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The article discusses researches conducted by economists Paul A. David, Warren J. Scoville and Earl J. Hamilton. Researcher Stanley Engerman in his discussion on David's article suggests that his article represents the most thorough study in the debate concerning American economic growth between 1800 and 1840. It is based both on new time series not previously utilized and upon the resourceful application of available data to clarify certain key points. Another researcher Ross M. Robertson while discussing Scoville's article finds his article on the whole persuasive. Robertson certainly has no quarrel with his quantitative inferences, nor for that matter with his description of French governmental regulation in the eighteenth century. He was not altogether convinced of the direct correlation between the paper industry's expansion and the relaxation of direct governmental controls that Scoville alleges. Perhaps Scoville's more extended publications on this subject will elucidate this relationship.

Comments on several articles about the economic development of the United States. Factors that changed income distribution in the country; Arguments on the growth of demand from capital-intensive subsectors.

The article presents discussions by economists on papers by economists James N. Morgan and James D. Smith that was published in the May 1, 1970 issue of the journal "American Economic Review." The author states that the two papers presented by Morgan and Smith reflect changing times. According to the author, income distribution and especially the distribution at the low end are back in the spotlight as an issue of social policy and appropriately it is eliciting scientific attention. Early in the 1960's, concern with sharing the national economic pie was eclipsed by the urgent concern about the lagging growth of the pie. Economists were wise to focus on the aggregative issues in the early 1960's and it is wise to shift focus onto distributive issues as one enters the 1970's. Now that the U.S. has reaped important benefits of economic growth and high employment, other problems deserve emphasis. Both of the present papers make a contribution to that knowledge. They reflect different methodological approaches and stress different issues. They do share one substantive characteristic, pointing to the importance of labor force participation by the wife as a key determinant of family income and income changes.

The article comments on economist Alan Freiden's paper related to the marriage market in the U.S. Freiden has been reasonably faithful to economist Gary Stanley Becker's marriage model in his attempt to estimate the reduced-form equation explaining variation in the proportion of females married. His observational units are regional subaggregates in cross-section data. Thus, the Freiden paper represents a commendable attempt to evaluate the usefulness of the model. The major problem arising in going to the data is in translating and measuring full income. Full income is a precise concept in the theory but is made up of two main components, one of which is ambiguous in its effect upon marriage. The existence of marriage predates progressive income tax and joint returns. Nevertheless, levels of marriage incidence in modern society should depend on tax structure. Divorce costs probably vary directly with the number of immature children, thus, the index used by Freiden is not so appropriate for his higher-age groups. The notion that the "likelihood" of marriage increases the greater the difference in joint and individual household production is appealing but somewhat lacking in rigor.

Radical changes, up and down, have taken place in the estimates of growth in total factor productivity in the U.S. made by different economists, or by the same economists at different times. If such estimates provide ‘some sort of measure of our ignorance,’ as Abramovitz once put it, we seemed to be a lot less ignorant in 1927 (when Cobb and Douglas published their famous paper), or in 1967 (when Jorgenson and Griliches published theirs), than we were in the years between (when Schmookler, Abramovitz, Kendrick, and Denison completed their studies), or than we are today (when we have, or will soon have, revised estimates by Denison and by Kendrick, and new estimates by Christensen and Jorgenson). Viewed in this perspective, many questions may be raised about the significance of the current estimates that something like a third or more of the rate of increase in U.S. national output is ‘due’ to increase in productivity, as well as about the concepts, data, and methods that underlie the estimates. A list of particular subjects worth considering for research is given and each is briefly discussed. [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 a list of conferences to be held on various topics, from December 27-29, 1963 in Boston, Massachusetts as part of the 76th Annual Meeting of the American Economic Association. A meeting on the theme Principles of Efficiency to be presided over by Paul A. Samuelson of the Massachusetts Institute of Technology. The papers to be discussed are The Measurement of Waste by Arnold Harberger and The Efficient Allocation of Capital by Jack Hershleifer. A meeting on the theme Re-Appraisals in American Economic History to be presided over by Douglass North of the University of Washington. The papers to be discussed are A New Look at Hunter's Hypothesis about the Ante-Bellum Iron Industry by Peter Temin, Ante-Bellum Interregional Trade Reconsidered by Albert Fishlow and Canals and Development -- A Discussion of the Issue by Roger Ransom. A meeting on Comparative Costs and Economic Development to be presided over by C. P.Kindleberger of the Massachusetts Institute of Technology. The papers to be discussed are The Experience of India by Wilfred Malenbaum, The African Situation by Walter A. Chudson and The Case of Brazil by Werner Baer.

