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This paper estimates historical intergenerational elasticities between fathers and children of both sexes in the United States using a novel empirical strategy. The key insight of our approach is that the information about socioeconomic status conveyed by first names can be used to create pseudo-links across generations. We find that both father-son and father-daughter elasticities were flat during the nineteenth century, increased sharply between 1900 and 1920, and declined slightly thereafter. We discuss the role of regional disparities in economic development, trends in inequality and returns to human capital, and the marriage market in explaining these patterns. (JEL D63, J12, J16, J24, J62, N31, N32) [ABSTRACT FROM AUTHOR]

This article presents the author's opinion with regard to George Stigler's views on the practice of political economy in the United States. The evidence presented in the paper of Stigler seems persuasive to me. It is difficult to look at this analysis and still subscribe to the widely held view that election results are highly sensitive to swings in business conditions. Once again we seem to have found that what everybody knows to be true is not necessarily true. Since Stigler's analysis on macro evidence is exhaustive and impressive, suppose we turn to micro evidence to see if it provides any clues to an understanding of why the macro results turn out the way that they do. Here we do gain some insight into attitudes pertinent to Stigler's analysis. What the views of Stigler suggest is that within reasonable tolerances, changes in political sentiment are more apt to reflect the myriad of other factors that bear on voter sentiment. If the swing is outside these tolerances, or if the event is sufficiently visible or discrete, economic developments can exert a substantial effect on citizen support or the incumbent. If therefore, the economic indicators start to waver, the economist may sleep well at night, knowing that in all probability it means little, but the politician may for very good reasons remains awake, wondering if this will be one of those cases that transforms him into a statesman.

The article presents summary of articles present at a round table conference on population problems. Joseph J. Springler's paper is concerned principally with the effects of the various population movements now in process in the United States upon the level of employment. Population movements now in process probably exercise a greater influence today than formerly upon the amount of absolute and disguised unemployment in the American economy because of the greater specificity of factors of production today as compared with formerly. Otto Nathan, in his paper, stated that in analyzing the relationship between population movements and the economic development a distinction should be made between the secular trend and the business cycle proper. One of the factors constituting the secular or long-term development is the population movement itself. In his paper, Alan R. Sweezy, expressed that once an investment boom in underway, increase in the labor supply does have an important influence on investment. Wages rise more slowly than they would with a constant labor supply and numerous investment opportunities consequently can be exploited which would otherwise be unprofitable. The boom once started may be expected to last longer if the labor supply is increasing.

The article presents a list that specifies doctoral degrees conferred during the academic year terminating June 1964, and theses undertaken in the same period. For General Economics; Methodology, degrees conferred to James F. Hofheinz for his paper on The evolution of economic philosophy. For Price and Allocation Theory; Income and Employment Theory; History of Economic Thought, degrees was conferred to Cleverland W. Bateman for his paper on Investment behavior and the acceleration principle. For Economic History; Economic Development; National Economies, degrees was conferred to researcher Ralph Anspach on his paper The problem of a plural economy and its effects on Indonesia's economic structure: a study in economic policy. For Statistical Methods; Econometrics; Social Accounting, the degree was conferred to researcher Takeshi Amemiya on his paper Specification analysis in econometrics. For Economic System; Planning and Reform: Cooperation, the degree was con fared to Michael Boreteky for his paper on The Soviet challenge to U. S. machine building: a study in production and technological policy.

This paper examines the underlying structural elements of US growth patterns, pre- and post-crisis. Prior to the recession, the US economy exhibited a defective growth pattern driven by outsized domestic demand. As domestic aggregate demand retreats to more sustainable levels relative to total income, the tradable side of the economy is a catalyst for restoring strong growth. A structural rebalancing is already underway; although it is only a third of the economy, the tradable sector generated more than half of gross gains in value-added since the start of the recovery. However, distributional issues loom on the horizon. [ABSTRACT FROM AUTHOR]

The article presents a paper on economic-demographic interactions and long swings in economic growth. The paper building on the work of numerous predecessors, suggests that one of the mechanisms responsible for long swings in economic growth may involve interactions among aggregate demand, labor-market conditions, and household growth, with a feedback effect from the last to the first. An upswing in the growth of aggregate demand and the growing labor-market tightness induced thereby engenders accelerated marriage, migration, and household growth. These are critical decision points in the life cycle, entailing spending commitments extending over several years as a new home is established and a family started or settled. In effect, such commitments are geared to a notion of permanent income and thus tend to be relatively insensitive to short term income changes. A bunching of such commitments serves to cushion the economy against the usual business cycle and becomes exhausted only gradually. Such a bunching of long term spending commitments may be the key to Kuznets cycle phenomena.

