Journal Article On Variable Majority Rule and Kramer's Dynamic Competitive Process Get access Douglas H. Blair Douglas H. Blair University of Pennsylvania Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 46, Issue 4, October 1979, Pages 667–673, https://doi.org/10.2307/2297034 Published: 01 October 1979 Article history Received: 01 December 1975 Accepted: 01 November 1978 Published: 01 October 1979

Journal Article On the Definition and Measurement of Instability and the Costs of Buffering Export Fluctuations Get access A. H. Gelb A. H. Gelb University of Essex and Queen's University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 46, Issue 1, January 1979, Pages 149–162, https://doi.org/10.2307/2297178 Published: 01 January 1979 Article history Received: 01 February 1977 Accepted: 01 February 1978 Published: 01 January 1979

In a Walrasian economy, differences among agents in their attitudes towards risk do not constitute an inducement to trade. This is an outcome of the assumption of existence of a complete system of markets in contingent commodities.1 The assumption is, however, empirically unjustified. It is this observation that underlies the implicit theory of employment introduced by Baily (1974) and Azariadis (1975) and further elaborated by Baily (1975), Sargent (1975), Feldstein (1976), Negishi (1976) and Varian (1976). The assumptions and conclusions of the implicit contract theory can be briefly summarized as follows: It is assumed that a firm has a certain pool of workers associated with it and faces an uncertain price for its output. It is further postulated that the firm's objective function is the expected value of its profits, while workers desire to maximize the expected utility of their income, the latter characterized by risk aversion. The firm chooses the employment contract which maximizes its expected profit subject to the constraint that it provide the workers with a minimum of expected utility. The latter is supposed to reflect the opportunities open for workers elsewhere in the economy. Under these assumptions it can be demonstrated that the optimal contract involves full employment of the firm's labour pool at all states of nature, and a constant wage rate-i.e. a wage rate independent of the contingency realized. The above formulation involves a number of conceptual and empirical problems: It is assumed there is unanimity concerning the probability of occurrence of the various states of nature. Furthermore, not only are workers identical, but firms know the exact form of their utility function. The argument depends crucially on the risk neutrality of firms. In the absence of markets for contingent securities this assumption can only be justified in the very special case of perfect negative correlation between the profits of different firms. Otherwise one has to rely either on the superiority of firms vis-a-vis workers concerning the accessibility to capital markets, or in some Knightian distinction between the innate risk neutrality of entrepreneurs and risk aversion of workers. Workers are assumed to have an indirect utility function separable in income and prices. If this is not the case, even though firms behave parametrically with respect to the prices of goods, they must take into account portfolio-theoretic considerations on the part of workers. Since the only constraint faced by a firm is that the expected utility provided by the contract it offers be greater than or equal to some competitively determined level, it is implicitly assumed that workers cannot abandon the firm after the state of nature has been realized. Equivalently, the costs of movement for workers past the initial contracting period are assumed to be infinitely high. For otherwise, the constraints faced by a firm would take the form of a minimum wage to be paid at each state of nature. In the extreme case of costless labour mobility, this implies that firms are wage takers in the labour market.

Journal Article Estimation of a Vintage Capital Model for Electricity Generating Get access Hugh R. Wills Hugh R. Wills London School of Economics Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 45, Issue 3, October 1978, Pages 495–510, https://doi.org/10.2307/2297251 Published: 01 October 1978 Article history Received: 01 October 1976 Accepted: 01 July 1977 Published: 01 October 1978

Journal Article Reserve Stocks as External Targets and the Stability of Alternative Exchange Rate Systems Get access Jay H. Levin Jay H. Levin Wayne State University Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 1, February 1977, Pages 59–69, https://doi.org/10.2307/2296973 Published: 01 February 1977 Article history Received: 01 November 1975 Accepted: 01 August 1976 Published: 01 February 1977

Journal Article Optimal Control and Stabilization Policy: An Application to the Coffee Economy Get access Alan H. Gelb Alan H. Gelb University of Essex Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 44, Issue 1, February 1977, Pages 95–109, https://doi.org/10.2307/2296975 Published: 01 February 1977 Article history Received: 01 December 1974 Accepted: 01 August 1976 Published: 01 February 1977

Journal Article A Note on Consistent Naive Intertemporal Decision Making and an Application to the Case of Uncertain Lifetime Get access H. Stuart Burness H. Stuart Burness University of Kentucky Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 43, Issue 3, October 1976, Pages 547–549, https://doi.org/10.2307/2297234 Published: 01 October 1976 Article history Received: 01 May 1975 Accepted: 01 October 1975 Published: 01 October 1976

Journal Article Liberal Values and Independence Get access Julian H. Blau Julian H. Blau Antioch College Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 42, Issue 3, July 1975, Pages 395–401, https://doi.org/10.2307/2296852 Published: 01 July 1975

Journal Article The Portfolio Balance Theory of the Expected Rate of Change of Prices: Comment Get access James H. Scott, Jr. James H. Scott, Jr. University of Wisconsin-Milwaukee Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 40, Issue 4, October 1973, Pages 579–580, https://doi.org/10.2307/2296591 Published: 01 October 1973

Journal Article Efficient Estimation of the Reduced Form from Incomplete Econometric Models Get access R. H. Court R. H. Court University of Auckland Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 40, Issue 3, July 1973, Pages 411–417, https://doi.org/10.2307/2296460 Published: 01 July 1973