The article presents authors' comments on three research papers on economic development after Second World War by economists Erik Lundberg, George H. Hildebrand and Shigeto Tsuru. These papers point out some striking contrasts among the experiences of countries including Scandinavia, Japan and Italy and the postwar experience of the U.S. For example, these papers insistently raise the question why the U.S. has done so poorly in achieving stable and rapid growth. They discuss whether it is a matter of economic structure, or partly a fault of economic policy. Research paper by Hildebrand provides a summary both of the Italian postwar economic achievement and of Italy's still pressing problems of unemployment and incomplete development. But there are aspects of his analysis that needs to be questioned. Moreover, papers of Hildebrand and Tsuru gave the impression that something of a catching-up process has been important in the Italian and Japanese economies. In his paper Lundberg drew attention to some destabilizing effects of governmental action in Sweden. They refer to public investments or publicly controlled investments as an instrument of anti cyclical policy.

On March 24, 1959, the U.S., Senate and House directed the Joint Economic Committee to conduct a large-scale investigation into the problems of maximum employment, an adequate rate of economic growth and the maintenance of price stability. On January 10, 1960, less than a year later, the Committee and the staff assembled for the purpose concluded its task, having published a Committee Report. It will be some time before the profession has managed to digest the enormous volume of material. This article is particularly concerned with the two central documents, the Committee and Staff Reports. There is a vast amount of useful analysis in the Staff Report and , the hearings and the study papers. The center topics are difficult and complicated in the extreme. There are marks of haste and insufficient integration throughout the Staff Report, insufficient time is the obvious source of many of its shortcomings. Bluntly put, it was ridiculous to expect that a staff could be assembled, hearings held, study projects assigned, and the whole enormous resultant mass digested, in less than a year. Viewed against the background of this limiting factor, the Staff Report emerges as a remarkably good performance.

The article presents a critical discussion of the two papers by Edgar M. Hoover and Joseph Shister on the factors related to investment for the individual firms. According to the author Hoover has demonstrated considerable dexterity in weaving into his model several of the more important institutional characteristics. But Hoover seems to stop short of asking the significant questions relevant to economic growth. The really important one would seem to be, do the institutional changes outlined make for more or less capital accumulation? The author remarks that if one fully accept the analysis as realistic of firm behavior, what changes are portended in the rate of economic growth? Turning now to Professor Shister, the impression which is immediately gained from his paper is the breadth of its scope and the transparency of its composition. Shister chose to deal with his subject on an over-all level, relating union practices and policies to the growth pattern of the American economy as a whole. This approach has both its merits and its shortcomings.

The purpose of this paper is to report some tentative conclusions concerning the growth of the service industries and to indicate some implications of this growth for the economy and for economic analysis. Between 1929 and 1963 employment in the service sector grew 1.7 per cent per annum faster than in the goods sector. At some point during the past decade the United States became the first "service economy" in the history of the world, that is, the first economy in which more than half of the employed population is not involved in the production of tangible goods. The more rapid growth of services was observed for individual industries as well as the sector aggregates and for occupations as well as industries. This shift represents an acceleration of a trend that has persisted for at least the past century. Numerous conceptual and statistical problems in the measurement of real output make it difficult to explain precisely why service industry employment has grown so rapidly. The data examined in this paper appear to reject the hypothesis that the growth of real income per capita was a major explanation. The demand for services, compared with goods, may have been slightly more elastic with respect to income (principally because of the low elasticity for agriculture), but this was not an important reason for the shift of employment. Sector differences in the rate of growth of real output were probably very small; differences in the rate of growth of real output per man were probably very large. The differential in the rate of growth of real output per man reflects a moderate differential change in productivity, in the sense of efficiency in the use of resources, but this is not the only or major explanation. It also reflects a more rapid decline in hours per man in services, a more rapid rise in the quality of labor in goods industries, and a more rapid rise in capital per worker in the goods sector. The shift of employment to services has many important implications. The trends discussed here may be offset by other changes that are also taking place in the economy, but they serve to indicate the likely effects of the relative growth of services, other things remaining the same. These trends include: 1. Growing employment opportunities for women and older workers. 2. Growing opportunities for part-time employment and urban sell-employment 3. Growing need for workers with more formal education. 4. Possible decreasing importance of unions and growing importance of professional organizations. 5. Possible trend toward greater personalization of work. 6. Growing importance of small firms. 7. Growing importance of nonprofit organizations (public and private). 8. Declining relative importance of physical capital. 9. Growing stability in employment and, to a lesser extent, in output. 10, Possible increase in cyclical variability in output per man-hour. In addition to having important implications for the economy, the growing relative importance of the services appears to have implications for economic analysis as well. One problem arises because the consumer frequently plays an important role in the production of services. This unmeasured input can have significant effects on productivity in retailing, health, education, and many other service industries. A second concept that may require further development is that of labor-embodied technological change. When, as in some services, formal education is important and there is job security, the rate at which advances in knowledge affect productivity will depend in part on how fast labor embodying these new advances can be added to the work force. Another point concerns productivity and demand. The flow of production in many service industries is uneven, with sharp peaks at particular hours or on particular days, separated by periods of slow activity. Also, the size of the production run (the individual transaction) is often very small. For these reasons, the analysis of the relation between output and productivity in services will probably have to pay more attention to changes in the timing of demand and to changes in transaction size. The final implication discussed is the likelihood that real gross national product is becoming increasingly less useful for studies of productivity and economic growth, because at high levels of GNP per capita a large fraction of productive effort is devoted to services (where real output is often very difficult to measure) and to other activities, such as "do-it- yourself," that are not measured at all. In the future, we shall probably find it necessary to develop auxiliary measures of "output" and economic welfare to be used in conjunction with the gross. national product. [ABSTRACT FROM AUTHOR]