In the great revival of interest in economic development in the U.S. that has marked the past decade, attention has centered on two main questions: the determining factor of the over-all rate of economic advance; and the optimal allocation of given resources to promote growth. Analysis of the growth rate has relied mainly on the Keynesian tools and has produced a multiplicity of aggregate growth models. In the field of resource allocation, controversy centers around the implications of the classical principle of comparative advantage, according to which growth is promoted by specialization. The present paper discusses the analysis of resource allocation in less developed economies from three points of view. One section tries to ascertain the extent to which the allocation principles derived from trade theory and from growth theory can be reconciled with each other without losing their operational significance. Another section compares various approaches to the measurement of optimal resource allocation in terms of their logical consistency and their applicability to different conditions. One section examines some of the practical procedures followed in setting investment policy in underdeveloped countries in the light of the earlier discussion. Some of the theoretical issues are re-examined to indicate their practical importance.

The widespread tendency in empirical studies of economic behavior to discard war years as "abnormal," while doubtless often justified, is, on the whole, unfortunate. The major defect of the data on which economists must rely on is that the data generated by experience rather than deliberately contrived experiment, encompasses a small range of variation. Experience in general proceeds smoothly and continuously. In consequence, it is difficult to disentangle systematic effects from random variation since both are of much the same order of magnitude. From this point of view, data for wartime periods are peculiarly valuable. At such times, violent changes in major economic magnitudes occur over relatively brief periods, thereby providing precisely the kind of evidence that we would like get by "critical" experiments if we could conduct them. Of course, the source of changes means that effects in which we are interested are necessarily intertwined with others that we would eliminate from a contrived experiment. But this difficulty applies to all our data, not to data for wartime periods alone. To the student of monetary phenomena, the three wartime episodes with which this paper deals the experience of the United States in the Civil War, first World War and second World War offer an especially close approximation to the kind of critical experiment he would like to conduct. As we shall see, in all three cases the rise in prices was of almost precisely the same magnitude, so this critical variable is under control. Yet other crucial features varied, offering the opportunity to test alternative hypotheses designed to explain price changes. Besides their significance for the general understanding of monetary phenomena, the wartime experiences are unfortunately of interest in their own right.

Modern growth theory suggests that more than three-quarters of growth since 1950 reflects rising educational attainment and research intensity. As these transition dynamics fade, US economic growth is likely to slow at some point. However, the rise of China, India, and other emerging economies may allow another few decades of rapid growth in world researchers. Finally, and more speculatively, the shape of the idea production function introduces a fundamental uncertainty into the future of growth. For example, the possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future. [ABSTRACT FROM AUTHOR]

In this paper we investigate how telecommunications infrastructure affects economic growth. We use evidence from 21 OECD countries over a 20-year period to examine the impacts that telecommunications developments may have had. We jointly estimate a micromodel for telecommunication investment with a macro production function. We find evidence of a significant positive causal link, especially when a critical mass of telecommunications infrastructure is present. Interestingly, the critical mass appears to be at a level of telecommunications infrastructure that is near universal service. (JEL O57, O47, L69) [ABSTRACT FROM AUTHOR]

This paper is an attempt to contribute to the integration of business-cycle analysis with long-term growth. a real-business-cycle model with endogenous growth is developed and estimated with U.S. data. In the present framework, wage movements do not have to be transitory to generate fluctuations in labor effort. The reduced form is a constrained bivariate output/hours (or real-wage/hours) VAR process. The bivariate setup provides a useful framework for analyzing the persistence of output fluctuations, given that the theory implies that hours of work contain information about future output movements. [ABSTRACT FROM AUTHOR]

