Knowledge that Transforms

and seller concentration is not evidence of countervailing power but merely the result of spurious correlation induced by own industry purchases. When they test this proposition by regressing BCR on SCR, and including dummy variables to account for own industry purchases, the regression coefficient of SCR remains positive and statistically significant at the 0.05 level for 4 and 8 firm CR's. The positive relation becomes insignificant only when the definition of own industry purchases is expanded to include any sales in the same two-digit group. Their justification for a wider definition is that four-digit industries in the same two-digit group use similar technologies and therefore have similar degrees of economies of scale, so that the observed correlation is induced by natural forces rather than by countervailing power. The similarity of economies of scale is asserted, but no supporting evidence is offered. In fact, two-digit groups are rather broad and, for intermediate production, generally contain successive stages of production of a class of finished products. A look at the cases where the top four or eight purchasers are ifl the producing industry's own twodigit group will raise doubts about whether these represent similar, technologies. For BCR4, there were ten cases where the top ranked consuming industry was in the same two-digit group as the producing industry.4 They included the following pairs of four-digit industries: Yarn Mills and Broadwoven Fabrics, Processed Textile Waste and Upholstery, Knit Fabric Mills and Apparel Made from Purchased Materials, Logging Camps and Saw Mills, Pulp Mills and Paper Mills, Paper Mills and Sanitary Paper Products, Primary Aluminum and Aluminum Rolling and Drawing, Secondary NonFerrous Metals and Primary Aluminum, Industrial Controls and Switch Gear. It is doubtful that similar degrees of concentration in these pairs are primarily the result of similar economies of scale in production and not induced by attempts to attain countervailing power.

Armando J. Baqueiro, James J. Breen, David E. Mead, Donald E. Wise, The Labor Force Decision of Married Female Teachers: A Comment, The Review of Economics and Statistics, Vol. 58, No. 2 (May, 1976), pp. 241-244

children indicate that women with older children tend to be in the full-time group. The negative coefficients for the ages of the second and fourth children themselves imply that individuals with high values for these variables are least likely to be classified as full-time workers. The interactions between the children or the non-linearity of the relation between ages and the labor supply behavior of the wife probably account for the alternating signs.9

A great deal of research has been done in recent years on the effects of capital inflows on real investment, saving and output growth in developing countries.' It appears that in many instances these inflows have, in effect, been used for financing an expansion of consumption rather than investment. This note attempts to reinterpret the new research in the broader context of intertemporal resource allocation and intertemporal consumption opportunities. The acceptance of foreign capital, of course, augments the total amount of resources potentially available for current domestic real expenditure (consumption and investment). The invested portion of the foreign capital receipts adds to future potential net domestic product, but part of the domestic product increase may be absorbed by the associated debt service, income remittances and capital repatriations. If the domestic rate of return exceeds the cost of foreign capital, any one of the following three types of capital inflow response is possible: 1) both current and future consumption increases; 2) current consumption increases, while future consumption decreases, or 3) current consumption decreases, while future consumption increases. Crude empirical estimates of the true responses, based on the new research, are now possible.

T HIS paper utilizes cross spectral analysis to examine the relationship between consumer price movements in the United States and Canada. We hope to shed light on the extent of the of the cost of living in Canada on that of the United States. Although a number of very competent studies have been undertaken which deal with the nature of economic interdependence between the two countries (among others, see Brecher and Reisman, 1957; Bryce, 1939; Chambers, 1958; Gibson, 1956; Rosenbluth, 1957; and Wonnacott, 1961), specific questions of timing and amplitude characteristics of consumer price series over cycles of varying length have yet to be fully explored. A recent article by Bonomo and Tanner applied spectral analysis to industrial production series for the two countries and found statistically significant relations between American and Canadian economic cycles of lengths between 3 and 100 months (1972, p. 7.). Following Wonnacott's observations that production and price indices may very well be viewed as alternative indicators of dependence (1961, p. 6), we propose to test for the existence of significant relationships in U.S. and Canadian prices to further explore the nature of the hypothesized Canadian dependence on the United States. In section II, we discuss some considerations involved in the use of spectral analysis. Section III reviews the empirical findings, and section IV contains our conclusions. II. A Brief Overview of Spectral Analysis