The article discusses the work of Hans Heymann, John H. Kaufmann and Wilfred Owen on transportation and economic development in the U.S. Heymann's paper is concerned with the necessity of air transport, and therefore refers only to the prestige allure of an international service. This is political economy through the looking glass. Instead of the classical end of greatest wealth and the classical means of, this is what one does, it should start with, this is what one does and end with greatest wealth subject to this constraint. The most obvious is a tendency to reduce the importance of international specialization. This may be wise, in the sense that the area previously specialized in some product which is due to become a drug on the international market. It may be unwise, in the sense that the country has overwhelming comparative advantages and disadvantages. The tendency to reduce international specialization may be the occasion for a growth, or an accelerated growth, in real income-due to the application of a dynamic policy in an area which is customarily viewed by economists as a problem in comparative statics, or it may impede or even reverse economic growth.

The author comments on the article "Commercial Banking in the Sixties," by Paul S. Nadler. The article centers on the over-all growth of the commercial banking system in the 1960s as compared with growth in the gross national product (GNP). According to Nadler, that commercial banking deposits will not grow as fast as GNP, which results in the conclusion that other financial institutions will necessarily grow more rapidly than commercial banks. The author explains that he agrees with Nadler's findings.

The decade of the seventies thus far has witnessed a considerable amount of legislative attention directed at rural areas. Under the general heading or rural development no fewer than 48 bills were introduced in the first session of the 92nd Congress in the House of Representatives and 22 bills were introduced in the U.S. Senate. Few of these became law but the sheer numbers give some indication as to the political importance of the issues involved. The purpose of this paper is to focus on a portion of one of the most important pieces of rural development legislation, the Rural Development Act of 1972 (RDA-72). This article traces the legislative history and the philosophical assumptions of RDA-72 with particular regard to the provisions of rural industrialization in the U.S.

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.

A regional development program will suggest different things to different individuals, and to all it is likely to suggest not a single program but a number of related programs focusing on a common objective. To a staff member of a development agency, a regional development program implies literally scores of individual programs ranging from those involving engineering projects to those basically educational in nature carried out co-operatively with educational and other regional institutions. Since these programs are neither comparable nor amenable to uniform methods of analysis, a complete discussion of criteria for their evaluation cannot be attempted in a paper such as this. Regional development purposes will be defined as a process resulting in a secular growth of regional output or real income. This, of course, is less than a comprehensive definition of regional development as many intangible aspects of development are not susceptible of measurement by a monetary yardstick. This growth can occur autonomously. It may be influenced also by the impact of national economic expansion imparted through the private sector of the economy. A regional development program, therefore, must be distinguished as an influence exogenous to the normal functioning of the private economy. For the purpose of this discussion, a regional development program will be defined as a public undertaking, most likely a governmental undertaking, one of whose primary objectives is to influence the underlying factors affecting regional output.

