Henry D. Lytton, Public Sector Productivity in the Truman-Eisenhower Years: A Springboard for the Kennedy Administration?, The Review of Economics and Statistics, Vol. 43, No. 2 (May, 1961), pp. 182-184

Introduction, 1. — I. A simple model, 2. — II. A more complicated model, 9. — III. Significance of the assumptions of a closed economy and perfect competition, 14.

This article attempts to set forth a primary objective of accounting education and to show how it is compatible with more general education. Knowledge of business situations is dependent upon an ability to communicate in the language of business, whether it be in relation to past performance, present position, or future expectations. Accounting education, with a primary objective of preparing students to better evaluate situations or conditions, is in position to provide specialized training not provided for in general education as such. The primary objective of accounting education is to better prepare students to evaluate conditions and situations whether they be business, public, or private, in which monetary or economic considerations are paramount, yet with a full awareness, on the part of the evaluator, of the moral and ethical considerations involved. The technical aspects of accounting must also be taken into consideration in deciding the right course. However, the inclusion of technical accounting training at the college level need not be at the expense of the primary objective.

With the development of the modern corporation, accounting reports have become more difficult to prepare and to interpret. Many of the problems are centered in that portion of the balance sheet identified as the net worth, proprietorship, or capital section. There are several explanations for the existence of these difficulties. One arises from the complexity of reporting the effect of such transactions as the issuance of shares, the payment of stock dividends, and the reacquisition and reassurance of shares, when ownership is diffused among different classes of stock each having special features. Another arises from the numerous and varied legal restrictions that directly or indirectly influence the reporting of corporate equities. The recent article by Professor Buttimer concerned with the statutory influence on accounting for treasure stock is an illustration of this problem.' It may be that accounting theory has not developed to the point necessary to define precisely the functions and objectives to he served by each item of information in the stockholders' equity section of the balance sheet. This is another explanation which may account for the wide variety of terminology used and the varied and often vague objectives attempted to be served.

Reviews the book "Top Management Handbook," edited by H.B. Maynard.

HIS paper presents a model of T which is an extension to n sectors of the original one-sector equilibrium paths developed by R. F. Harrod and E. D. Domar.1 Following Harrod, we employ discrete periods of time and hence a (first-order) difference equation technique. However, in order to give the model a prescriptive rather than a predictive overtone, the first differences refer to the immediate future instead of the immediate past. In addition, an allowance for depreciation is included in the model. By balanced growth we simply mean the existence of equilibrium (the equality of supply and demand) in every market in every time period. Equiproportionate of each market is a special case of as used in this paper. Prices do not explicitly enter the model. Supply in each market is an increasing linear function of the existing capital stock in that sector or industry, and hence the model refers to a one-factor economy. However, capital is not transferable from one sector to another. The single factor of production (capital) is produced by a single industry, the investment-goods industry, the input into which is also capital. Demand for the output of each industry, with the exception of the investment-goods sector, is an increasing linear function of net real income. By definition, these industries are producers of consumption goods, all of which are non-inferior from the point of view of the income-demand relation. The demand for investment goods is a mixed accelerator-multiplier relation. The solution of the system expresses net aggregate output as a function of integral values of time. The output of each sector at any time can then be determined from the structural equations of the model.

IT is widely believed that for some individuals saving may be negatively related to the rate of interest. The argument is usually put in terms of a person's desire to have a particular sum (or an annuity of a particular size) available at some future date. In such a circumstance a rise in the rate of interest will make easier (in terms of present abstention from consumption) the attainment of that particular future sum (or annuity). Therefore, the argument continues, the rise in the interest rate will reduce saving.' We do not wish to question the proposition that such perverse reaction to changes in the interest rate may adequately describe the behavior of some individuals; however, we do propose to criticize the extension of the proposition about individuals to the body of consumers in aggregate. This paper takes issue with those who contend that the aggregate saving-interest rate function for households may be perverse. 2 Our purpose is threefold. First, we wish to demonstrate that the use of the saving-for-a-fixedfuture-sum argument as support for the hypothetical negative relation between aggregate personal saving and the interest rate has unacceptable implications. In particular, it will be shown that it implies that aggregate personal saving is non-positively associated with aggregate real income.3 Second, we shall argue that a more general way to discuss a negative relation between saving and the rate of interest is in terms of the price elasticity of demand for future goods. Saving for a fixed future sum is a special case of this more general phenomenon. But third, we shall demonstrate that if the aggregate saving-interest rate relation is perverse, then the implied reaction of consumers to changes in expected future money prices would also be perverse.4 We shall treat these matters in turn after introducing the geometric tools.