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In the volume The Brookings Quarterly Econometric Model of the United States (Amsterdam, 1965), there are papers by C. L. Schultze and J. L. Tryon on price determination in the industrial sector, and by D. W. Jorgenson on the investment behaviour of firms in that same sector. When comparing these two contributions, one is struck by the fact that Schultze and Tryon point out that industrial firms are price makers in selling their products, whereas Jorgenson assumes that these firms are price takers. This curious fact gives rise to two questions: (1) If both price equations and investment equations occur in the same model, must then one and the same assumption with respect to producers' behaviour necessarily underlie both types of equation? (2) What is the present state of empirical research on price determination under different market forms? Ad (1): In his Economic Fluctuations in the United States, 1921–1941, L. R. Klein has proved that certain assumptions exist concerning the investment equation of either a monopolist (who is a price maker) or a price taker that are consistent with the same set of exogeneous quantities (data) for both cases. In the light of this proposition one may feel entitled to conclude that no inconsistencies exist between the assumptions made by Schultze and Tryon on the one hand and Jorgenson on the other. It should be noted that Klein proceeds on the idea that price makers are monopolists. It may, however, be better to assume that industrial firms are oligopolists. Ad (2): A good deal of research has been done with respect to production and pricing in markets that have the characteristics of homogeneous polypoly (‘pure competition’). In the field of oligopoly, however, hardly any empirical research has been done; here, theoretical constructions are practically all we have. The theory of oligopoly states that the central problem is to find out what is the best hypothesis concerning the reactions of firms on an action taken by one of them. The few investigations on price and investment decisions in oligopolistic markets that do exist (Meyer and Kuh, Meyer and Glauber, Eisner) do not allow for this circular interdependence. It may well be that the theory of oligopoly has laid too much stress on this problem. The work of J. S. Bain on the relations between market forms and market performance is qualified as an important step in the empirical research on oligopolistic price determination. [ABSTRACT FROM AUTHOR]

Presents several books on economics. "Macroeconomics," by F. S. Brooman; "Changes in the Cyclical Behavior of Interest Rates," by Ph. Cagan; "The Northern Myth. A Study of the Physical and Economic Limits to Agriculture and Pastoral Development in Tropical Australia," by B. R. Davidson; "Productivity Differences Within the Service Sector," by V. R. Fuchs and J. A. Wilburn.

Lists various information resources published in the November 1967 issue of the "De Economist."

Lists books and other information resources published in the November 1967 issue of the "De Economist."

The period following the second world war was characterised in The Netherlands by full employment. As a result, the policy with regard to the labour market underwent some remarkable changes. Before the war, the principal aim of that policy had been the prevention of unemployment. Now far more stress is being laid on the creation of a state of equilibrium between the various parts of the market. At the same time, because people became more aware of the fact that economic policy in general should be directed towards attaining a high rate of economic growth, another new element was introduced into labour market policy. It was felt to an increasingly strong extent that such policy should also be made to serve the purpose of attaining an optimal use of the available and potential labour force. The author is of opinion that labour market policy should be a matter of co-operation between government and socialeconomic organisations. and the entrepreneurs. It should start at the level of general and professional education, and take into account that the present phase of economic development shows important shifts. Agricultural employment in The Netherlands is narrowing down from 8% of the total working population at present, to probably 6% in 1970. Employment in manufacturing is levelling off at a percentage of around 42. This means that employment in the tertiary sector is surpassing 50%. An active labour market policy should be part of a program of general economic planning at middle-long term, and include a policy, directed towards establishing a higher rate of mobility of labour. Co-ordination of an active labour market policy with other sectors of socio-economic policy could be reached by the creation of governmental or semi-governmental bodies, designed to give special attention to the optimal use of the labour force as a factor of production, with due regard to the human element. [ABSTRACT FROM AUTHOR]

Lists various information resources published in the September 1967 issue of the "De Economist."

The study is devoted to the theory of economic growth and its relevance to pure and applied theory. It is maintained that by trying to explain the development of the factors of production the theory of growth represents an important generalization of the static theory of general equilibrium. The main conceptual categories and specific methods of growth theory are shown to be the examination of the existence and stability of growth equilibrium and of comparative dynamics. As far as applied theory is concerned the principle conclusions are the following: economic models devised to explain a country's economic development should be based on the theory of growth rather than on an entirely Keynesian business cycle approach. This does not seem to be generally realised, since the majority of macro-economic models is of basically Keynesian nature. On the other hand the theory of growth needs to be supplemented by a theory of business cycles, because the actual economic development exhibits growth as well as fluctuations. Although great stress is laid on the essential role of the growth theory in any attempt to explain a country's economic development, it is doubted whether the theory can as yet be usefully applied to practical situations. There remain a number of unsolved problems (of measurement etc.) typically connected with the theory of economic growth. While this may, for the time being, prevent the theory from being put to practical use, it in no way affects its basic validity. [ABSTRACT FROM AUTHOR]

Presents several books on economics. "Preferences and Economic Growth," by A. Heertje; "The Feasibility of Developing Transfer of Technology Functions," by D. L. Spencer and A. Woroniak; "Elasticity Optimism in International Trade," by E. H. Preeg; "The Relation of Exports and Economic Growth," by R. F. Emery; Others.