The article presents a critical discussion by the author on two papers by Irving H. Seigel and W. Rupert Maclaurin about technological progress and it measurement. The author warns the reader about Maclaurin's potentially dangerous assertion that technological progressiveness cannot be correlated directly with monopoly or bigness. Maclaurin concedes that some degree of monopoly is essential to technological progress. Maclaurin's paper is a signal contribution to the study of innovation in selected industries. It is a commendable venture into an essentially unexplored field. The author's main criticism of the paper is its de-emphasis of policy considerations. In microeconomics there has been in the past, too much emphasis on price competition, for in the absence of technological change there are very, very narrow numerical limits to price reduction by the firms. By contrast, as a consequence of process innovation, the reduction of unit cost and price may be numerically very large indeed.

The article focuses on the author's views on the proportion of net capital formation which includes net additions to construction, producers' durable equipment, inventories and claims against foreign countries to national income or net national product, for totals in current prices, about 13 percent for 1869-1928. If one includes the following decades of depression, war and the few postwar years through 1948, the average drops to about 12 percent. For totals in 1929 prices, percentages are 14 for 1869-1928 and 12 for 1869-1948. In groping for an answer to the question for the economy in peacetime, my first attempt was to link it with the technologically determined ratio of capital to output and with the rate of growth in the latter. Conclusions of the discussion in the paper should be viewed as fortified suggestions rather than fully tested inferences, largely because questions raised and particularly answers advanced ramify into wide realms of the economic and social system of the country. In its growth since the 1870's. In a sense, therefore, this paper is an interim report and its conclusions are necessarily subject to amplification and partial revision.

The purpose of the paper was to provide an objective and systematic appraisal of the capacity of black-owned commercial banks to finance economic development in the black community. This appeared to be a vital task at the time since these institutions were being formed at an accelerated rate with that specific aim in mind. On the basis of the evidence analyzed (virtually all of which was newly generated information available only through Federal bank supervisory agencies), I concluded that black banks were not viable instruments of economic development. However, I also concluded that they could perform some minor services of benefit to their local areas, and they could serve as symbols of black achievement. As an alternative source of financing, I proposed a domestic version of the existing Edge Corporations. These are subsidiaries of U.S. commercial banks formed for the purpose of conducting foreign financial activities. Among the latter, they can have varying amounts of equity investments in non-financial enterprises abroad. It was this feature which I thought offered promise as a means of expanding the availability of risk-bearing funds in black communities. [ABSTRACT FROM AUTHOR]

Given the tempo of this movement and the enormously important economic development role which the black banks are expected to undertake, it appears vital that an objective and systematic appraisal be made of the capacity of these institutions to perform this task. This paper is devoted to such an assessment. [ABSTRACT FROM AUTHOR]

The article discusses a financial framework for economic growth in the United States. The article presents a unified financial counterpart to a long-term economic projection. Based on assumptions of varying rates of growth, a set of projections of economic activity in 1970 is presented. A "judgment" model will be selected based on the results of the projections. The article then introduces a theoretical framework that links levels of economic and financial activity. By using the "judgment" model as a reference, the pattern of relationships will be applied to a projection of assets and liabilities for the individual components of the financial network.

The article presents commentary on the address "Long-Term Trends in the Financing of Regulated Industries, 1870-1950," by Melville J. Ulmer, "Trends in Capital Formation and Financing in Agriculture," by Alvin S. Tostlebee, and Sergei Dobrovolsky's "Capital Formation and Financing Trends in Manufacturing and Mining, 1900-1953," all included within the issue addressing the development of the U.S. capital market. The application of the historical data to the development of other countries is discussed, outlining implications of U.S. economic history on general financial theory.

This article presents an examination of how markets in Taiwan present new opportunities for American businesses. The author discusses the efforts made by the U.S. to increase their number of trading partners in Europe and the Far East. The author examines the investment climate of Taiwan, discussing the advantages and disadvantages that the country presents when compared to other underdeveloped countries. He examines the country's economic growth, industrial development and overall political climate. He discusses Taiwan's government policy for foreign investment and various import and export restrictions.

