Journal Article Savings in a State with a Stationary Population: Comment Get access H. W. Arndt H. W. Arndt University of Sydney Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 62, Issue 4, August 1948, Pages 623–628, https://doi.org/10.2307/1881770 Published: 01 August 1948

LORD KEYNES died just ten years after publication of his great book, at very peak of his professional and public career. Both his death, and simultaneous conclusion of first Keynesian decade, make preparation of two volumes, here reviewed,' timely and a fitting tribute. No one man in history of economics had so great an effect upon minds and daily lives of so many people in so short a time as did Keynes. Although students have disagreed to a remarkable extent about which one of several possibilities is the crucial feature of Keynesian Revolution, and although Keynes operated in only certain fields of economics, reality of revolution itself is beyond discussion'. Both science and art of economics, at least within capitalist societies, have been permanently changed and one can only say enormously advanced by his work. With respect to major analytical concepts which Keynes developed or reformulated, it is almost as pointless to talk today of pro-Keynesians and anti-Keynesians as to say that particular individuals are for or against multiplication table. The shapes and values to be assigned to particular relations, such as that of consumption to income; particular analytical conclusions drawn, such as that concerning underemployment equilibrium; and above all resulting policy proposals, such as those concerning government deficit spending these are another matter, and have precipitated tremendous amounts of discussion. But very discussions themselves have been largely couched in Keynes' own terms, have been centered around his particular conceptions and formulations of problems in issue, and in their whole character have differed in remarkable degree from those of preceding periods. Dr. Klein's book is in main a restatement and defense of Keynes' ideas, done with almost religious enthusiasm but nonetheless on a high level of scholarship. I have already tried parts of it in a graduate class, and found it extremely useful. It covers, if not always systematically, whole range of Keynes' ideas on monetary and general economic analysis from his earliest writings, and touches on much of relevant work of others. Perhaps most illuminating sections are chapter on Keynes as a classical economist, especially sections on Treatise; summary of argument of General Theory; and technical Appendix. The first of these undertakes, and with great success, to build a continuous bridge of ideas from older forms of monetary theory to equations of Treatise, to explain each stage in terms of what had gone before, and to lead into foundations of General Theory. The Treatise equations are described as pretentious, and Hansen's criticism is of course admitted, but, it is argued (I think correctly) that they are not essential contribution of Treatise, and that their defects do not impair determinacy of prices in system which was here Keynes' main goal (pp. I 7, 24, and Appendix). The Appendix is especially interesting for its examination of Pigou's attempt to rehabilitate classical doctrine, at least for problems of long-run equilibrium. The other chapters consist in main of a relatively brief but excellent re-presentation of essential analytical argument of General Theory, largely as systematized and expanded by Keynes' followers (little is said of confusions and contradictions of General Theory itself!), and a series of reviews of certain of main controversies. Despite Dr. Klein's almost excessive zeal in defending Keynes at some points (cf. p. I 54), and despite a certain lack of integration and order (surely Chapter V is misplaced?), book is an important addition to literature because, though hardly exhaustive, it brings much of analytical content of Keynesian discussions together in a compact ' Seymour E. Harris, editor, The New Economics (New York, I947); Lawrence R. Klein, The Keynesian Revolution (New York, I947).

