ALBERT

Notes: Why did peacetime government shares of total spending double in a number of Western economies between 1910 and 1938? The widely separated dates for the introduction of universal manhood suffrage and the evidence of a rise in protection during the inter-war period indicate that neither democracy nor globalization can explain this development. This paper reexamines two other explanations, namely, (1) a shift in the demand for public goods and (2) a war-induced willingness to share with one's fellow citizens. By introducing into Schelling's (1978) Multi-Person Dilemma a learning game whose payoffs change endogenously, we provide theoretical explanations for this transformation. We then test the resulting propositions with data on public spending as a share of GNP for the U.S., Canada, the U.K., Germany and Denmark, from the 1870s to the 1930s. In each case, we find no unit root but a break in trend, a result shown to favor explanation (2) over (1).

Notes: The idea of a single-owner who owns the opposing interests of a dispute has been suggested in the literature to make the Coase Theorem operational in resolving dispute. This paper points out that the idea implicitly assumes the existence of an overriding authority, e.g., the Courts, to implement the solution. When such an overriding authority does not exist, a different rationale must be employed to make the single-owner apparatus work. This insight is explored and then applied to help resolve the Taiwan Strait Conflict. Specifically, a ‘One China, Two Republics’ policy is proposed and its implications illustrated.

Notes: The empirical literature on border effects suggests that national borders substantially reduce the level of economic transactions. This paper adds another piece of evidence to the significance of border effects by applying a new data set which is completely independent of the data sets of previous studies. Our data refer to domestic and international passenger departures from German airports. The econometric results indicate that the German border reduces passenger air traffic by a factor of four to five. This magnitude is in line with the results of previous studies for trade and investment flows.

Notes: This paper examines the relationship between intra-firm wage dispersion and firm performance in large Belgian firms using a unique matched employer-employee data set. On the basis of the Winter-Ebmer and Zweimüller's (1999) methodology, we find a positive and significant relationship between intra-firm wage dispersion and profits per capita, even when controlling for individual and firm characteristics and addressing potential simultaneity problems. Results also suggest that the intensity of this relationship is stronger for blue-collar workers and within firms with a high degree of monitoring. These findings are more in line with the ‘tournament’ models than with the ‘fairness, morale and cohesiveness’ models.

Notes: This paper provides systematic evidence for both the cross-country and sector-independent validation of political-economic theories used to explain changes in national property rights arrangements. A political-economic model for privatization will be developed and then tested on progress in large-scale and small-scale privatizations in 14 Central and Eastern European transition economies between 1994 and 2000. It will be proven that divergent levels of progress in large-scale privatization can be explained to a large extent by the structural and financial constraints on political decision-makers and varying national interest group constellations. Small-scale privatization is not significantly determined by political constraints and interest group pressure. This finding supports the assumption that the relative merits of different theories to explain changes in property rights arrangements depend crucially on the specific conditions of initial property arrangements.

Notes: Under reasonable assumptions about production technologies, international competition for factors of production will lead to convergence of per capita output. Is there an analogous process that leads to convergence of public sector activity? We provide a simple model that predicts convergence in government spending under certain assumptions. We show that Barro's (1990) model of endogenous growth with government spending provides one justification for the necessary assumptions and therefore supports the convergence hypothesis. We also discuss the possibility that increasing globalization has led to convergence in government spending. Our cross-country empirical investigation provides compelling evidence of convergence in per capita government consumption spending, per capita government capital spending, and per capita government education spending. These findings provide a new framework for explaining the underlying dynamic forces that determine growth of government.

Notes: Using a simultaneous equations framework with a comprehensive set of publicly listed Swiss companies, our findings suggest that the size of the board of directors is an independent corporate governance mechanism. This implies that any potential relationship between board size and firm valuation is indeed causal. However, in contrast to previous studies, we do not uncover a significant relationship between board size and firm valuation, which can be interpreted as support for the hypothesis of the existence of an optimal board size. On average, firms choose the number of board members just optimally. This indicates that cross-sectional variations in board size to a large extent reflect differences in firms' underlying environment, and not mistaken choices.

