Journal Article Prices and Profits in State Enterprise Get access A. M. Henderson A. M. Henderson Manchester Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 16, Issue 1, 1948, Pages 13–24, https://doi.org/10.2307/2296140 Published: 01 April 1948

controls, has found many advocates. The idea of employing OPA methods of price control without rationing would be patently stupid. The establishment of maximum prices which are below free market prices and not coupled with official rationing would create a strong excess demand and would force distribution of the goods to be accomplished through private rationing techniques of retailers favoritism or through first-come-first-served techniques standing in lines or through secret price premiums black markets. Hence, rationing by the government would have to be introduced in order to permit an orderly distribution of the commodities, which would all be scarce at prices fixed below the free market level. In peacetime, without the strong feeling of urgency in the striving for a universally accepted goal, such a system would provide increased incentives to consume the goods, reduced incentives to produce them, increased incentives to break the law, increased incentives to enforce red tape, increased incentives to use arbitrary power and restrict individual freedoms. It would be a disequilibrium system, making shortages and excess demand a chronic condition, without hope for correction and with increasing difficulties of enforcement. It is not intended here to oppose rationing of anything under any circumstances. One may make a plausible argument for resorting even in peacetime to direct controls for a few selected things under very specific circumstances; to wit, (i) if the object of control is a necessity (such as bread, not meat), (2) if the elasticity of its supply in the short run is practically zero, (3 ) if the elasticity of demand for it is very low, and (4) if it can be reasonably and safely expected that the will be over soon, for example, because demand at the controlled price will greatly decrease or supply greatly increase in the very near future. One may conceivably even argue, although less plausibly, for a general price reduction scheme with general rationing if there is evidence that the reduced prices will within a very brief time be the equilibrium prices owing to an imminent decline in demand or increase in supply. No sound argument, however, has thus far been presented to justify direct controls to enforce a general roll back of prices if neither a decline in demand nor an increase in supply is in sight. From this point of view, the United States is not in an emergency expected to pass quickly. We cannot expect a drastic reduction in demand in the near future nor do we wish for it -and production is now at a rate as high as we can possibly maintain.

much less than it was in the estimates Barger used. Thus, the level of our pay roll series in all years, as well as the movement since I939, is independent of Census data except for a small part of the total. Social security data, the principal source of information on compensation of employees, is not used in arriving at the final product aggregates. In fact, the statistical interdependence between the annual Commerce income and product estimates, aside from certain wash items, like domestic service pay rolls which appear on both sides of the account, is largely restricted to the movement of some major portions of the two aggregates prior to I939 and to some overlapping of sources as between the estimates of personal consumption expenditures and those of income of unincorporated enterprises. This is not, of course, to deny the probability that many firms report the same figures to various collecting agencies, even though they may be erroneous. Neither does it deny that the investigator, when in doubt as to the best estimating procedure or faced with conflicting evidence, properly examines any related data referring to the opposite side of the account for supplementary guidance.

Introduction: scope of the paper, 263. — I. Unionism and earnings, 1933–45: the data, 264; analysis of relative wage movements, 267. — II. Alternative hypotheses: differences in skill, 274; urban and rural industries, 275; proportion of women, 276; degree of monopoly, 277; expanding and contracting industries, 277; summary of these considerations, 279. — III. Unionism and earnings, 1890–1926: Douglas' data, 280; appraisal of the indexes, 281; a more fundamental objection, 282. — IV. Implications, 284.

I. Introduction, 698. — II. The relation of new investment to changes in the use of existing capital, 700. — III. The analysis applied to three concrete problems: (a) vertical integration, 706. — IV. (b) Development of backward areas, 708. — V. (c) The trade cycle, 711.

IN A discussion in this Journal of the estimation from time series of economic relations such as demand and supply equations, G. Tintner developed a technique based on multivariate methods of statistical analysis, the economic relations being identified with the linear relations existing (within the limits of observational error) among the economic variables considered. In the present note a more precise analysis of the same type is adopted in which some of the limitations of Tintner's procedure are avoided. Some data on demand and supply relations for cotton yarn, recently collected and discussed elsewhere by K. S. Lomax, are reanalyzed to illustrate the proposed method. This example is also used to show how the accuracy of the elasticities determined from the equations may be assessed by the construction of confidence regions>' within which the true values are likely to lie.

Abstract Municipal Airports are more and more taking on the characteristics of business enterprises. As business ventures, municipal airports naturally strive to be self-supporting, a condition they can achieve only by meeting their costs and expenses from charges made for their commodities. This development places a new importance on the accounting program of the municipal airport. To achieve a condition of self-support requires, among other things, a complete, accurate knowledge of the financial activities and condition of the airport. Only through the operation of a businesslike accounting program is it possible to obtain this information. The municipal airport, with few exceptions, is classified as a function of the general fund. In this capacity its accounting has developed along lines required in general fund accounting, whose objective is to record what information is necessary for budgetary purposes. This type of accounting is concerned primarily with the cash activities of the various functions of the General Fund in relation to their budgetary requirements.

Abstract Reviews the book "Intermediate Accounting," by Arnold W. Johnson.

Abstract Consistency in accounting usually is considered the policy of adhering to procedures which are identical with procedures used in the past. The definition gives little suggestion of the problems that might arise in an effort to follow the policy. Most accountants would agree that the doctrine should be pursued with a limitation. It should applied only is so far as there is no desirable need for a change of accounting procedure, for making such a change seems to violate the doctrine. It is this area that appears to deserve attention, since the limitation may at times be overlooked. Where consistency is wrongly applied, it becomes a fault rather than a virtue of accounting. The major weakness of unlimited application of the doctrine is glaring when admitted errors are repeated. To omit an asset once from the balance sheet through error does not mean that future balance sheets should exclude the asset just because it would be consistent to do so. This idea seems well accepted and appears to call for a certain amount of inconsistency, thus providing an example of the limitation of the policy.