Search

The Revenue Act of 1954 permitted entrepreneurs for the first time to make use of the double declining balance (DDB) and sum of the year's digits (SYD) methods of depreciation in place of the customary straight line method (SL). The tax advantages from using such methods are well known.(n1) In spite of these advantages, however, the accelerated methods in many cases appear to have been adopted only slowly over the years. Clearly any attempt to determine the effect on investment of such provisions must rely on knowledge of the extent of their use. Unfortunately there is no direct information available, nor do estimates exist, for the two-digit manufacturing industries on the fraction of investment in each year since 1954 written off by accelerated methods. In this paper an attempt is made simultaneously to estimate such figures on an annual basis and to fit a learning curve to them.(n2) [ABSTRACT FROM AUTHOR]

The primary purpose of this article is to set forth what is known about the saving and investment behavior of entrepreneurs, particularly proprietors of unincorporated nonfarm enterprises. Income also is covered because of its relevance to saving and investment decisions. The major sources of data are the Bureau of Labor Statistics 1950 survey of consumer expenditures, the Surveys of Consumer Finances made by the University of Michigan Survey Research Center for the Federal Reserve Board, and national accounts and other aggregative data. In the years following the second world war, personal saving has accounted for nearly two-thirds and corporate saving for a little more than one-third of total saving in the United States. Some evidence indicates that proprietors and other self-employed persons played a major part in the provision of personal saving, but other data do not support this conclusion. Contradictions are also to be found with respect to the relative importance of proprietors' investment in their own enterprises. Considering the strategic role of saving and investment in the dynamics of cyclical change and economic growth, it seems important to assay the available evidence in a systematic fashion.

The purpose of this article is to explore more fully the nature of the equilibrium in simple models of economic growth. Two problems are investigated that have not been fully explored before namely effects of introducing explicit assumptions about producers' expectations and the problem of the full utilization of the capital goods produced. Models studied are the simple model that was introduced by economist R.F. Harrod and the modification of this model that was suggested by economist J.R. Hicks. In the original model, Harrod assumes that consumption depends only upon current income, whereas investment depends upon the difference between current income and last period's income. According to this model, the national income must always grow at a rate that Harrod calls the warranted rate. However, Harrod considers his model to be very unstable because any departure from the warranted rate of growth will be followed by an even greater departure from this rate, instead of being followed by a return to the warranted rate. In his explanation of this instability, Harrod is forced to depart from his original model and consider the role of producers' expectations and the possibility of unintended investment.

The advocates of economic integration in Western Europe regard it as a panacea for many of the continent's economic ills. It is expected to work its beneficial effects through increased competition, more planning on a larger scale, and the creation of a European bureaucracy, expected to be less inefficient and less amenable to the pressure of sectional interests than some of the national bureaucracies it would replace. Since the last two factors raises far more political than economic questions, author only deals with the implications of the first, increased competition. This is generally expected to have more profound effects on the nature and direction of investment than on the utilization of existing equipment. The low labor productivity of European manufacturing industry is believed largely to be due to the use of obsolete and inefficient manufacturing equipment; and there is a strong feeling that integration would improve this situation. This article suggests that it should be possible to set up a system of intra-European exchange relations more flexible than a common currency and yet capable of offering businessmen adequate guarantees to encourage their catering to an all-European market and planning their investments accordingly.

This article focuses on Canada's postwar financial story. The great magnitude of and pride in war effort were to bring new confidence not only to businessmen but also to the whole Canadian people. The cautious attitude, which had been fostered by experience with the economy's vulnerability in earlier periods, began to give way to a more buoyant faith in the solid future of the country. The postwar period has been a period of rather rapid population growth. Partly as a result of natural increase, partly as a result of a more vigorous immigration policy and partly as a result of the voluntary accession of New-foundland, population has increased. A more spectacular source of the dynamism in the Canadian economy has been the success, which has attended the vigorous search for hidden riches in the natural resources field. This investment boom has rested not only on the needs arising from increased population and the discovery of new outlets for investment but to a very considerable extent on the voluntary deferment of capital projects in the thirties and the enforced postponement of expansion during the war.

The article introduces the topic on the significance of liquidity preference doctrine which has been subject to criticism as being inadequate to explain the long-term rate of interest. The war has resulted in the increase in money supply and in the increase of idle balances, as one of the major monetary problems. Liquidity preference, which is used for analysis of idle balances, prevents entrepreneurs from obtaining the funds required for high level investments in the face of a low marginal efficiency of capital.