Journal Article Dynamic Cournot-type Oligopoly Models—A Correction Get access M. McManus M. McManus Birmingham Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 29, Issue 4, October 1962, Pages 337–339, https://doi.org/10.2307/2296312 Published: 01 October 1962

Journal Article On the Consistency and Efficiency of Central Plans Get access J. M. Montias J. M. Montias New Haven Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 29, Issue 4, October 1962, Pages 280–290, https://doi.org/10.2307/2296304 Published: 01 October 1962

Comment Get access Robert M. Solow Robert M. Solow Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 29, Issue 3, June 1962, Pages 255–257, https://doi.org/10.2307/2295963 Published: 01 June 1962

Journal Article Substitution and Fixed Proportions in the Theory of Capital Get access Robert M. Solow Robert M. Solow Cambridge, Mass. and Washington, D.C. Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 29, Issue 3, June 1962, Pages 207–218, https://doi.org/10.2307/2295955 Published: 01 June 1962

I. Introduction, 331. — II. The traditional systems, 333. —III. Impact of the new economic era, 335. — IV. The case of West Germany, 339; background of labor-management institutions, 339; recent economic changes, 340; the wage drift, 341; the shifting center of gravity in labor relations, 344; unions and work councils, 345; union and employer views on plant agreements, 348; recent strikes experience, 350; the condition of the union movement, 352; the problem of wage policy, 354; conclusion, 358.

According to Wold, information on some of the variables at time t cannot be used for prediction of the values of the remaining variables at t, in a simultaneous equation system. This, however, is not the case with his causal model. This paper considers the stochastic processes underlying the two models, uses the theory of canonical correlation to discuss Wold's criticism, and suggests the type of additional information necessary to remove these objections. It further shows how both these models are complementary to each other. IN A SERIES of papers, Wold [9, 10, 11, 12] has recently proposed a new type of econometric model, which he calls the implicit causal chain model. The main incentive for this model was an attempt to combine the advantages of Tinbergen's causal model with those of the simultaneous equation systems initiated by Haavelmo [3, 4]. This latter model, which has been studied in detail by the Cowles Commission, is also known as the system. Wold has raised some objections, mainly from the point of view of prediction, against the simultaneous equation system; and in order to remedy these, he relaxed some of the restrictions on the correlational properties of the residuals in the simultaneous equation system. In this paper, these two models are discussed from an angle which offers a possibility for reconciling them. It is shown how the merits of both systems can be utilized by effecting some synthesis of them with the help of the stochastic process underlying both models. Furthermore, by using canonical analysis, it is shown how both these models are complementary. It must, of course, be added that the prediction problem has been considered purely on the basis of the stochastic model assumed, and the possible applicability of different representations of such models, for example, in economic contexts, under wider conditions is not discussed. Wold has objected to interdependent models on grounds other than prediction, especially from the point of view of the interpretation of structural parameters as elasticities, etc. The present paper, however, will not deal with this aspect of the problem. Instead, it deals primarily with the stochastic processes underlying economic models, and the demand and supply model, considered in the next section, is only for illustration.

O NE of the more embarrassing by-products of the United States' farm problem has been the accumulation in recent years of stocks of surplus crops. These surpluses enable others to picture the United States as hoarding food while millions in other lands go hungry. For some time it has been evident that it would be highly desirable to use the United States' farm surplus as economic aid to populous countries, especially those with severe food problems; indeed, some steps have already been taken to do this under the Food for Peace program, and more have been suggested. However, the United States government has properly hesitated to make really full-scale efforts in this direction, at least partly because of the probable effect which such efforts would have on the food export markets of such close allies as Canada and Australia, as well as of such rice producers as Burma. This paper proposes, in broad outline, a possible method of expanding the Food for Peace program in such a way that the food export markets of friendly nations are not damaged. We are concerned, however, only with the problems raised by the undesirability of dumping our surplus on such export markets. There are certainly likely to be other problems involved in an expanded surplus disposal program, but these we do not discuss. It is hoped that despite the unrealism involved, this paper will stimulate useful discussions. Let us begin by listing the features that a plan for disposal of the surplus should have: i. The plan should provide for disposal of the surplus with a minimum of disturbance to the export markets of friendly nations. Also, it should be added that it would be desirable for the plan not to aggravate or induce balance of payments or foreign exchange problems in participating countries.' 2. Benefits under the plan should accrue primarily to those nations at which the program is primarily aimed. It seems poor strategy to adopt a plan such that the Communists can claim (falsely but plausibly) that we are really benefiting only ourselves and our rich capitalist allies at the expense of the poorer nations of the world. Moreover, while there is no objection as such to other food importers (the United Kingdom, for example) benefiting from the program, this clearly should not be allowed to happen at the expense of the underdeveloped countries at whom the program is primarily aimed. (We shall henceforth refer to the latter nations as countries.) 3. It should be clear to all that it is not possible for any country or group of countries to increase its benefits under the plan at the expense of the United States or of other exporting or beneficiary nations by deliberately falsifying its needs. Preferably, the plan should be selfpolicing in this respect that is, such clarity should not be achieved by sanctions external to the workings of the program. 4. Consistent with the other points, the program should cost the United States as little as possible. Of course, it is perfectly reasonable to subtract from the costs of the program the costs of storing the surplus which would be saved by the disposal thereof.