In recent years, the policy mix-defined as the contemporaneous joint state of monetary and fiscal policy-has conditioned the patterns of the business cycle, set up numerous imbalances in macroeconomic and microeconomic behavior, and is laying the groundwork for future economic performance. Restrictive monetary and fiscal policies produced back-to-back economic downturns in 1980 and 1981-82. From 1982 to 1985, massive fiscal stimulus against a backdrop of monetary growth targeting by the Federal Reserve comprised a "loose fiscal-tight money" policy mix. Subsequently, an actual and prospective tightening of the federal budget and suspension of monetary growth targeting suggest a shift in the policy mix to a "tight fiscal-easier money" combination. In this paper, the policy mix of the 1980's first half-in the context of an open economy with flexible exchange rates-is characterized. Some of the important economic and financial effects are identified. Among these are higher nominal and real interest rates than otherwise would have been the case, a strong domestic currency, lower inflation rates, a large and growing trade deficit, an unbalanced composition of economic activity across sectors and industries, and a depressed industrial sector.

There has been much concern recently that large U.S. deficits have, or will soon, produce high interest rates, thus hindering capital formation and economic growth in the U.S. and the rest of the world. In this paper, the author surveys U.S. history to determine whether this concern has merit. There are three periods during which the federal deficit has exceeded 10 percent of national income. In none of these periods did interest rates rise appreciably. Regression analysis applied to data from these three periods has not uncovered a positive association between deficits and interest rates. Economists like to think of economics as a science. In a science, repeated contradictions of a paradigm lead to its abandonment if there is any sensible alternative. One paradigm in economics implies that large deficits produce high interest rates. This paradigm is not supported by the facts. In over a century of U.S. history, large deficits have never been associated with high interest rates. Even the postwar periods separately offer no support for a positive association between deficits and interest rates. Indeed, the evidence more strongly supports a negative association than a positive one. Therefore, it seems that economists should be looking for an alternative paradigm to replace their current one.

This article presents a study in economics about the capital market and the dynamics of growth in the U.S. It investigated the effects of introducing an equity security into a money and growth framework. The model was developed explicitly in terms of securities and capital instead of the more traditional treatment in terms of money and capital. The model was reduced to three differential equations in capital intensity, the wealth ratio, and price expectations. Based on the reduced system, equilibrium and global stability were analyzed. The stability of the model was found to depend crucially on whether the direct interest rate effect was greater than the offsetting wealth effect and whether the rate of forced saving was greater than the adjustment in the rate of inflation. It is proposed that the crucial role of financial markets in general, and security markets in particular, is to take the short-run impact of economic disturbances and allow the rate of inflation to adjust slowly to changes in the economic environment.

This article discusses the stability properties of optimal economic policies in the U.S. Stochastic elements have a stabilizing influence, rather intriguing in view of the fact that in purely descriptive dynamic models such disturbances tend to be destabilizing. Basically the reason for this is that the existence of stochastic elements exerts an inhibiting influence on the policy maker, causing him to adjust his instruments more cautiously than he otherwise would, thereby dampening the adjustment and making it stable. At the same time it means that typically there is correspondingly less response in the target so that as in this example it may no longer be optimal to drive it to its desired equilibrium each period. In this sense the stochastic disturbances exert a destabilizing effect, although of course the target still remains stochastically stable. Thus a kind of tradeoff between the two kinds of stability is seen to occur, although overall the entire system is stochastically stable.

During 1880's, more striking new departures occurred in the U.S. economics than in any other comparable period. At that time the conflict between the established laissez-faire orthodoxy and the newly imported German historical ideas, reached its climax. A wave of public interest in economic problems provided an opportunity for several able young men who came to dominate the U.S. economics for the next three or four decades to obtain their first professorial appointments. Academic economists, as a body, slowly but surely divested themselves of the accumulated propaganda and theological trappings of their subject and secured its recognition as the leading independent social science discipline. The first professional economic journals appeared and the foundation of the American Economic Association on September 9, 1885, approximately the midpoint of the decade, symbolized the birth of an indigenous national tradition of economic scholarship. Although the concluding stages of this long period of gestation have repeatedly been subjected to close scrutiny, the process is intrinsically so interesting that it would be unwise to neglect any new evidence, which has a bearing on it.

