Journal Article A Note on “A Constant-Utility Index of the Cost of Living” Get access R. C. Geary R. C. Geary Dublin Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 18, Issue 1, 1950, Pages 65–66, https://doi.org/10.2307/2296107 Published: 01 January 1950

An empirical cost function for fuel consumption in air transportation is obtained from a consideration of the engineering determinants of the relationship between physical inputs and physical outputs. The accuracy of fuel consumption estimates so obtained is considered in the light of operating data for Northeast Airlines. Marginal cost functions are derived which facilitate theanalysis of the impact upon cost, not only of changes in output and factor prices, but also of changes in quality of the product and the techniques of production. The advantages and limitations of the approach are indicated. (Из JStore)

FELLNER and Somers have commented on my short article' in such a way that I must stress certain observations. They claim that I find no loanable funds theory in the dynamic case. This is not entirely correct. I have followed some routine procedures in setting up dynamic models and can adapt them to contain either a liquidity preference or a loanable funds theory of interest. My purpose is to show that the twQ theories are different in a dynamic framework, and I do not rule out either one in advance. Ultimately the choice between the two theories will have to be based on empirical information. The concept of dynamics proposed by Fellner and Somers is thoroughly unacceptable. Their definitions lead to results that are formally equivalent to those obtained in static analysis, and no number of references to distinguished persons in the field of interest theory will make their brand of dynamics any more interesting or useful. Actually, I have tried to give a more realistic picture of economic processes that yields much richer solutions. I am greatly disappointed at the insistence of Fellner and Somers on what I choose to call a sham dynamics. I must point out that by assuming kg to be an exogenous variable, I am under no compulsion to assume k= ki . This point is made only in the interest of precision since the assumption of Fellner and Somers (kt = kt-1), although unwarranted, plays no essential role in the treatment of the problem at hand. The dogmatic assertion of Fellner and Somers that '.. . in any system, these factors [other than the demand and supply of securities] can affect the market rate of interest only through their effect on the demand and supply of interest-bearing securities closes the door to scientific discussion. This is, self-evidently, the central assumption of the loanable funds theory, but it cannot be used to prove that the liquidity preference theory is identical, for in the latter theory an entirely different assumption is used, namely, that interest is the reward for being illiquid. Thus, the grin has a cat after all. I close with a rhetorical question. What are the structural characteristics of their suggested unique relationship between the excess demand for money and the excess demand for claims? Is it a behavior equation for some group in the economy; or is it a market clearing equation; or is it an institutional equation; or what is it?

E FFICIENT operation of a free enterprise system requires that consumers look after their own welfare. Persistent failure of consumers to safeguard their own interests can seriously weaken even the richly endowed economy of the United States. Moreover, consumer ignorance could well be a major cause of the economic privations of the poorest third of the nation. It is universally acknowledged that consumers lack knowledge to some degree. However, no systematic effort has been made to probe the size of this deficiency. No one knows whether most consumers intelligently pursue their self-interest most of the time or whether most of them fail to do so most of the time.

THE rate of economic development of the Soviet Union is a subject of considerable interest to western economists. To date, the most important single measure of this development has been the official Russian index of the physical volume of production of Russian industry published in various Soviet sources for the I920's and I930's. In the past few years, there have been several articles by western economists devoted to a discussion of the defects of this index.2 The main criticisms are these. First, the index represents gross value of industrial output rather than value-added. Second, the index is subject to an inflationary bias on two main counts: (i) prices of the baseweight year I926-27 were unduly high for many newly produced industrial goods which continued to be valued at these inflated prices even after more efficient production methods ha:d brought their prices more in line with the overall price structure of the economy; had a later year been used as a base-weight year the resulting index would have revealed a smaller rise than the existing index does; (2) the so-called constant prices of I926-27 include an increasing number of prices for later years so that, under conditions of rising prices, an artificial inflation of the index results. Soviet economic authorities themselves have long voiced dissatisfaction with the official index expressed in prices of I926-27, and in I948 it was decided to abandon the I926-27 based index in favor of an index expressed in current wholesale prices and corrected for price changes by means of a wholesale price index.3 It is not known whether the new method is in actual use, whether the old official index will be recalculated by the new method or, if this is done, whether the results will be made public. Despite these reasons for dissatisfaction with the old official index, western economists have made no attempt to date to construct independently a more satisfactory index of Soviet industrial output.4 Although Societ statistical sources contain an adequate number of series for output in physical units (i.e., tons, square meters, etc.), a means for combining these in a single index of industrial output has been lacking. This is due to the deliberate suppression by Soviet authorities of the necessary price data. No systematic presentation of price data has been made for any year, and such scattered prices as are available are largely for years prior to I930. No price index has been published for the years after I93I. Value of output is never expressed in the prices of the current year but always in the so-called constant prices of I926-

Journal Article A Comment on Mr. Ichimura's Definition Get access J. R. Hicks J. R. Hicks Oxford Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 18, Issue 3, 1950, Pages 184–187, https://doi.org/10.2307/2295978 Published: 01 September 1950

Reviews the book "Cost Accounting," by James H. March.