Reviews the book "Introduction to Business," 2nd ed., by Raymond E. Glos and Harold A. Baker.

Abstract The article discusses the significance of invested cost. Accountants have shown reluctance at submerging the long developed techniques related to double entry accounts and historical cost. So they are sometimes charged with being unbending traditionalists. The current impact of changing price levels has stimulated a spirited discussion of accounting ideas. Accounting has always been concerned with doing with its present day ramifications and such, it would seem, as to show that people are in need of other experience also, particularly experience in dealing analytically and persuasively and verbally with controversial ideas. Invested cost seems to embrace more of the concept involved here than any of the other terms alone. It does this in part because invested cost is a phrase that can speak of liabilities and income as well as of assets and expense. It must be clear that expressions such as replacement costs, income expectations, fluctuation profits, lack the concreteness attached to the term invested cost.

Journal Article Notes on the Theory of Inflation Get access C. G. F. Simkin C. G. F. Simkin Auckland, New Zealand Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 20, Issue 2, 1952, Pages 143–151, https://doi.org/10.2307/2295848 Published: 01 January 1952

PROFESSOR Frisch shows that an adverse balance of payments can be met with less reduction to the aggregate volume of trade by discriminatory rather than non-discriminatory import restrictions.2 In his argument for his plan, Frisch seems to have overlooked a case where in the short run the nature of demand of a deficit country, say B, for goods such as staple foodstuffs and basic raw materials fromn a surplus country, say A, may be such that there is a floor of B's imports from A. The issue depends largely upon (i) the possible sources of supply in countries other than A. If A does not represent the rest of the world but is only one country among many countries trading with B, it is improbable that B has to import a fixed amount from A. B's requirements for, say, cotton may be very rigid, but its requirements for cotton from any one source, such as A, may be flexible. (2) It is possible that B may produce most kinds, if not all, of the goods which she imports from A. In such a case, the reduction of A's goods will cause B to expand the output of these goods. These two considerations together make it unlikely that B has to import a specified quantity from the depressed country A. But if A represents not one country alone but a large portion of the countries in depression, there would be a rigidity of B's requirement for goods from A, and a restoration of the balanced situation would call for a reduction of trade between B and C, and the aggregate trade under discriminatory restriction would be little more than that under non-discriminatory restriction. Herein really lies an important weakness of Professor Frisch's scheme; because at a time when there is a large section of the world under depression, which is the time when the need for preserving the volume of trade is most pressing, discriminatory restriction will not achieve any noticeably better result than non-discriminatory restriction. Nor can it prevent a rigidity of requirements of certain countries for imports as a result of the propagation of depression to a large part of the world.