Notes: This paper investigates the relationship between making additional payments to the state for student loan (via the Higher Education Contribution Scheme) and child support (via the Child Support Scheme) and compliance with tax law. Data are taken from the Community Hopes, Fears, and Actions Survey based on a random sample of 2040 individuals. Additional payments were found to pose a compliance problem for tax authorities. At the same time, this study demonstrated that perceived deterrence, moral obligation and possible trustworthiness play significant roles in reducing tax evasion. An important finding to emerge from this study is that tax evasion is more likely to accompany additional payments when personal income and belief in trust norms are low. The finding of greater tax evasion among economically marginalized groups has been demonstrated in other contexts, but the adverse effects of becoming irreconcilably socially marginalized from legal authority has tended to be both undervalued and under-theorized in the taxation compliance literature.

Notes: There is widespread belief among economists that the separation of ownership and control tends to reduce the performance of companies while competition tends to improve it. Irrespective of their theoretical appeal these assumptions have not been tested very often. Using an unbalanced panel of about 300 German wineries (compiled from four different editions of a highly respected and widely used wine guide), the paper shows that firms run by ‘managing directors’ produce higher quality and more expensive wines than otherwise identical owner-managed firms. Since firms have identical production functions and due to the intense competition in the sector under consideration it is very likely that differences in human capital explain the observed productivity differences.

Notes: From the viewpoint of Public Choice theory, the logic of electoral competition makes it difficult for rational, self-interested politicians to advance unpopular reforms. As political decision-makers have primarily the aim of re-election in mind, ‘inconvenient’ scientific policy advice often falls on deaf ears in the political arena. This implementation problem has been widely discussed in political science, economics, and related social sciences. Complementary to this qualitative dimension, the present paper uses insight from the economics of innovation to analyze the quantitative dimension of policy advice. It is assumed that additional expert opinion is only requested whenever it increases a politician's chance to become re-elected. This simple politico-economic reasoning, it will be argued, induces a systematic under-and overinvestment in policy advice, which is inefficient in terms of social welfare. After discussing the advisor's role in this framework, the paper concludes with a brief presentation of possible remedies to dilute these undesirable incentive effects. The theoretical reasoning will be illustrated by the case of Germany where problems of policy advice have become apparent in recent years.

Notes: A common finding of recent theoretical and empirical literature is that corruption has a negative effect on economic growth. In the paper, through growth regression analysis, we estimate the direct and indirect effects of corruption on economic growth. The indirect transmission channels, specifically investments, trade policy, schooling, and political stability, analysed in our study prove to be significant in explaining the deleterious effect of corruption on growth rates. We find that one standard deviation increase in the corruption index is associated with a decrease in investments of 2.46 per centage points, which in turn decreases economic growth by 0.34 per cent per year. The second, by importance, transmission channel is openness: a standard deviation increase in the corruption index is associated with a decrease of the openness index by 0.19, resulting in a decrease in economic growth by 0.30 percent per year. Jointly, the transmission channels explain 81 per cent of the effect of corruption on growth. While combating corruption is a long-term task, an understanding of the transmission channels, through which corruption affects the economy, may suggest ways to limit corruption's negative, but indirect, effects on growth.

Notes: Field experiments in which bogus pairs of transactors test for discrimination by applying for employment or housing, or by trading in product markets, have been widely-published during the last decade. However, no detailed justification has been provided for the deception involved. The general lack of veracity in the market-place, the social harm inflicted by discrimination and the superior accuracy and transparency of this technique justify deceiving the subjects of experiments. Deception of testers, however, may do them harm, contravenes the ethical standards of psychologists and sociologists and is unnecessary, as alternative procedures are available to deal with ‘experimenter effects’.

