Journal Article Stability of a Dynamic Input-Output System: A Reply Get access Dale W. Jorgenson Dale W. Jorgenson Berkeley Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 30, Issue 2, June 1963, Pages 148–149, https://doi.org/10.2307/2295813 Published: 01 June 1963

Percentage changes in marginal utility are found to be invariant to utility transformations. They are quantifiable in the ordinary sense, and price and income elasticities can be expressed in terms of them. Definitions of necessityluxury, independence and complementarity-substitutability in terms of the measurable utility changes lead to insights for empirical studies. A POTENTIALLY rich source of insights about demand behavior is the wantsatiation characteristics of goods, i.e., degree of necessity or luxury of goods and degree of complementarity or substitutability between them. These characteristics have been stubborn against attempts to bring them into demand analysis. Despite decades of interest, the literature does not appear to have produced satisfactory definitions of complements and substitutes. Previous necessity-luxury analyses have rested on assumed differences in algebraic form of demand functions. Necessity-luxury attributes have not been expressed in terms of the usual utility concepts of consumer choice theory. 2 In the present article, measurable want-satiation characteristics of goods are derived by considering changes in marginal utility when expenditures are shifted within the consumer's budget. It is demonstrated that the percentage change in marginal utility of a good is invariant to utility transformations and can be related to price and income elasticities. This result is due to the previously overlooked fact that the percentage change in the marginal utility of a good, when moving along a given indifference curve, is identical to a change in the marginal rate of substitution brought about by moving from one indifference curve to another. The measurability of percentage changes in marginal utility is thus seen to be as reasonable as the measurability of the marginal rate of substitution. Two systems of percentage changes in marginal utility are developed. The ei system is appropriate for considering one good vis-a-vis all other goods. In this system, an increase in expenditure on a particular good is accompanied by an equal reduction in expenditure distributed among all other goods so

OUR empirical knowledge of the demand and structural interrelationships of the economy at the regional level is indeed limited. Some understanding of these interrelationships can be gained through (1) the economic baseforeign trade multiplier approach, (2) the regional interindustry (input-output) approach, and (3) various other approaches, involving linear programming and the like, which are not of concern here.' Although the interindustry approach seems superior to the base-multiplier approach for most, though not all, purposes, the real difficulty lies in translating either approach into an operational one so that meaningful estimates of these interrelationships can be generated at a reasonable cost. This is a rather unfortunate state of affairs because it means that decision makers have no firm guidelines to use in attempting to assess the impact of autonomous demand forces upon regional economies or specific sectors within them. In an attempt to at least partially remedy this situation, we have developed an alternative type of framework which, for the lack of a better name, can be called an intersectoral flows model. This model incorporates certain features of the base-multiplier approach in addition to certain features of a regional interindustry approach hopefully some of the best features of each in terms of our objectives. In designing the model, one of the main concerns was that it be operational, in the sense that the necessary data could be obtained at a reasonable cost. Thus, to the extent that this objective is achieved, the restrictions on making such studies and repeating them may no longer be so formidable. The particular region chosen for study is California and the three major subregions within the State. Since the interest here is in the model and its implementation, as contrasted with the implications for the California economy, major attention will be focused on these topics.

Reviews the book "Federal Income Taxes," by Fred W. Norwood and Sam W. Chisholm.

Reviews the book "Federal Income Taxes," by Fred W. Norwood and Sam W. Chisholm.

Reviews the book "Inventories--A Guide To Their Control, Costing and Effect Upon Income Taxes," by Raymond A. Hoffman.

Although the product warranty has been in effect for many years, it is surprising to note that the existence of these warranties has almost been completely ignored in accounting literature. Very few, if any, of the standard textbooks at any level discuss the accounting problems concerned with the cost of product warranties. In addition, very little has appeared in the journals of the accounting profession on this subject. Probably one reason for this lack of knowledge is the circumstances surrounding the warranty itself. The long-term product warranty started small and was considered to be of little consequence. As its applicability increased, it was still ignored. An investigation to discover the practices that various companies used to account for the warranty cost revealed that warranties fall into three categories. These three are the reimbursed warranty, sales warranty, and expensed-warranty. As charges occur in connection with the warranty, they are treated as an ordinary sale except that the deferred revenue account is reduced rather than a receivable being increased.