Journal Article Tariffs, Retaliation, and the Elasticity of Demand for Imports Get access W. M. Gorman W. M. Gorman Birmingham and Ames, Iowa Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 25, Issue 3, June 1958, Pages 133–162, https://doi.org/10.2307/2295983 Published: 01 June 1958

Journal Article Culbertson on Interest Structure: Reply Get access J. M. Culbertson J. M. Culbertson University of Wisconsin Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 72, Issue 4, November 1958, Pages 607–613, https://doi.org/10.2307/1884340 Published: 01 November 1958

Introduction, 351. — I. The conditions of market efficiency, 353. — II. Neoclassical external economies: a digression, 356. — III. Statical externalities: an ordering, 363. — IV. Comments, 371. — V. Efficiency, markets and choice of institutions, 377.

I. Introduction, 77. — II. Distinction between “bargaining” and “negotiation,” 78. — III. The choice theory model used in this analysis, 79. — IV. An explanation of why the parties negotiate at all, 82. — V. Analysis of the negotiation process itself, 85. — VI. An illustrative application of the model, 87. — VII. Five analytically separable ways in which negotiation may terminate, 90. — VIII. Conclusion, 96.

COUNTERCYCLICAL effects of public expenditures have received voluminous treatment in the economic literature of the past thirty years. There is one significant area, however, where improved data and analytical tools may provide new understanding. This is the area of public expenditure effects on employment and industrial output throughout the economy. The question of economy-wide effects was of considerable concern to early analysts of government work and relief programs. Early studies of these effects ordinarily began with a limited number of final materials and laboriously traced their production back through intermediate stages. In contrast to these earlier methods, input-output analysis, as introduced in Professor Leontief's The Structure of the American Economy in I94I, started with a comprehensive picture of the production relationships among all industries and provided a formal technique for tracing out economy-wide production and employment repercussions. The Bureau of Labor Statistics extended Leontief's empirical work into the postwar era, and in I952 published the results of a massive and detailed study of interindustry relationships for the year I947.' The present study uses the same interindustry data to investigate the employment effects of a variety of possible government spending programs. These include several types of public works, defense procurement (195I pattern), and general government spending at both the national and local levels. In most cases these spending patterns were those observed for the year I947, but some material for I954 was also available. Because government policies can also influence expenditures in other parts of the economy, the analysis has been extended to private house construction, all industrial construction, consumer spending (which may be increased through tax cuts, expanded government payrolls, or direct relief payments), and private capital investment. The analysis of these expenditure patterns, however, is of interest to countercyclical policy only to the extent that government policies actually do bring about the type of spending described. Finally, averages for all new construction (1947 pattern), all maintenance construction, and Professor Leontief's earlier results on foreign trade are included for comparison.

PpTHE effect on national income of a change in government expenditure exactly matched by a change in tax revenue has recently been the subject of discussion in several articles.' Much of this discussion has been prompted by a desire to generalize the result obtained in the paper by Baumol and Peston and to remove certain loose ends which were left hanging in their analysis. That there were such loose ends is beyond doubt. Baumol and Peston did not fully distinguish direct from indirect taxes in their model; they considered only one marginal propensity to consume; and they did not take into account the possible effect on the level of investment of a balanced budget change. The reason for these omissions is, of course, clear. A number of economists had analyzed the balanced budget problem and produced models in which the value of the balanced budget multiplier was unity.2 It was obvious, however, that the number of assumptions which had to be made in order to obtain this conclusion rendered it of little practical value. A need seemed to exist, therefore, for modifying the model in the direction of realism without at the same time making it intractable. This was done by the very simple device of introducing the idea of the marginal propensity of the public sector to spend on currently domestically produced goods and services. Calling this k (o < k < i), and the marginal propensity of the private sector to consume currently domestically produced goods and services c, a balanced budget change equal to A T would cause