The development of this paper was supported by a grant from the U.S. Office of Economic Opportunity to the Project on the Economics of Discrimination at the University of Maryland, with which the author was formerly associated The paper was completed at M.I.T. in the summer of 1973. I am grateful for comments by Robert S. Browne, Vernon Dixon, and several anonymous referees of this Journal. For an earlier, more abbreviated survey of the subject and a complementary bibliography, see Spratlen [169, 1971]. [ABSTRACT FROM AUTHOR]

The question of outdoor recreation has received considerable attention in recent years. In spite of the growing importance the economics of outdoor recreation have been almost completely neglected except for the relatively esoteric questions of whether the benefits to society from outdoor recreation can or cannot be measured. This is unfortunate, for economic analysis has much to contribute to society's stake in outdoor recreation and, conversely, a thoroughgoing economic analysis of outdoor recreation reveals some very interesting theoretical and methodological questions having ramifications in other areas of social policy. This paper explores several economic aspects of outdoor recreation including: first, the economic rationale for the public provision of outdoor recreation, second, the resource management problems encountered in supplying such services and third, optimum financing policies for publicly-supplied recreation. Outdoor recreation, the great out-of-doors, is an important part of the American heritage and a legitimate concern of government. Public ownership and operation can be justified quite dispassionately and it can be put on a perfectly sound financial basis. Over the long run this approach is more likely to protect and promote this heritage than is the usual wholly emotional appeal to non-economic criteria.

The article examines the status and role of private investment in the American economy in 1940. Investment opportunities in 1940 are very limited, that is, provided measures to expand power of consumers are vigorously pushed forward. Discussion in this paper is only limited to phases of the long-run investment problem. The role of inadequacy of plant and equipment as an important factor limiting economic expansion was investigated. The economic frontier most able to provide a large-scale permanent outlet for investment funds is determined.

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.

The article focuses on aggregate production functions and medium-range growth projections in the U.S. The conceptual basis for believing in the existence of a simple and stable relationship between a measure of aggregate inputs and a measure of aggregate output is uncertain at best. Yet an aggregate production function is a very convenient tool for theoretically exploring some determinants of economic growth; and it has served as a framework for some interesting empirical studies. Moreover, in an attempt to assess the growth prospects for an economy, to identify variables that are likely to determine the growth rate and to examine policies affecting growth, the explicit or implicit use of an aggregate production function is almost indispensable. In recent years, economists have developed a variety of aggregate production functions. Several of these models are quite similar in basic conception but focus on different variables or make different assumptions about the interrelationships of variables. The purpose of this paper is to try to place several of these models within a general framework so that their assumptions and implications can be compared and evaluated.

The article focuses on econometric growth model of the U.S. There has been increasing concern among academic economists and other interested parties during the past several years about the related problems of economic growth and what appears to be an undesirably high plateau of persistent unemployment in the economy. The rates of growth of capital formation and output in the U.S. have been compared unfavorably with those of both the Soviet Union and the resurgent economies of Western Europe. At the same time, the recent tendency of the unemployment level in the U.S. to remain above 5 per cent of the labor force even during comparative boom periods has been a matter of some consternation. Whether the first problem exists or can be simply attributed to the free market's reflection of a utility function which possesses a positive time preference for current output as opposed to the future production of goods and services, and whether the second problem can be blamed upon such disaggregated factors as technological changes, shifts in demand, and labor immobility are questions which it is hoped can be at least partially answered in this paper.

The article presents a discussion related to technical progress, capital formation and economic growth in the U.S., a paper written by Edward Denison. Denison has tackled the question in more specific terms by stating his opinion that without any change in policies, except those needed to maintain fairly full employment, the growth rate would be quite high for the economy of the U.S. Denison's computations are therefore not merely an academic exercise in applied growth theory but they are actually used in evaluating the feasibility of that objective and considering policies needed to achieve the objective. Denison himself believes that such an increase in the rate of growth could be achieved if the nation considers that it is an important objective. Denison has made an arithmetic allowance for the effect of starting from a below full employment level. This effect is obviously small spread over a twenty-year period. Some of the changes which Denison believes require far-reaching policy measures would result from continuing a full employment expansion in aggregate demand.

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.

In the last few years the U.S. has become increasingly conscious of its educational program and policies. Not only have Congress, state legislatures and local bodies paid greater attention to this issue, but large numbers of books, articles, talks and academic studies have also been devoted to it. This concern has been stimulated by developments in the cold war which apparently have increased the power of Soviet Union relative to the U.S. This paper discusses the contribution of college graduates to economic growth and military technology. The economic effects of education can be divided into the effect on incomes of persons receiving education and the effect on incomes of others. The limited available evidence did not reveal any significant discrepancy between the direct returns to college education and business capital and thus direct returns alone do not seem to justify increased college expenditures. This puts the burden on external or indirect returns since they would have to be important to justify increased expenditures.