This article presents a list of new periodicals related to economics published in the March 1960 issue of the journal "American Economic Review." The periodicals in the general economics section include "Theorie und empirische Forschung in der Sozialwissenschaft," by B. Fritsch, "Professor Shackle on Time in Economics," by B.S. Keirstead, "Les objectifs de la politique économique," by E.S. Kirschen and L. Morissens, "Professor Shackle on the Economic Significance of Time," by L. Lachmann, "The Present Position of Economics," by L. Robbins, "The Methodology of Positive Economics," by E. Rotwein, "The Politics of Political Economists," by G. Stigler and "Science and Welfare in Economic Policy," by F. Zeuthen. The periodicals in the price and allocation theory, income and employment theory, related empirical studies and history of economic thought sections include "Shackle's System and Theories of Business Cycles," by J. Aenman, "Utility, Risk, and Linearity," by G.C. Archibald and "Formal Criteria for Investment Decisions," by M.J. Bailey.

This article presents a study on the accounting of growth output in the U.S. for the period of ten years, from1950 to 1960. The major sources of economic growth in manufacturing during the 195O's were increases in capital, increases in the number of employees, and structural changes that affected the occupational, age, and educational makeup of the labor force. Changes in the sexual and racial structure were very slight and thus had no substantial impact on the growth of output. The isolation of these elements as the sources of growth was due to the combination of having extremely disaggregated data and having a practical rule of thumb for estimating the effect of disaggregation.

The article presents the author's reply pertaining to capital supply and national well-being. Referring to Mr. Keirstead's questions, Snyder remarks that they are derived from a widespread belief that Great Britain's "periodic break-downs" are "inherent" in the present capitalistic system. So the evidence that has been building up in the last 15 years seems to portray an inherent stability and persistence of industrial growth unimagined by most economic and socialistic writers. The forces "inherent" in industry seem admirably adapted to maintain such an equilibrium as Professor Cannon depicts in the human body. It seems only when the body economic is invaded by "infection," such as credit inflation, speculation and booms, that breakdowns occur. Snyder adds that in another 10 or 20 years it is possible that the Soviet experiment will reveal much. But it still may remain open whether the drastic methods it has employed would be feasible in a highly developed industrialized system like in the United States or Great Britain. The capitalistic system has been in a continuous process of transformation and development, pretty much ever since its latest phase began 150 years ago with the introduction of the steam engine and the coming of the Power Age. Snyder predicts that cooperative kind of socialism would be perhaps far more efficient and beneficent than most of its critics can believe.

It is widely recognized that one of the important factors promoting economic growth in the U.S. during the first half of the nineteenth century was an increased degree of regional specialization according to the comparative advantage of each region. The existence of an extensive system of canals prior to railroad construction has caused a revived interest in the role of canals in economic growth. This article is concerned with the issues which are raised in attempting to assess the contribution of the canals to the economic development of the U.S. The article concludes that the role of canals in contributing towards the economic growth of the U.S. is far from obvious. A substantial number of the canals constructed before the war were clearly not profitable. The gains from regional specialization in the U.S. during this period were substantial. But the evidence indicates that the market could have been widened to allow much of this specialization at a cost well below $190 million. Far too much attention has been paid to the regional benefits rather than the increased efficiency of the economy as a whole.

The discussion in this article presents three aspects of economic effects of capital gains taxation that are of major policy importance. This article addresses the impact of capital gains taxation on economic growth, the impact of capital gains taxation on stabilization of the economy at full employment, and the impact of the tax on efficient use of our economic resources. In discussing the effects of capital gains taxation, the article refers to the differential behavior of the economy under two tax systems — a tax system yielding revenues equal to those collected under the present system but without the preferential features for asset transactions and a tax system such as is actually in effect. The comparison does not refer to the difference between the present tax structure and the same structure with preferential capital gains tax provisions deleted because a closing of all capital gains loopholes would generate different amounts of revenue. The desirability of alternative levels of revenue and their economic effects are issues that need not be discussed in this article.