Notes: A number of proposals for a tax on the international trade with weapons have been made during the last 25 years, most recently prior to the G-8 summit in Lyon, France, in June 2003. Originally, the major objectives were both to reduce the level of trade in arms and raise money for purposes such as development and disarmament. Later proposals included the compensation of victims of the use of specific types of weapons. Various objections have been raised against the suggestions for an international arms trade tax. Major points include the difficulties of achieving sufficient levels of compliance, tax evasion through increases in domestic production and a stimulation of the illicit trade in arms. There are also fundamental objections against demeritorizing arms transfers only, and not also domestic production of arms. In order for an international arms trade tax to work, the level of transparency in the international arms trade would need to increase. A major part of the tax burden would be borne by buyers of arms, who are predominantly developing countries. However, these are currently also major beneficiaries of large-scale subsidies on arms exports. An international arms trade tax will lead, using available estimates of price elasticities, to an increase in expenditures on arms import. Transfers from a fund fed by an arms trade tax should be spent in those countries which substantially reduce their spending on arms imports. In general, an arms trade tax makes more sense as a measure for disarmament than as a measure for development.

Notes: This paper explores a unique new source of social valuation: a market for bodies. The internet hosts a number of large synthetic worlds which users can visit by piloting a computer-generated body, known as an avatar. Avatars can have an asset value, in that users can spend time to increase their skills; these asset values can be directly observed in online markets. Auction data for avatars from the synthetic fantasy world of EverQuest are used here to explore a number of questions involving the relative value of different body characteristics. Hedonic analysis of the auction price data suggests that the ‘level’, a game-design metric that indicates the overall functionality or power of the avatar, is by far the most important attribute of the body. Other attributes that show significant price effects include: sex and class (i.e. being a wizard rather than warrior type of character). The male-female price difference is interesting because there are actually no sex-based differences in the abilities of the avatar bodies, by design. Price differences here must be caused by some other aspect of buyer preferences, ones unrelated to power or functionality of the avatar itself.

Notes: Since quite some time, economists have been aware of the fact that also the behavior of economists generates questions that need to be answered. Why, for example, do economists use an alphabetic ordering of names when they co-author an article? And what determines the success of an academic economist? Or, how does studying economics affect behavior? At the same time, economists have also noticed that the economics profession generates data that can be used to test theoretical ideas proposed by economists. In this paper, the author gives an overview of such research that takes economists and their behavior as a subject of study. He will focus on three topics: the education of economists, the publication habits of economists and the labor market of economists.

Notes: Most social scientists' views of conflict and cooperation in society are shaped by very elementary, one-off, two by two symmetric simultaneous move games like prisoner's dilemma, chicken, assurance or stag hunt. We think that this diet of examples leads to biased accounts in particular of distributional conflict, and therefore suggest that asymmetry in payoffs and move structure be taken into account systematically. In this paper a new paradigm of asymmetric games to study basic distributional conflicts is introduced, illustrated numerically and discussed theoretically. The results of exploratory experiments on the empirical side of the matter are also reported.

Notes: This paper analyses a 2002 survey of the Czech and Slovak Republics, and more limited surveys of Hungary and Poland to conclude that tax evasion is lowest among those who believe that they are getting good quality government services for the taxes they pay. A 20% increase in perceived quality of government services could lead to a 13% drop in the frequency of tax evasion. The present analysis is the first of this sort to indicate that quality of government services influences the willingness to pay taxes. Governments in transition countries who suffer from weak tax collection apparatus may wish to transmit clear information on the quality of their services in order to cut down on evasion.

Notes: We use a recently constructed cross-country data set on absolute poverty to examine whether there is regional and sectoral variation in the relationship between poverty and economic growth. We find that the poverty-growth linkage is strongest in East Asia and that this linkage is essentially driven by growth in the industrial sector. By contrast, industrial growth has had little positive impact on poverty reduction in any other region. These findings are consistent with the notion that East Asia's greater success in poverty reduction lies in its greater openness and market orientation, which created a pattern of labor-intensive industrial growth that led to a rapid growth in employment and poverty reduction.

