Journal Article Hicks and Hollander on Ricardo: A Mathematical Note Get access Kenneth Gordon Kenneth Gordon University of Alberta Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 98, Issue 4, November 1983, Pages 721–726, https://doi.org/10.2307/1881787 Published: 01 November 1983
John E. Elliott's [19801 article on some of the parallels between the visions of capitalist transformation to be found in Marx and Schumpeter is extremely significant insofar as it requires a serious reexamination of the Schumpeterian system. Elliott's argument, however, is somewhat misleading, since it overemphasizes the points at which their theories overlap, while largely neglecting the very crucial differences in "intentions and results " [Schumpeter, 1951, pp. 158-61]. It is nearly always a vain endeavor to attempt to analyze the often complex interconnections between economic theorists, while adopting the simple framework of an either-or of similarities and differences. The inadequacy of such a method is particularly evident in a case where the theorists being considered are each deservedly famous for their "dialectical imagination." In my view, most of Elliott's observations are reasonably accu-rate, though limited and misleading. However, in one crucial respect
Journal Article Estimating the Economic Model of Crime: Reply Get access Ann Dryden Witte Ann Dryden Witte University of North Carolina, Chapel Hill Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 98, Issue 1, February 1983, Pages 167–175, https://doi.org/10.2307/1885573 Published: 01 February 1983
This paper models a typical highly inflationary less developed economy, in which monetary forces are the result of three policy determinants: the rate of monetary expansion (µ), the interest rate on bank deposits (d), and the rate of depreciation of the real exchange rate (υ). The task confronting policy-makers is to reduce the equilibrium inflation rate without undue transitional sacrifice of the growth objective. We demonstrate that this optimally requires the precise coordination of all three instruments, with high but declining values of d and µ being adopted initially, and with υ being modulated so as to forestall excessive capital inflows and to influence favorably the evolution of relative input prices.
This paper takes the view that a project is a disturbance to an economy in equilibrium, and examines the shadow prices for project evaluation under alternative assumptions about how equilibrium is restored. When the government reacts by altering its foreign exchange reserves—a nondistortionary adjustment mechanism—the shadow prices coincide with those advocated in the manuals on social cost-benefit analysis. However, if the government adjusts its domestic expenditures or tariff rates, the shadow prices will differ from those of the manuals, except insofar as the relative shadow prices of tradeables remain their relative border prices.
Earlier models of innovation under oligopolistic rivalry are modified to include a “share parameter” σ, describing the manner in which profits are divided among rivals when one firm is successful in its search for a valuable resource stock. There is a unique value of σ that maximizes expected industry profits, by “guiding” noncooperative oligopolists to choose the profit-maximizing exploration rate. Moreover, setting σ at this maximizing value—which always allocates some share of industry profits to the “losers” in the exploration race—leads to an exploration rate identical to what would be chosen by a jointly managed cartel.
Regulations prohibiting the payment of explicit interest on demand deposits are gradually being eased. As banks switch from payment in the form of free services to explicit interest, both the level of money demand and the response of money demand to market interest rates will change. Banks are modeled here as being Chamberlinian monopolistic competitors. Equilibrium deposit interest rate relationships are found for markets both with and without an effective interest rate ceiling and the behavior of the two markets is compared. The elimination of deposit interest rate ceilings leads to increased money demand and an increased responsiveness of deposit rates to market interest rates.
In estimating the economic effects of public policy, comparative static models typically assume homogenous factors that are either mobile or immobile. For changes designed to improve factor allocations, the former assumption would overstate welfare gains, while the latter would understate them. The model in this paper restricts each industry's capital reduction to its rate of depreciation. The stock of depreciated capital represents an industry-specific type of capital that may earn a lower equilibrium return. This model suggests that previous estimates of efficiency gains from integration of U. S. personal and corporate income taxes are overstated by $5 billion.
The paper analyzes the problems that arise in estimating the efficiency loss from misallocation of resources in Soviet industry, as revealed by the inequality of marginal rates of substitution among factors in the eight branches of Soviet industry. Econometric estimates of production functions in these branches are utilized to reach estimates of the loss arising from interbranch misallocation of capital and labor deployed in Soviet industry. This loss appears to be nonnegligible, ranging from a low of about 3 to 4 percent to a high of 10 percent of efficient factor use, and to be rising over time. Thus, an added reason for the current deceleration in Soviet industrial (and overall) growth is suggested.