Presents several books on economics. "Trade Creation and Trade Diversion in the European Common Market," by B. Balassa; "Trends and Cycles in British Regional Unemployment," by F. Brechling; "Some Principles Involved in the Economic Comparison of Power Stations," by M. G. Webb; "International Capital Movements and the Theory of Tariffs and Trade," by R. W. Jones; Others.

The formation of communities between various countries, which may develop into economic unions with complete integration, is capable of having a markedly positive effect, not only on the economic development of the member countries, but also on world economy as a whole. For various reasons it seems pertinent to examine the formation of communities between the industrialised non-communist countries. That is to say: economic co-operation within the Atlantic framework between the North American continent, the European Economy Community and the European Free Trade Association. The author is of opinion that in order to give strength to an economic community it is essential not only that the movement of goods, services and capital between the member countries is free, but also that the economic structures of the countries concerned are complementary. The article accordingly deals with a number of important similarities and differences in economic structure. By reference to these the author examines the influence which the formation of a community can have on the economic structure of the participating countries. Since the formation of a community may be regarded as a step towards an economy on an even larger scale, for example of continental or world magnitude, the relations between existing economic blocs are reviewed in the light of available data. As before, the emphasis is on regional/international specialisation. The importance to these communities of international trade, services and credit, as well as some details concerning the international spread of research work are discussed at some length. [ABSTRACT FROM AUTHOR]

This article contains a short survey of recent developments in neoclassical economic theory. Inspiration to write it is due to Murray Brown's interesting book On the Theory anti Measurement of Technological Change (1966). Neoclassical economic theory is presented as centering around the production function. The year 1956 is shown to have been an important year in this respect on account of the discovery of the Solow Function and the Abramowitz Residual. With regard to the theory of economic growth there are now two schools which may be called the school of Meade and the school of Solow. Brown endeavours to break down the Residual. His contribution in trying to distinguish ‘technological epochs’ is discussed at some length. The author welcomes Brown's book, but also points out some of its weaknesses. In his various chapters Brown shifts from Cobb-Douglas to Solow-functions and back again without explaining the reasons why. He also uses different ‘epochs’ for different aspects of his problem. The vagueness of his results is a sign of the experimental and therefore somewhat unsatisfactory stage of the new theory. The author suspects Brown to have fallen a victim to a common neoclassical error: that of overrating substitution effects and underrating keynesian effects. However, Brown's book is seen as an encouraging sign that macro-economics is vigorously working at new problems. Neoclassical economic theory is full of life. [ABSTRACT FROM AUTHOR]

Economic growth, and the level of savings required to finance it, have increased in the Netherlands since the second world war to a considerably larger extent than could reasonably have been expected. The Netherlands are among the countries which, after the period of recovery and economic revival, have become under the spell of the idea of economic growth. The country was able to realize this growth by using an amount in the order of magnitude of 20 per cent, of its national income (calculated at market prices) for the formation of capital. This percentage was attained thanks to the fact that savings of private individuals were largely supplemented by government savings, by business savings (effectuated through keeping appreciable portions of net profits in the business for the purpose of strengthening reserves), and by forming (or enlarging the amount of) funds, set aside for carrying out arrangements made for the payment of old age pensions, widows' pensions and the like. More than half of the above-mentioned total of 20 per cent, was due to savings of these three kinds. As such savings are often not felt by private individuals as sacrifices, they may be called disguised or veiled savings. The author pays special attention to government savings. They have been a permanent feature in the Netherlands since the end of the war; and they have contributed to no small extent towards financing economic growth. They emanated from surplusses of current central government income above current central government expenditure, and enabled the central government to finance important investments, also for the account of local authorities. For the year 1960 a savings quota of 23 per cent, of the national income was registered. Since then the percentage has gone back to 17¼ per cent, in 1963. In the meantime impulses towards economic growth have gained strength. With a view to this development the government recommends serious endeavours directed to re-establishing a savings quota of 23 per cent, of the national income. Given the strong tendency towards increased consumptive spending which has made itself felt during the last few years, the author realizes that this is a desideratum, by no means easy to be fulfilled. He does not, however, consider its fulfilment as a task which cannot be accomplished. [ABSTRACT FROM AUTHOR]