Notes: This article describes and analyzes the Euro cash changeover process. The European Monetary Union, EMU, is a unique event in history, although other monetary unions were formed and existed long before. Still, this giant experiment makes it possible to study changes in the monetary environment from a unique and new position. The article tries to find factors that can help to explain the different pace of transition between the countries participating in the third stage of the EMU. Even though it was common knowledge that the national currency would lose its status as legal tender at a predetermined point in time, the speed of acceptance of the new monetary standard could not be directly controlled by the relevant authorities. Hence, the whole changeover process was formed as much by the authorities as by the public. The paper focuses on four types of factors that may help to explain the differences in the pace of transition pattern between the countries: network related reasons, technical and logistic reasons, characteristics of the financial and payment systems and psychological reasons. It is found that the initial supply of Euro bank notes (so-called frontloading), the size of the population of the country, the length of the period when the national currency and Euro bank notes were used side by side, and the number of bank branches (per capita) together can help to explain a large part of the variation in the pace of adoption of the new monetary standard across the countries. The first two of these factors support the idea that currency is a network good. Psychological factors, such as nationalism, have not been found to significantly influence the outcome.

Notes: The expansion of economics to ‘non-market topics’ has received increased attention in recent years. The economics of sports (football) is such a sub-field. This paper reports empirical evidence of team and referee performances in the FIFA World Cup 2002. The results reveal that being a hosting nation has a significant impact on the probability of winning a game. Furthermore, the strength of a team measured with the FIFA World Ranking does not play the important role presumed, which indicates that the element of uncertainty is working. The findings also indicate that the influence of a referee on the game result should not be neglected. Finally, the previous World Cup experiences seem to have the strongest impact on referees' performances during the game.

Notes: A paradox is a proposition in (alleged) contrast with common sense. All science is replete with paradoxes. Economics is not an exception. This paper is focused on two widely discussed paradoxes: the Mandeville paradox (and the associated idea of an ‘invisible hand’) and the Prisoners' Dilemma (with the allied literature on market failures). The main tenet of this paper is that they cannot be simultaneously paradoxical, because they state one the opposite of the other. If common sense contrasts with Mandeville, then it must agree with the Prisoners' Dilemma and vice versa. This is what I term the ‘paradox of paradoxes’ in economics, which is a simple consequence of the rarely noticed principle that two opposing propositions cannot be paradoxical at the same time. A tentative way out from this impasse is presented. I claim that economists would gain a better understanding of their profession if they devoted more time to the study of the intuitive or folk economics.

Notes: Transnational Corporations are often accused by non-governmental organisations of ignoring fundamental democratic rights, such as civil liberties and political rights, in the countries of their investments. This paper attempts to explore empirically the complex relationship between foreign investment and democracy in a systematic way, using different econometric techniques. In contrast to the public discussion over recent years and the view held by non-governmental organisations, the results show that enhanced democratic rights are associated with higher foreign investment in the 1990s. Interestingly, this positive link does not hold for the 1970s and 1980s, when a substantial portion of foreign investment went to countries with repressive governments.

Notes: This paper explores the role of media in economic development. In particular, we seek to outline the conditions under which the media contributes to the successful adoption of policies aimed at economic progress. Our core thesis is that successful economic development requires the coordination of efforts by politicians with the interests of the populace on policies that bring about economic growth. However, the nature of the relationship between political actors in charge of reform is characterized by a conflict of interests. The role of media as a key mechanism for transforming these situations of conflict into situations of coordination between politicians and the populace is analyzed. Specifically, we consider four factors — media autonomy, legal structure, quality of the media and consumer demand — and how they impact media as a coordination-enhancing mechanism.Historical examples of the media in developing countries provide further insight into the circumstances necessary for media to be an effective coordination-enhancing mechanism. We consider the impact of a free media in cases where successful economic development has occurred — Hungary and Poland. We also consider the Ukraine as a case where media has failed to overcome the conflict characterizing the reform process, and Bulgaria as a situation where politicians and the populace have failed to coordinate around ‘good’ reforms despite having a free media. Our paper concludes with some policy recommendations regarding the achievement of a free and effective media.