Two noteworthy and paradoxical features of the behavior of employment in the U.S. since 1947 may serve as the starting point of this investigation. One is the 754 million increase of civilian employment during thirteen years, the other is the persistence of a high level of peacetime unemployment-one that has risen in three recessions to over 6 percent and even approached 8 percent briefly and in December, 1959, equaled 5.2 percent of the civilian labor force. This paper focuses on the significance of this recent unemployment. A certain amount of unemployment, it is sometimes implied, is of positive value for stimulating economic growth and checking inflation. Rates of advance of output, wages and prices were related to levels of unemployment. Real gross national product (GNP) advanced more rapidly the higher the level of unemployment and this more rapid advance of GNP seemed due to more rapid advance of real GNP per worker. The higher the unemployment level the less the rise of wages and prices. Rapid growth and stable prices are not presently compatible with a really low level of unemployment.

The article serves a useful function in pulling together an extensive factual picture of the role of consumer installment credit in the American economy. Most of the arguments, pro and con, regarding selective controls were familiar to all students of monetary policy. The length of the article gives the casual reader a somewhat exaggerated impression of the complexity of the subject. There is a great deal of duplication, arising in part from the way in which the work was organized and prepared. Much of the material, while interesting and useful, has little relevance to the question of selective controls toward which the article is supposedly oriented. Actually there is considerable agreement concerning some of the basic issues. Some of the material in the study has not been referred to in this review, except incidentally. The opinions of the consumer credit industry are of some interest. As might have been expected, the vast majority of the industry is opposed to selective controls. Some of the observations made, however, even by those opposing regulation, seem to support the view that consumer credit is insensitive to general credit controls.

The article presents discussion on the monetary aspects and interrelation between monetary developments and saving and investment. Institutions with varying functions for handling the public's funds have played an increasingly important role in influencing the rate and direction of money flows in the economy. Their impact on the volume and use of credit has become more closely similar to that of banks. Their potential influence upon the maintenance of economic growth and stability is very great. This has resulted in an increasing emphasis on the study of these institutions as an integral part of the study of monetary developments. The article focuses on the impact of controls on debt, and through them on the economy. Present general monetary measures-discounts, open market operations, and changes in reserve requirements-apply to commercial banks. They do their work through their effect on the reserves of commercial banks The impact spreads from banks throughout the economy, depending on the operation of the commercial banks under our so-called "private enterprise system."

In this article the author argues that in an important sense the stability of the distribution of national income by type has indeed been maintained in quite striking degree, aside from cyclical movements. However, it is important to understand the sense in which this is so, and much of the paper is directed to this end. It is found in several studies that the move towards less dispersion in the size distribution of income has resulted in part from a relative reduction in the sources of income which are of disproportionate importance to upper income groups. The distribution of income by types is thus found in one context to contribute importantly to a very marked lessening of relative income differences while in another it can be viewed as substantially stable in the long run. This is due to the use of different income concepts and to consideration of separate sectors of the economy as against treatment of the economy as a whole. The author tries to indicate the significance of these differences.

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.

This article focuses on the economic development of a nation. Not only does economic development command more discussion in its own name than any other economic subject before the United Nations and other international organizations; it is impossible to debate or pass a resolution on other subjects, for example, full employment, without also again giving consideration to economic development. Despite all the excesses of oratory and polemics which have been uttered in the name of economic development, it would be a great mistake, lightly to dismiss the reality and the intensity of the "drive" for economic development. It is prestige and economic nationalism, political nationalism, and standards of living all mixed together. It is intimately linked with the stirrings toward greater political self-government or independence among the peoples of many of the underdeveloped areas of the world. In this period of ferment, the aspirations toward economic development take on significance for political and security reasons.

The purpose of this paper is to investigate the sources of economic growth in Japan and in compare the results with those in the U. S. and Europe as studied by E. F. Denison. The method used by Denison is followed as far as possible. The character of this paper is of fact finding, and the interpretation of results or the originality of methodology is not dealt with here. The results may be summarized as follows. (1) Japan's growth rate is two times that of Europe and three times that of the United States. (2) The contributions of labor, capital, and the residual to economic growth are all higher for Japan than for the U. S. or Europe. (3) Factors which account for the higher contribution of labor to economic growth are (a) the higher rate of increase in employment, (b) less shortening of working hours, and (c) improved age and sex composition. (4) Factors which account for the higher contribution of capital to economic growth are a higher rate of increase in capital input and the high elasticity of production with respect in capital. (5) Other notable points include: (a) the contribution of education is lower for Japan; (b) the capital-labor ratio in Japan increased remarkably; (c) capital's share of national income is higher; and (d) 60% of Japan's economic growth is accounted for by the residual. [ABSTRACT FROM AUTHOR]

