fixed-rental system is of limited empirical significance. And the efficiency arguments for and against the share-rental lease, which he advances in the beginning, and also the land-reform question of reducing the share-rental become irrelevant for the analysis that follows. Second, even if we consider his mathematical argument on land renting on its own grounds, it is unfortunately marred by a mathematical flaw that prevails throughout his analysis and leads him to counterintuitive results. Section I gives a restatement of the Koo model and points to its errors and the resulting counterintuitive results. Section II reformulates the model in correct terms and shows how intuitively and empirically plausible results may be derived therefrom.

The paper argues that appropriate domestic policies — more particularly, the real wage policy that is stressed here — can reduce the extent of foreign dependence of a country. It shows that foreign aid sufficient to achieve a given level of per capita domestic income is positively related to the real wages in an LDC with unemployment. The paper also links the level of real wages and the rate of technical change to the possibilities for self-sufficiency (from foreign aid) in the long run.

Linear expenditure systems are widely used to describe consumption and portfolio decisions. However, the complexity of these models makes estimation a formidable task. In earlier work, an exchangeability assumption was used to incorporate subjective a priori information into the estimation of asset demand equations. Here, an alternative hierarchical approach is described and illustrated. This procedure provides a framework in which the identification of a limited number of distinct reasons for prior uncertainty can be converted into a full prior covariance matrix. Such a matrix can then be combined with prior means and the sample data to yield Bayesian parameter estimates.

Recent interest in trade union activity has led to the development of econometric models of union membership growth. This paper examines the structural stability of two of the leading models—Ashenfelter-Pencavel's and Bain-Elsheikh's—each of which claimed to have captured the primary determinants of union growth in the twentieth century. The models were reestimated using revised, corrected, and extended membership data, and a nonlinear, maximum-likelihood procedure was employed to estimate the shift-point for each model. Contrary to previous studies, we found evidence of a break in the structure of each model. And unlike earlier work that hypothesized a World War II break-point, our estimated point was 1937–1938, most likely reflecting the impact of the Wagner Act.