Notes: William Easterly, an ex-World Bank economist and widely respected growth theorist, in recently noting that skilled individuals may elect to pursue occupations that redistribute income rather than enhance growth, referred to ‘the somewhat whimsical piece of evidence … that economies with lots of lawyers grow more slowly than economies with lots of engineers’. The remark alluded to an assertion by the Bush-Quayle camp during the 1992 Presidential campaign that too many lawyers were prejudicial to US economic growth, and sparked a heated debate that was played out in the Wall Street Journal and a number of academic journals at the time. A decade later, Easterly's rejoinder has prompted us to examine the view that occupational capture (the capture of talent by particular occupations) can contribute to economic stagnation, by revisiting the notion of lawyers as negative externalities to the growth process.

Notes: Analysis of the effects of public financing on private investment in R & D has been the object of numerous applied studies without it having been possible to arrive at a definite conclusion. In this paper the results of a meta-regression of econometric evidence on the relationship between public funding of R & D and private R & D expenditures is presented. After the creation of a data-base including all relevant studies and their results and characteristics, a meta-analysis was carried out to examine whether the characteristics of the applied analysis influence the results and explain the differences in the empirical literature on this subject.

Notes: This paper studies the effect of institutions on trade flows, using a gravity model approach. Standard gravity equations incorporate factors such as geographical proximity, language, trade policy and common history as explanatory factors for variation in bilateral trade that reflect the costs of trade across geographical and cultural distance. We extend this type of analysis by focusing on the relevance of the quality of governance and the extent of familiarity with the resulting framework of rules and norms in explaining variation in bilateral trade patterns. More specifically, we test whether institutional homogeneity and institutional quality have an independent impact on the trade volume between pairs of countries. We find that having a similar institutional framework promotes bilateral trade by 13%, on average. Furthermore, a better quality of formal institutions tends to coincide with more trade. Depending on being either importer or exporter, an increase in overall institutional quality of one standard deviation from the mean leads to an estimated increase of 30–44% in bilateral trade.

Notes: In the context of an emerging focus on highly skilled migration throughout the OECD area, the question under which circumstances migrants can be expected to be relatively skilled is of particular importance. Borjas has analysed the relation between the income distribution and the skills of migrants. His self-selection model predicts that immigrants from countries with a higher income inequality tend to be negatively selected (i.e., less skilled than the average worker in both host and source countries). According to other models based on the human capital theory of migration, however, migrants can be expected to be relatively skilled. Empirical tests of Borjas' much-disputed negative self-selection hypothesis generally rely on immigration data, particularly to the US, and may therefore be biased due to host-country specifics such as network migration and the impact of migration policy. This paper analyses the relationship between country-specific emigration propensities and each country's score on various indices of income inequality with a rich international microdata set. The main result is that highly-skilled persons are more inclined to migrate, though a higher income inequality attenuates the positive selectivity.

Notes: Interest in paid work performed in the home increasingly focuses on the concept of telework but debate over definitions continues. This paper discusses aspects of this debate and argues that project-specific definitions are useful and inevitable. The assertion that a single definition should be used by all research in this area is challenged.

Notes: Although Finland is one of the most advanced and competitive economies in the world, with a sophisticated technological infrastructure, only four per cent of Finnish wage earners regard themselves as doing telework, and a further four per cent had tried telework. Empirical evidence of telework is presented in this paper.

Notes: This article revisits the issue of control and autonomy in telework using interviews with professional, managerial and sales teleworkers in a large Canadian telecommunications company. It finds that the changes in control and autonomy are limited to restructuring of the work schedules and the differences across teleworkers are reproduced.

Notes: The paper examines the psychological impact of teleworking compared to office-based work. Results suggest a negative emotional impact of teleworking, particularly in terms of such emotions as loneliness, irritability, worry and guilt, and that teleworkers experience significantly more mental health symptoms of stress than office-workers and slightly more physical health symptoms.

Notes: The temporal pattern of work has changed in its daily, weekly and monthly rhythms, but so has the ‘spatiality’ of work: for some paid work is undertaken at home, or in cyberspace. Telecommuting can be used to ‘improve’ the lifestyles of long distance weekly commuters and their families.