This paper is a part of a larger study of economic growth in Canada, following the methods developed by Edward Denison in his book The Sources of Economic Growth in the United States and the publication Why Growth Rates Differ. The new material in this paper relates to Canada and the Canadian/U.S. comparison, while the material on Northwest Europe is drawn from the Brookings study. The present paper sets out the results to date on the differences in real output per employed person between Canada and the United States for one year, 1960. At this stage in our research the results indicate that the level of real output per employed person in Canada was about 20 per cent lower than in the United States in that year. On the basis of historical output data, it would appear that this margin of difference in Canadian/U.S. product levels has persisted throughout the present century. The central part of this paper examines the significance of differences in factor inputs in Canada and the United States and their contribution to the difference in income. The level of inputs per employed person in Canada accounts for only about 2 percentage points of the income difference between Canada and the United States. These results indicate that the overwhelming part of the difference in output per employed person between the two countries reflects the differences in output in relation to total factor inputs, rather than the magnitude of other factor inputs used in combination with labour. This result is consistent with earlier studies by Denison and others which have indicated the crucial importance of output in relation to total factor inputs, both in output growth over time and intercountry comparisons of output level. The body of the paper can give only brief attention to the numerous conceptual and statistical questions that arise in such a wide-ranging study, and the authors do not pretend to have tackled, let alone resolved, all of the wide range of problems related to this study. Nor do they claim any high degree of precision for the results, especially in the light of the statistical limitations of the basic data. [ABSTRACT FROM AUTHOR]

This paper reexamines the conclusion made by Rosemary D. Hale, in a study of the total cookware industry in the United States, that the evidence she presented did not support contentions that vertical integration, by acquisition, negatively affects the economy. It is argued that the conclusion was based on a too broad definition of the market and a lack of familiarity with the historical development of the relevant market. The relevant market defined in this paper is the financial interest of Aluminum Company of America (Alcoa) in two aluminum cookware companies: wholly-owned Wear-Ever Aluminum Inc. and partially-owned Mirro Aluminum Co. A reexamination of the effect on merged firms and competitors, and the impact on technology confirms that the study does support contentions on the deleterious effect of vertical integration on economy.

The article summarizes findings on the nature of long swings or Kuznets cycles in the growth of U.S. population and labor force and on their apparent cause-effect relations in the period prior to World War I to similar movements in the rate of economic development. Many of the findings for population and labor force are based on the decennial population censuses of 1870 to 1950. The timing of the censuses during this period occurred sufficiently close to turning points in the demographic swings to permit use of this valuable detailed source. The growth of both population and labor force has been characterized by roughly synchronous long swings since at least 1870 and probably since early in the nineteenth century. The swings were typically of substantial amplitude and averaged around 15-25 years in duration. The color-nativity components of population and labor force reflect the predominant influence that immigration has typically played in the swings. Historically the swings are most apparent in the growth of the foreign born population and labor force.

This paper considers the allocation of national technological resources to different sectors of the economy. The impact of economic investments in technology is related to national, industry, and company growth. In some sectors of the economy investments in research and development (R and D) are well below the saturation level, where increasing the investment level and fraction of scientific and engineering manpower devoted to R and D may be expected to yield increased economic growth. A comparison is made of the sources and consumers of R and D funds in the U. S. and Israel, particularly as related to size of firms. Conclusions are obtained in the form of magnitude and allocation of R and D investments and utilization of scientific and engineering manpower for industrial R and D in Israel. [ABSTRACT FROM AUTHOR]

Several recent studies have described in some detail the factors limiting development in major countries.[3] Each shows the external sector to have been a critical element in explaining past difficulties and in determining future prospects. In addition, each points to a number of internal limitations and gives some analysis of the interaction between the two sets of factors. The present paper will utilize some of the insights from these studies to develop an aggregative model that brings out the relations between the internal and external factors in economic development. The model will be used for three purposes: (1) to interpret recent development performance, (2) to indicate in quantitative terms some of the requirements of accelerated growth, and (3) to provide a framework for the discussion of alternatives facing the United States and the Latin American countries. One section of the paper is devoted to each of these topics. [ABSTRACT FROM AUTHOR]