( OMPARATIVELY little is known of the a'.4 degree to which income concentration has changed in the United States, either secularly, or from prosperity to depression.2 Even less is known of how these shifts are related to variations in the proportion of income arising from property ownership or from personal exertion, or to other economic movements less directly related to income distribution. A knowledge of the mechanics of income distribution is of obvious importance for all policy-making purposes, but as yet we are unable to describe adequately the processes which have made our distribution what it has been in the past, and much less able to predict the future. Aside from the Census samples for I944, I945, and I946 and the Federal Reserve studies for I946, I947, and I948, Statistics of Income, tabulated as a by-product of income tax reporting, is the only source giving distributions of income by size for successive years or periods on a national basis. As is well-known, however, separate reporting by husbands and wives makes it difficult or impossible to interpret taxable incomes in terms of income of families. Furthermore, taxpayers' incomes lie in the upper range of the entire income distribution. Despite these limitations, Statistics of Income has been used as the source for the following analysis, which attempts to relate shifts in the magnitude or size distribution of the principal components of income to changes in the concentration of the total in several selected years. A number of studies of the income tax data have been made by various analysts for the purpose of inferring changes in the entire income distribution from that of the upper income groups. These studies have assumed that an increase in equality among the wealthy is symptomatic of a general movement toward greater equality.3 This will not be true, however, if the decrease (or increase) in concentration of incomes among the upper income groups arises from a general shift in money incomes accompanied by a change in the numbers having incomes above any given money level. An income level which in one year may indicate the lower limit for the top one-half of the income recipients may in another (lower) income year show the lower limit for the top one-third. In I933, for example, 332,000 income reclpients reported net incomes of $s,ooo or over, while the same number of recipients, cumulating from the top down, had incomes in excess of $II,ooo in I929 and in I942. A shift in the concentration of income lying above any given money level from year to year consequently carries no implication as to the direction of change in the entire income distribution. The conclusion is simply being drawn for a different segment of the distribution. The following analysis departs from usual practice by constructing distributions for groups whose income comprises a given top fraction namely, the top I2 per cent of the national income, rather than for groups whose income lies above a given level. This does not imply that the distribution for the top I2 per cent is typical for the whole range of incomes; however, the method described may be applied to the entire range when more data are available. Twelve per cent of income recipients represents the largest fraction which could be shown for the years selected (I929, I933, I940,

BEGINNING about the year I500, Europe ?) underwent what is now known as the price revolution, a secular upward movement of prices that is often ascribed to the influence of imports of precious metals from the New World. In many parts of the world similar movements can be observed today. While their causes are different and their incidence is more limited in scope, the current movements are sufficiently persistent and intensive to warrant comparison with the price revolution. Considerable attention has been paid to the inflations that various writers have observed in a number of Latin American countries. It seems, however, that the secular character of the phenomenon is not fully appreciated. The example of Brazil is outstanding in this respect and will be discussed in this paper. While similar trends may prevail in other Latin American countries, much specialized research will be necessary to obtain long-term series of prices and other relevant data. The work of the International Scientific Committee on Price History, which includes a number of remarkable studies on the movement of prices in European countries, deserves to be extended to cover price history in the Americas. The denomination of the currency in Brazil is apt to illustrate the price experience in that country. At one time, the real was the unit of money. Although it depreciated during the colonial period, the deterioration of its value apparently became pronounced only in the nineteenth century.2 The real fell into disuse as a result of this and was gradually replaced by a new unit, mil-redis, which contains one thousand units of the old currency. At present one milreis is worth five United States cents, and the value of one real, one thousandth of five United States cents, is too low to have any meaning. In I942 the cruzeiro was introduced as the monetary unit. It is equal to one mil-reis, but is, unl k the latter, subdivided only into one hundred smaller units, called centavos. As one centavo is worth only the hundredth part of five United States cents, the commercial relevance of this unit was all but nil even at the time of its creation. The smallest unit of practical significance is ten centavos, one-half of a United States cent. Depreciations of these magnitudes may seem small compared with the great German inflation and similar events which attended the close of the First and Second World Wars. But it must be considered that these were concentrated within a few years, while the Brazilian experience extends over more than a century. Thus the economic and social impacts of both types of phenomena are quite different. A violent inflation of short duration, followed by stabilization, is of the nature of a revolutionary upheaval that for the time being disturbs the balance of society. During the ensuing period of stability, however, tendencies are allowed to operate which might make for a return to the earlier position of social equilibrium. A middle class destroyed by a violent inflation of short duration may be revived under subsequent conditions of stability. In countries, however, where prices move upward almost continually, the formation of a strong middle class is prevented. It is perhaps for this reason that the view has been stated that neither capitalism itself nor the social institutions associated with it, democracy among them, can work efficiently and with comparative smoothness except on a falling trend in prices. 3 The relevant data for Brazil are shown in Table i. They indicate that from I840 to I940 prices increased thirteen-fold, and from I840 to I945, 28-fold. During the same period, the value of the leading foreign currency increased eight to ten times. The economic development of the country is reflected in the much more 'The research required for the preparation of this paper was facilitated by a Guggenheim Fellowship. 2 See Roberto C. Simonsen, Histo'ria Econo'mica do Brasil, 15oo-1820 (second edition, Sao Paulo, I944), Vol. I, p. I07. 3 Joseph A. Schumpeter, Business Cycles, Vol. 2 (New York, I939), pp. 465 ff.

