There occurs on some occasions a difficulty in deciding the direction of causality between two related variables and also whether or not feedback is occurring. Testable definitions of causality and feedback are proposed and illustrated by use of simple two-variable models. The important problem of apparent instantaneous causality is discussed and it is suggested that the problem often arises due to slowness in recording information or because a sufficiently wide class of possible causal variables has not been used. It can be shown that the cross spectrum between two variables can be decomposed into two parts, each relating to a single causal arm of a feedback situation. Measures of causal lag and causal strength can then be constructed. A generalisation of this result with the partial cross spectrum is suggested.

In a recent paper in this Journal J. Bhagwati and M. C. Kemp considered the question of ranking tariffs in the presence of monopoly power in trade.' Under the assumption that the exportable goods in the tariff-imposing country were not inferior, the following proposition was established: the country could raise its welfare monotonically by raising tariffs up to a certain maximum (corresponding to the optimum tariff), and beyond this point a further tariff increase would monotonically reduce welfare to the point where protection was prohibitive. The demonstration was based on the implicit assumption that the foreign offer curve faced by the tariff-imposing country was well-behaved. This, however, need not be the case. Even if we assume (in the spirit of the Bhagwati-Kemp paper) that there are no internal commodity price distortions, factor price distortions, or imperfections in the redistribution of income, the foreign country may have a tariff. It then becomes possible, in the presence of inferior goods, for the foreign offer curve to yield multiple equilibria at given terms of trade. In this case it is easy to show that the Bhagwati-Kemp theorem no longer holds. Assume that the foreign country has a tariff and that its export good is strongly inferior. Then its offer curve will have all the properties described by Bhagwati and Kemp in their discussion of the tariff-imposing or country. This is illustrated in Figure I. With the home country's offer curve intersecting it from above in the backward-bending part of the curve, welfare will decline if a small tariff is imposed. As drawn, welfare continues to decline for tariffs up to a rate t, and then increases between the tariff rate t, and tariff rate t2 (while remaining below the free trade level). The welfare level then declines steadily for higher rates until at rate t, the tariff becomes just prohibitive. The corresponding tariff welfare curve is shown in Figure II. Note that, rather than impose

Abstract Recently, professors Karl Kafer and V. K. Zimmerman presented an excellently documented paper on the evolution of the funds statement in the U.S. and in Europe. Following extensive exploration, they pointed out some significant deficiencies of the funds statement. The main purpose of this article, however, is to present a different format for the construction of this flow statement. It is hoped that a structural change in this flow statement will throw some additional light on the study of flows of economic resources at the business-enterprise level. In addition to recognizing the distinction between financial and nonfinancial flows of business operations, it is important to analyze their interplay. Productive activities may be financed internally, externally, or both. A detailed presentation of the financial activities of an enterprise will show not only how additional productive resources are acquired, but will also provide a basis, in part at least, for analyzing expansion and future income flow. The conventional balance sheet and income statement are deficient in depicting financial activities of a firm and in relating theft relationship to the firm's productive activities. It must be remembered that net income is "attributable to the whole process of business activity" and that the operations involves continuous movement of productive and financial resources. The resources-flow statement should not be treated as a supplementary device. It is a basic statement in its own right. With two basic types of flows, the need for at least two flow statements is quite dear. In addition, the resources-flow statement is much more than a statement of financial flows.

Journal Article International Capital Movements and the Theory of Tariffs and Trade: Comment Get access Ken-ichi Inada, Ken-ichi Inada Tokyo Metropolitan University Search for other works by this author on: Oxford Academic Google Scholar Murray C. Kemp Murray C. Kemp University of New South Wales Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 83, Issue 3, August 1969, Pages 524–528, https://doi.org/10.2307/1880538 Published: 01 August 1969

I. The model to be analyzed, 504. — II. Cyclical properties of individual time series, 508. — III. Cyclical relations between time series, 511. — IV. Conclusions, 515.

The memorandum is about the segregation that can result from discriminatory individual behavior. It examines some of the individual incentives, and perceptions of difference, that can lead collectively to segregation. It also examines the extent to which inferences can be drawn, from the phenomenon of collective segregation, about the preferences of individuals, the strengths of those preferences, and the facilities for exercising them.