Dobell and Ho have recently presented in this Journal 1 an aggregate model of the economy in which unemployment may be optimal with respect to a maximum consumption-over-time criterion. They carefully abstract from Phillips curve-type trade-offs involving the price level, or from frictional unemployment. Rather, they extend optimal capital accumulation models to include, in effect, human capital, with training costs and mortality considerationsi ntroduced. Their treatment of investment in training is analogous to wellknown results with respect to investment in physical capital. As is the case with respect to physical capital, there is some level beyond which consumption is diminished by further "human capital" accumulation. Costs of training (analogous to gross saving and investment) exceed returns, so that output remaining for consumption (output less investment in physical capital and less resources used in training) is lower than it might otherwise be. Dobell and Ho conclude that some unemployment (of "untrained" humans) may be consistent with maximum aggregate consumption through time. They mention the possibility of transfer payments to the unemployed, of course, though they are necessarily concerned with questions of production, not distribution..................

Reviews the book "Forecasting the Price Level, Income Distribution, and Economic Growth ," by Sidney Weintraub.

The article focuses on the desirability of reporting the difference between movements of the general price level and movements in the "value" of specific assets, particularly as related to fixed assets. This difference is identified in Accounting Research Study No. 3 as "holding gains and losses" and defined as "the amount attributable to acquisition of goods or services prior to their utilization." It also presents the concept of income, which includes changes in replacement cost of fixed assets as a part of business income, even though a separately reported part, fails to serve these purposes. The failure of replacement cost as a measure of economic value of specific assets, the failure of fortuitous movements of replacement cost to qualify as an element of a useful figure to report as business income, and the possibility of substantially distorted reported income due to the leverage caused by the size of the stock of assets compared to income, coupled with the impossibility of objective measurement of replacement cost effectively condemn any concept of income proposed to date that would include holding gains or losses on fixed assets.