Notes: This article draws upon the narratives of self-employed parents, their partners and children in order to examine the ‘family friendliness’ of making the home a site of paid work. While not fitting narrow definitions of ‘teleworker’ the subjects daily confronted the use of space in their homes, and access to technologies there.

Notes: Current transformations in technologies and industrial structure of UK telecommunications have important implications for skills and work organisation. This is examined in different divisions of a large UK telecommunications firm: call centres, customer service centres, engineering sectors and the R&D department. The effect of these transformations on the development of firm competences is discussed.

Notes: This article explores the implementation of BPR in the Social Service Administration in a Danish municipality. The technical rationality inherited in BPR marginalises broader conceptions of work–rationality represented by the social workers. This results in a ‘clash’ between rationalities in the Family Group, causing increased strain and lower job satisfaction.

Notes: Books reviewed in this article:Arestis, Philip, Meghnad Desai and Sheila Dow (2002). Money, Macroeconomics and Keynes.Bagwell, Kyle and Robert Staiger (2002): The Economics of the World Trading System.Barfield, Claude E, Günter Heiduk and Paul J.J. Welfens (eds.) (2003). Internet, Economic Growth and Globalization.Begg, Iain (ed.) (2002). Europe: Government and Money. Running EMU: The Challenges of Policy Co-ordinationBerglöf, Erik, Barry Eichengreen, Gérard Roland, Guido Tabellini and Charles Wyplosz (eds.) (2003). Built to Last. A Political Architecture for EuropeBernholz, Peter (2003). Monetary Regimes and Inflation: History, Economic and Political RelationshipsCommun, Patricia (ed.) (2003). L'Ordoliberalisme allemand. Aux sources de l'Economie sociale de marchéDe Soysa, Indra (2003). Foreign Direct Investment, Democracy, and DevelopmentEndres, Anthony and Grant Fleming (2002). International Organizations and the Analysis of Economic PolicyFalkinger, Josef (2002). A Theory of Employment in Firms: Macroeconomic Equilibrium and Internal Organization of WorkGosh, Atish, Anne-Marie Guide and Holger Wolf (2002). Exchange Rate Regimes. Choices and ConsequencesHeckelman, Jac C. and Dennis Coates (eds.) (2003). Collective Choice — Essays in Honor of Mancur OlsonHeise, Arne (Hrsg.) (2002). Neues Geld—alte Geldpolitik? Die EZB im makroökonomischen InteraktionsraumJanz, Norbert und Georg Licht (Hrsg.) (2003). Innovationsforschung heute— Die Mannheimer InnovationspanelsLatzer, Michael und Stefan W. Schmitz (2002). Die Ökonomie des eCommerceMizen, Paul (ed.) (2003). Central Banking, Monetary Theory and Practice. Essays in Honour of Charles Goodhart, Volume OneMizen, Paul (ed.) (2003). Monetary History, Exchange Rates and Financial Markets. Essays in Honour of Charles Goodhart, Volume TwoPryor, Frederic L. (2002). The Future of U.S. CapitalismSpulber, Daniel F. (ed.) (2002). Famous Fables of Economics — Myths of Market FailuresWebster, Chris and Lawrence Wai-Chung Lai (2003). Property Rights, Planning and Markets

Notes: The new information and communication technology, ICT, induces households to take over tasks from firms and government agencies, using tools and systems provided by these very same organizations. The result is often joint production activities. We argue that the importance of ICT for the exchange process between households and organizations is underestimated by only considering the consequences for the last stage of the process, i.e., the final purchase of goods and services. Our analysis of household behavior utilizes a modified version of Gary Becker’s model of the household as a combined producer-consumer.

