Under the gold-exchange standard, national currencies have supplemented gold as an international means of payment. The extent to which the fiduciary component of international reserves can be expanded depends on the reserve policies of central banks. Investigation of these policies is essential in assessing the adequacy of international reserves and the urgency of reducing the U.S. balance of payments deficit. Therefore, in this paper, we extend and test Kenen's model on reserve policies of central banks [4] and show its implications for U.S. balance of payments policy.'

Adolescents with connective tissue diseases (CTDs) are at risk for community-acquired and opportunistic respiratory tract infections; it is mandatory to consider an infectious etiology in the differential diagnosis. The authors highlight the respiratory manifestations of the more common CTDs seen in adolescence, and also discuss useful diagnostic tests and drug regimens.

Abba Lerner's formulation of the optimum division of remains interesting although in some ways ambiguous. The comment by William Breit and William Culbertson in this Review is evidence of both points. There is still no formal proof of the theorem for an arbitrary number of persons, even if its outlines are clear enough. The equal assumption remains unclear. This note contains a proof of the weak' theorem for N persons. It uses a concept of ignorance derived from information theory.2 Throughout this paper the term income is used in a somewhat special sense, following Lerner et al.; a sense somewhat akin to Gary Becker's full (p. 497).3 It is evaluated on the assumption that the individual works the maximum feasible hours at maximum effort; purchases of (quantitative or qualitative) leisure are treated like any other purchases.4 Moreover, it is assumed that we may discuss redistribution without considering the effect of resulting price changes on the utility-of-income schedules, (see Lerner (1944) pp. 23-24). Suppose that the distribution of by individual shares is given, that is, when Yi is the of individual i, and Y is total Yi/ Y = yi is a given constant for i = 1, ... ,N. The yi may be regarded as the probabilities that an incremental dollar of purchasing power goes to individual i. Now, suppose it is known that each individual's utility function is drawn from a finite family fj(Yi), for j = 1, . . . , J; i = 1, N. The probability that individual i's utility function is function j is pij. The expected utility of a dollar of purchasing power allocated to individual i is

The household production model provides a framework for the theory of the household, and most applications have focused on its implications for market and nonmarket behavior. In this paper I examine the consequences of the new home economics for welfare analysis, and in particular for the cost-of-living index. In the household production framework market are combined with time to produce These commodities, rather than the market goods, are the arguments of the household's preference ordering; the demand for and time is a derived demand, since are not desired for their own sake, but only as inputs into the production of commodities.' This paper is an analysis of the implications of the household production model for welfare evaluation, not a critique of the model. Hence, it accepts the fundamental distinction between and commodities, and assumes that commodities as well as are observable and measurable.2 The distinction between technology and tastes follows unambiguously from that between and commodities. In orthodox demand theory the household's preference ordering is defined over the goods and welfare analysis is based on those preferences. The cost-ofliving index is defined as the ratio of the minimum expenditures required to attain a particular indifference curve of this preference ordering under two price regimes. In the household production model the preference ordering over the commodity space provides a corresponding basis for welfare evaluation. One way to extend the notion of the cost-of-living index to the framework is to define it as the ratio of the minimum expenditures required to attain a par

The essential question for a positive theory of arts financing is: what determines the quantities and relative shares of the different sources of arts support? These sources include the earned admission revenues from purely private financing, and the unearned primarily lump sum money grants given by individual private contributors, corporations, foundations, and governments at all levels. Unfortunately, our analytical understand

This paper derives some analytic results concerning the possible effects of a tax-based incomes policy (TIP), and compares them to the effects of a wage subsidy or a decreased payroll tax. The policies are compared using a model of firm equilibrium which is somewhat simpler than that of Yehuda Kotowitz and Richard Portes, and R. W. Latham and David Peel. Because the model is one of firm equilibrium, it ignores both interactions among firms and workers, and the bargaining process. As a result, it cannot answer all possible questions about the effectiveness of a TIP. Nevertheless, the model can address an important question that lies at the very heart of the issue of the possible effectiveness of a TIP: in what way would a TIP influence a firm to change its wage and price decisions, assuming nothing else in the economy were to be changed. If, as shown below, certain versions of TIP