The article focuses on Edward Denison's book "The Sources of Economic Growth in the United States and the Alternatives Before Us," which addresses the issue of the objective analyses of grounds for dissatisfaction or coherent and comprehensive program for accelerating the economic growth in the U.S. His work is, in fact, a notable contribution to a vexed and difficult subject. In astonishingly brief compass, Denison presents a picture of past trends in output growth and in the development of various sources to which the growth of productive capacity can be traced, a projection of the probable future flows from these sources and a measured evaluation of the possible steps that might be taken to make flows still larger. Moreover, in grappling with these complicated and still largely unexplored issues, he has achieved a quite remarkable combination of technical finesse and depth with clear and almost deceptively simple exposition. The book is, therefore a minor miracle of lucidity and persuasiveness which calls for the most serious study by economists while it engages the attention of a much wider audience.

There are several aims and standards that may be set for an economy and the article proposes to consider three of them, to maximize consumer satisfaction, to promote growth and to provide economic security. To regard the satisfaction of the consumer as the aim of economic organization and conformity to consumers' preferences as the standard by which to judge the performance of an economy these are precepts of neoclassical economics, which still dominate most of thinking. Not the least reason for this is the attractiveness of the neoclassical precepts. Their use has encouraged economists to look upon their subject as an objective science and in some sense, a democratic one. Economics is objective, in as much as the criterion of consumers' preferences is given from the outside, treated by the economist as a datum and revealed to him by consumers' actual behavior in the market. The democratic nature of economics derives from the economist's habit of identifying the consumer with the people and consumers' sovereignty with the sovereignty of the people.

The article discusses problems of economic growth in the poorer nations that became a major foreign policy concern of the wealthy and powerful nations of the world. The relative progress in the development of the two countries, India and China, is of great significance. There were strong parallels in their preplan structure and strong contrasts between China's totalitarian and India's democratic programs. Their performance relative to one another may influence the programs adopted by other, now less advanced, countries. It will certainly bear upon the United States and Soviet foreign policies. Furthermore, the record of the course of development in these two lands provides a unique opportunity for examining the process of development as such. Structural unemployment, underutilized resources, overurbanization, nonmonetized savings and investment flows-these are illustrative of the types of problems that must be understood and treated if there are to be steady output gains in most of today's underdeveloped areas.

To make an appraisal, it is first necessary to have some standard by which an evaluation can be made; in this case a satisfactory definition of economic progress. Beyond the definition of a standard, an appraisal involves the application of yardsticks which can be used to measure achievement or lack of achievement in terms of the accepted standard. Progress means movement toward some particular goal or objective. The difficulty comes in the selection of the goal. Goals are determined by philosophical and ethical considerations and in the final analysis are based upon group or individual preferences. There is no appeal beyond the point of the statement of such preferences. No one can prove by an appeal to logic the superiority of one preference over another. For one thing, a failure to understand the relative nature of individual and social goals accounts for a considerable amount of confusion which arises over the meaning and content of progress. As the attitude of many Americans toward the economic depression in Great Britain demonstrates, there can be sharp differences in the interpretation of progress and the means of obtaining it even between two countries that share a common cultural heritage.

The article presents a report of the American Economic Association to the Social Science Research Council (SSRC). A number of committees of the Social Science Research Council continue to be active on matters of interest to the members of the American Economic Association, and a brief progress report on the work of these committees may be in order. The Committee on Economic Growth, under the chairmanship of Simon Kuznets, is continuing its far flung activities. Its foreign studies are well along and arrangements were made this past autumn for work on the Australian national accounts. A conference on the recruitment of a stable labor force in undeveloped areas is planned for the spring of 1958. The Committee on Business Enterprise Research has been inactive but an attempt is being made to reactivate it. In short, the SSRC continues to be active in a range of matter of interest to economist and continues to show a gratifying interest in economic issues for their own sake and in the interrelation between economics and the other social science.