Journal Article A Rejoinder Get access M. Morishima M. Morishima Osaka Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 21, Issue 3, 1953, Page 222, https://doi.org/10.2307/2295776 Published: 01 January 1953

A Note on a Point in Value and Capital Get access M. Morishima M. Morishima Osaka Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 21, Issue 3, 1953, Pages 214–217, https://doi.org/10.2307/2295774 Published: 01 January 1953

Journal Article Some Aggregation Problems in Demand Analysis Get access M. J. Farrell M. J. Farrell Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 21, Issue 3, 1953, Pages 193–203, https://doi.org/10.2307/2295772 Published: 01 January 1953

Journal Article A Further Note on the Theory of Inflation Get access Arthur M. Okun Arthur M. Okun New Haven, Conn. Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 21, Issue 3, 1953, Pages 244–245, https://doi.org/10.2307/2295781 Published: 01 January 1953

following study proposes to generalize the classical theory of economic equilibrium and of welfare economics to the case of risk. Besides our own work, the only similar attempt which has been made in this field is, to the best of our knowledge, Mr. Arrow's paper, The Role of Securities in the Optimal Allocation of Risk-Bearing, presented at the international colloquium on risk which was held in Paris, May, 1952. It is quite astonishing that such an important chapter of economics, both from theoretical and practical points of view, has up to now never been the object of systematic study. reason for this is certainly its great difficulty. As the method of attacking this problem is doubtless the basic difficulty, we have, in order to make the exposition easier, confined ourselves to a simplified model. This has the double advantage of making perfectly evident the main considerations which, in our opinion, must enter into the analysis and of providing a simple and explicit framework for discussion. This model, furthermore, lends itself to easy generalization. Generally it can be said that the essential results of the theories of economic equilibrium and welfare economics are still valid in the case of risk.

I. Introduction, 520. — II. A simple model, 522. — III. An examination of Graham's principal conclusions, 526. — IV. Relaxation of the assumptions, 537. — V. Relation to linear programming, 540. — Mathematical Appendix, 542.

M. W. REDER offered his recent and interesting paper, Theory of Union Wage Policy, ' as a contribution to the debate between two schools of thought on the question of the of wage policy. One school, that characterized as emphasizing determinism, is represented in the paper by the writings of Prof. John T. Dunlop. The other, that characterized as emphasizing is represented in the paper by the writings of Prof. Arthur M. Ross. This paper may likewise be viewed as a contribution to the debate over the of wage policy. The issue with which we shall be primarily concerned is this: How could one empirically test the rival hypotheses stating that, typically, the important of wage are (i) political considerations, or (2) economic considerations? Reder, in commenting upon this aspect of the problem, says: Each argues that his statements apply to 'most cases' or to a class of significant cases, etc. Unfortunately, all the empirical evidence that is available consists of examples illustrative of one contention or another; but what is needed is a census . . . of wage decisions, so that some quantitative estimates might be made of the number and importance of the cases conforming to the various competing theories. 2 Unfortunately, Reder does not go on to tell us in what terms such a census should be drawn. That is, how, precisely, we would determine to which theory a given case conformed. In our opinion, the answer to this question is not so patent that it need not be discussed. It is our contention that no satisfactory empirical test can be devised unless careful attention is paid to the following two points: First, the concepts union wage policy and determinants (of wage policy) have as their empirical reference some behavior on the part of individuals. Unless the behavioral content of these concepts be specified unequivocally, we cannot know the nature of the empirical evidence that would be required to test the competing hypotheses.3 Second, the concept determinants (of wage policy) is susceptible to two widely different interpretations.4 On the one hand, it may refer to motivation. On the other hand, it may refer to certain aspects of the union's economic behavior other than motivation. The evidence necessary to test the competing hypotheses will depend upon which interpretation the investigator is putting upon the concept determinants. In what follows, we will attempt, in this order, to: (i) present the schematic paradigm in terms of which any particular behavioral model of wage should be cast; (2) elucidate the two interpretations of the concept determinants (of wage policy); (3) propose one particular behavioral model of the concept wage policy. Vis-'a-vis this model, will be understood in the nonmotivation sense. In the attempt to define a satisfactory model, a major difficulty arises from the consideration that the union's wage is probably determined by tactical as well as substantive considerations. A way around this difficulty is proposed. Finally (4), we shall consider, briefly, the analytical