When the 10 percent income tax surcharge was enacted in the summer of 1968, there were many forecasts that this tax increase would significantly dampen economic growth and reduce the rate of increase of prices. There was even some fear that the tax increase coupled with the expenditure ceiling that the U.S. Congress imposed would overkill the inflation and produce a recession. Economic events did not match these predictions. This paper will attempt to identify the reasons why the forecasts for 1968-69 were in error. Conditional forecasts will be derived from simulations obtained from the FRB-MIT econometric model using a variety of assumptions about alternative public policies. The analysis permits to determine whether the forecast errors might have been attributable to inaccurate predictions of public policy. According to authors, the ex ante forecasts of GNP were affected by (1) the failure to predict the mid-1968 easing of monetary policy and (2) the misestimates of federal spending which exceeded the ceiling.

Presents information related to several articles on economics. Economic growth and productivity in the United States, Canada, Great Britain, Germany and Japan in the post war period; Dividend policies of electric utility firms; Relationship between the quantity of materials imported by the United States and the level of industrial production and prices of imports.

A large amount of literature on the theory of economic growth has been preoccupied with a variety of growth models analysing somewhat artificial problems by employing a high level of abstraction. Some attempts, however, have been made to add contents to these boxes. The empiricists have been interested mainly in the fundamental problem of identifying quantitatively the sources of productivity growth. Initially these studies were restricted to the contributions of the classical inputs: i.e., labor and capital in physical quantities. The results suggested that the contribution of these classical inputs was not quantitatively large. A large residual remained to be explained. To account for this large residual, research moved into two somewhat different directions. On the one hand, qualitative aspects of the classical inputs were subjected to quantitative analysis. On the other, new factors, such as 'education' and 'research and development' were introduced into the framework. Few efforts have been made to develop an explicit relationship between these two approaches. The present paper is an attempted marriage, one hopes a happy and contagious one, between the qualitative aspects of the classical inputs and the new exogeneous factor. Accordingly, we provide a quantitative estimate of the impact of education, (education defined in terms of school years) on the efficiency of labor. The finding is that this impact is positive, and the elasticity of labor efficiency with respect to schooling is around 1.6. The plan of the paper is as follows. We first outline a generalized production function. In Section 2 a labor efficiency education function is developed which defines the impact of education on labor efficiency. Section 3 outlines the model and analyses the conditions for identification. An empirical estimate based on time series data for the United States non-farm sector is presented in Section 4. We postulate a general production function, namely, x[sub 0, sup -p =... [ABSTRACT FROM AUTHOR]

The article presents a paper that offers an alternative explanation for the purported inability to make better use of the expanded productive capability which provides the base for an "affluent" life style. It is suggested that inability to understand the ethical questions raised by a high rate of economic growth and failure to make the institutional adjustments that would humanize the contemporary economic process derive in part from neglected but critical developments in economic thought and social philosophy. Now according to those who are critical of the life style of affluent America, it is obvious that economic activity as carried out in contemporary society does not achieve that ideal terminus which, according to the philosophic presuppositions of classical economics, ought to be the end result of such activity. As a matter of historical fact, the economy seems to have been forced into a developmental path which permits economic activity to escape its proper subordination to the "good life" of man. Theologically, one might argue that this tendency for economic activity to degenerate into a process which degrades man is but part of that tragic train of events which entered human history as the consequence of sin.

This report discusses the puzzling behavior of unemployment in the U.S. in relation to real gross national product during the first half of 1974. From the fourth quarter of 1973 to the second quarter of 1974, the unemployment rate rose only from 4.7 to 5.1 percent, in the face of a 2 percent decline in real gross national product. The author cites previous instances in which unemployment was surprisingly low relative to output; these generally emerged in the late stages of economic expansion, when output slowed down and yet firms kept adding to employment in response to their previous experience and continuing buoyant expectations. Much the same behavior may have marked the first half of 1974. Firms interpreted the decline in output as a temporary interruption of economic growth caused by the oil embargo. In the author's judgment, these overly optimistic expectations, reinforced by encouraging income statements that reflected capital gains on inventories, produced unusually strong demand for labor during much of 1974. Businessmen now appear to be engaged in an agonizing reappraisal of the severity of the slump, and are likely to cut employment sharply in the months ahead. The author expects the unemployment rate to move further upward and cross 7 percent by mid-1975, even if real output does not fall further.