Knowledge that Transforms

The purpose of a foreign exchange guarantee is not to discourage countries which should devalue from devaluing but to allow monetary authorities to cooperate freely and fully in reducing international monetary instability and to prevent devaluations from taking place which would not take place if adequate cooperative arrangements were available. In this context, it is revealing that the overwhelming majority of agreements concerning international monetary cooperation in the postwar world have contained exchange guarantees.15 Until some radical reforms, are introduced into the international monetary system, the stability of the system will, in large measure, depend on cooperation between the monetary authorities of the leading financial countries. One of the obstacles that has been encountered in this cooperation is the unwillingness of the various monetary authorities to accumulate large amounts of foreign exchange without some sort of exchange guarantee. I do not say the absence of an exchange guarantee is the only obstacle, but it has been, and is, one of the serious obstacles. An exchange guarantee is not a panacea for the world's monetary ills, however, it can make a valuable contribution toward international monetary stability.16

Murray Brown, Joel Popkin, "Reply" to R. G. Gregory, "A Measure of Technological Change and Returns to Scale: A Comment", The Review of Economics and Statistics, Vol. 47, No. 4 (Nov., 1965), pp. 454-457

sion equation presented in the note, in which x appears as an independent variable. Therefore, the high correlation between migration and prospective unemployment may be misleading. It may be, in effect, merely a correlation of the dependent variable with itself. On the basis of the foregoing, it would appear that the problem of establishing a strong link between migration and job opportunities may not really have been solved by introducing the new concept of unemployment. Nevertheless, Dr. Blanco's ingenious approach to the problem will be of considerable interest to anyone concerned with the determinants of population movements.

T HE importance of retained earnings as a source of funds for financing corporate growth has been widely recognized. Also well recognized is the considerable short-run variability of corporate saving. Accordingly, there have been a number of studies of the policies and behavior of corporations with respect to income retention. Most of these (1) have been concerned with large corporations and (2) have relied upon aggregative time-series data and/or cross-sectional data.' This study is concerned

T HE recent emphasis on the plight of lowincome groups necessitates an examination of how these groups have fared in economic progress compared to higher income groups. The pattern of inequality within higher income classes is relevant to the relative poverty of lowincome groups. A detailed examination of inequality within specified groups is made in this paper. The inconsistency of the pattern facing those in the lower portion of the distribution in the postwar period is emphasized.

ONE of the principal inputs in the process of producing higher education is past higher education. In order to turn out individuals with university degrees, it is necessary that some of the past recipients of such degrees shall have chosen to join university faculties. The recognition that university graduates are the output of higher education, that faculties are the capital stock, and that the hiring of recent graduates to faculties is the investment process, permits the future growth of higher education in the United States to be analyzed within a Harrod growth framework. Although other concepts are needed even at a high level of abstraction, the capital-output ratio (i.e., the faculty-student ratio) and the investment-output ratio (i.e., the ratio of increments of higher education faculties to past recipients of degrees), are central to this analysis of higher education. The essential difference between this paper and typical growth models is that output in higher education is here treated as a parameter rather than a variable. It is possible that the pressures of rapidly increasing applications to institutions of higher education might result largely in increasing rejections, but the more likely course is the expansion of existing universities and the establishment of new ones.' The purpose of this paper is to show the kinds of pressure and the extent of the pressure which may appear in American higher education as a result of various plausible enrollment rates between now and 1980.2 In the growth model of this paper and the forecasts that result from it will be seen the tremendous strain which the next decade will probably place upon American universities and colleges. What is interesting is not, of course, the existence of this strain long ago realized by educators but the measures of its depth and duration. If the faculty investment rate is not increased, faculty-student ratios will very probably fall by 23% (from .089 to .069) between 1957-1958 and 1967-1968. But the very process of producing this vastly increased amount of higher education produces a greatly increased potential later rise of faculties. After 1967-1968, again if the faculty investment rate remains unchanged, faculty-student ratios will begin to rise almost as dramatically as they fell and will re-attain levels above .08 by 19791980. The strain on faculties during the 1960's tends automatically to reduce this strain in the 1970's and possibly to produce slack thereafter. If faculty salaries adjust to prevent, at least partially, these strains and slacks, faculty pay may nearly double during the next two decades, but the rise will not be smooth. Salaries may rise by 7 % per annum during the 1960's but only by 1% per annum in the 1970's. The financial future of those who profess in higher education may be neither so stable nor so bright as is commonly believed.