Abstract The article presents the use of slides in accounting instructions. During 1937 Accounting Department at the Ohio State University, purchased a 3X4 slide projector. Most of the slides consisted of solutions to problems and were used in classes which could be scheduled to meet in the room equipped for projection. It is not necessary to prepare separate copy for each slide in a step-by-step series. All of the slides in the worksheet series were prepared from a single copy of the complete illustration. This was accomplished by blocking out portions of the copy with white paper. The projector can be adapted for use in various size classrooms by means of lenses of different focal lengths. This type of machine because its fan is noisy, can he used more effectively if it is placed behind the students. The fan is necessary because of the high wattage of the lamp required to permit projection in a lighted room. Any type of white surface is suitable for use as a screen for black and white projection.

Abstract The creation of the Commission on Organization of the Executive Branch of the Government by authority of the Congress of the United States is but one of many attempts to reorganize extensively the Executive Branch of the United States Government. The Commission is composed of twelve members representing the President of the United States, the Senate, and the House of Representatives. While the General Accounting Office is an agency of the Legislative Branch, it is impossible to disregard its functions in any study of accounting in the Executive Branch of the government, especially as to the placement of certain responsibilities and avoidance of duplication of effort. The suggestion has just been made that the powers of prescribing methods of accounting disallowing expenditures do not properly pertain to auditing. It is desired also to make certain comments with respect to the audit responsibilities of the General Accounting Office in part from the standpoint of the placement of responsibilities between the Legislative and Executive Branches and in part from the standpoint of indicating that greater benefits may be obtained from independent auditing.

Abstract The article presents information on the statistical data on depreciation bases. As a result of the drastic rise in construction costs in the past few years and the expectation of a continuation of a high level of prices, it is not surprising that there is considerable discussion today on the problem of the basis to be used for the depreciation of plant assets. This article is devoted instead to the presentation of a series of data showing in a statistical manner the precise nature of the problem. To limit the problem, only depreciation of building cost is considered. The data included herein are taken from the records of a number of residence halls for men and women students at the University of Michigan. The depreciation expense per student per year varies widely that a noticeable effect on comparative operating results of the several halls will be obtained from accruing depreciation on a cost basis. Especially is this the case when it is remembered that revenue rates, salary and wage rates, and food prices, the three major items in a residence hall operating statement, are essentially the same for all halls.

Abstract Reviews the book "Cost Accounting," by Clarence L. Van Sickle.

Abstract The article discuss recent developments in the statistical utilization of accounting data by the federal government. In particular, attention will be focused on the statistical utilization of accounting information for what may be called top-policy purposes. Most accountants are familiar to some extent with the utilization of accounting data by various federal agencies for direct administrative purposes. In the administration of tax laws and for regulatory bodies, accounting data have proved indispensable for handling individual cases. Moreover, most accountants are probably familiar with the fact that individual case information is frequently compiled into statistical information as a means of orienting agency policy, setting standards, and serving as a basis for recommendations to the U.S. Congress. In a sense various recent developments in business financial statistics represent extensions of accounting to new areas of great importance. These extensions require the development of new techniques and point of view, and it is hoped that the instrumentalities of classification and analysis made possible by accounting will gain in the process. Full utilization of the potentialities of accounting will occur, however, only if accountants can be persuaded to take a continuing interest in these developments and to acquire the necessary familiarity with the problems involved to adapt their techniques to the requirements.