Accounting research theory

Journal Article Hire-Purchase Equilibria: Some Transition Theorems Get access F. R. Oliver F. R. Oliver Exeter Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 30, Issue 2, June 1963, Pages 131–140, https://doi.org/10.2307/2295811 Published: 01 June 1963

Introduction, 537. — Revised Section 7 and problems in its interpretation, 540. — Court interpretations with emphasis on the Brown shoe case, 543. Court interpretations and merger standards proposed by economists and lawyers, 548. — Comparison of two methods of firm growth, 553. — Policy when the effect of a merger is in doubt, 557.

The Strotz-Wold Reply, however, penetrates to the heart of the issue, almost, and it will probably be illuminating to make a rejoinder. To begin with I should like to say that they are justified in taking exception to the unfortunate wording of the headnote. Though, when applied to the sequence of recipes given out by Wold, my remarks do not lack for verisimilitude, they are certainly not true to the letter of the Strotz-Wold article, and I should have taken pains not to convey the impression that I thought they were.2 Accepting their just remonstrance, I turn to the text of my article. The main contention of my paper was that the classical scientific notion of causality (not, however, the doctrine of cause and effect) 3 is adequate to rationalize the construction of non-triangular or interdependent mechanical models in economics; that employment of the classical notion in the case of non-triangular systems neither leads to paradox nor calls for novel categories of causality, e.g., circular causality, bi-causality, vector causality,

FOREIGN economic assistance in the form of commodities and the sale proceeds in domestic currency of those commodities have assisted post-war recovery of West European countries and economic development of many under-developed countries like India. The real significance of the accrual and disbursement of these funds, perhaps, lies in their impact on money supply. Despite its obvious importance, however, the problem of the money supply impact of counterpart funds did not receive as much attention as it deserved, although whether use of such funds is inflationary or not was discussed to some extent.1 India, which has been receiving a large and increasing commodity assistance from the United States in recent years under P.L. 480, provides an interesting example of how variations in money supply are influenced by the accrual and disbursement of counterpart funds and how they tend to influence monetary and debt management policies. The main purpose of this article is to spell out the money supply impact of accumulation and disbursement of the counterpart funds and to indicate broadly its significance for monetary and fiscal policies pursued in India.2 The practice adopted in India for holding counterpart funds has not remained uniform. Between I956, when the foreign assistance in the form of commodities from the United States under P.L. 480 first started coming in, and the middle of I960, the counterpart funds have been held with one of the commercial banks. Since then, however, they have been held with the Reserve Bank of India, which is the central bank of the country. While discussing the Indian experience, we first concentrate mainly on the money supply impact of the accumulation of counterpart funds with a commercial bank as it has acquired greater importance and raised considerable debate.3 The latter practice has been adopted only recently; the likely consequences of the changed procedure are analyzed separately in the latter part of this paper.

T HIS paper is concerned with the problem of measuring potential upgrading demand in the housing market. We seek to develop a means of identifying in sample survey data families who might make a housing adjustment that would provide them with more housing space or higher cost housing. Our analytical framework is a form of cross section demand analysis, with the focus on housing stocks of individual families. We assume these stocks are held because of the services they provide and that each family chooses to hold a stock that provides the flow of services and has a cost consistent with its over-all budget plan. Upgrading adjustments are assumed to arise, when, because of changing needs and ability to pay, families find themselves with less than this desired amount of housing. Our approach to measuring this demand is based on two assumptions. First, we assume that families do not adjust their housing stocks instantaneously to changing demands. Rather, a considerable amount of time may elapse before they do something, which means they are in a position of disequilibrium for some time prior to making an adjustment. Second, we assume these families have significantly less housing than those who are in equilibrium. Given these assumptions, it is our contention that a cross section demand function, calculated from data for equilibrium families, will provide the basis for measuring potential upgrading demand. Such a function would be used to calculate expected stock values for all families in a cross section sample, which would then be compared with the actual stock values reported in the data. A simple analysis of the residuals should enable us to identify the disequilibrium families since, according to our assumptions, they would appear as families who have a deficiency in housing. Measures of housing space and quality are used as the basic dimensions of demand. Our model then consists of two sets of demand equations calculated from data ' for families who appear most likely to be in equilibrium. Equilibrium is defined in terms of attitudinal, purchase plans, and mobility status information included in the data. Where the head is under 45, we assume equilibrium families are those who have no plans to buy 2 or to make major additions to their current housing and have been living in their current residence for five years or less.3 Where the head is 45 or older, equilibrium families are assumed to be those who have no plans to buy or to make major additions to their present housing.4 The model is examined in two ways. First, since its success hinges on the presence of measurable differences between the housing stocks of equilibrium and disequilibrium 5 families, we test for these differences. The equations or norms are used to calculate housing demands for disequilibrium families, which are then compared with the actual housing available to these families.6 If there are