Notes: A lively debate has recently emerged about the consequences of the diffusion of the Internet. While many social scientists emphasize the beneficial economic consequences of the Internet some suspect that it has also disadvantages for users’ social capital. So far the existing empirical evidence concerning the effect on social capital is mainly based on cross-sectional data and is still contradictory. This study is based on a longitudinal survey conducted in 1998 and 2001 among a random sample of Swiss citizens. It analyzes the determinants of the adoption of the Internet and the consequences for respondents’ personal networks as well as the time they spent socializing with their network. The results show that the Internet was adopted sooner by individuals with high financial, human and social capital. Furthermore, the results suggest that Internet use is not associated with a reduction in respondents’ networks or with the time they spent socializing with friends. Instead the findings suggest that the time users devote to the Internet is taken away from the time they spend on watching television.

Notes: This paper focuses on the future of the defence firm. It forecasts that the defence firm of 2050 will be radically different, reflecting a combination of technology, economic and political factors. To provide insights into the future, the paper starts by outlining recent changes in the size, structure and organization of defence firms and industries. It concludes by suggesting that the defence firm has a future and that it will focus on systems integration with new and different forms of industrial organization and will include new entrants.

Notes: While the stylised fact that, around the world, areas of rapid growth are geographically distinct from those with a poor growth performance, is easily accepted, little effort has been made in the empirical literature to incorporate location into the analysis of regional convergence in terms of economic growth. This paper provides a quantitative evaluation of the role of location in regional convergence, using the argument that growth in each region depends not only on its own characteristics but also on those of the regions that form the neighbourhood to which it belongs. Applying spatial econometrics it is found that, during the 1990s, opposing forces were exerting their influence across the EU: while regions did converge at a rate close to the 2 percent mark, neighbourhoods of regions diverged at an almost equal rate, leaving a net effect of convergence considerably smaller than the one previously reported in the literature.

Notes: Books reviewed in this article:S. N. Afriat, The Market. Equilibrium, Stability, MythologyHazel Bateman, Geoffrey Kingston and John Piggott, Forced Saving: Mandating Private Retirement IncomesJagdish Bhagwati (ed.), Going Alone — The Case for Relaxed Reciprocity in Freeing TradeBoeri Tito, Axel Börsch-Supan, Agar Brugiavini, Richard Disney, Arie Kapteyn and Franco Peracchi (eds.), Pensions: More Information, Less IdeologyAlvaro Cencini, Monetary MacroeconomicsBernard Dafflon (ed.), Local Public Finance in Europe: Balancing the Budget and Controlling DebtGeoffrey M. Hodgson, How Economics Forgot History. The Problem of Historical Specificity in Social ScienceDouglas A. Irwin, Free Trade Under FireDaniel B. Litvin, Empires of ProfitMark J. Roe, Political Determinants of Corporate Governance. Political Context, Corporate ImpactHorst Siebert (ed.), Economic Policy Issues of the New EconomyPaul J. J. Welfens, Interneteconomics.net. MacroeconomicsJoachim Zweynert, Eine Geschichte des ökonomischen Denkens in Russland. 1805–1905

Notes: Between 1974 and 1996, there was a substantial increase in the emphasis on academic research in universities located in the United States and elsewhere throughout the world. This increased emphasis was, and continues to be, reflected in a variety of increased incentives for faculty to produce research, including higher salaries, reduced teaching loads, increased money for travel, on so on. Yet, as we report in this paper, during this time period the rate of uncitedness of economics papers remained constant (at 26 percent). Clearly, universities and taxpayers/supporters of universities are obtaining no enhancement of research output (in terms of citations) from the increased subsidy to faculty research. We discuss the implications of this result for the publication and organization of economic research. In particular, we discuss the fact that resources devoted to up-front screening of papers by authors and journals have risen substantially over this period, but to no avail with respect to reducing the incidence of dry holes.

Notes: We analyse the interrelationship between economics journals' relevance and reputation. While reputation and relevance positively affect each other, relevance has a much stronger impact on reputation than reputation on relevance. Citation frequency is a key determinant for both journal reputation and relevance, but effects on journal reputation are nearly twice as strong. Specialised journals are, ceteris paribus, considered less relevant and, therefore, also less reputed, even though specialisation has a positive direct effect on reputation. German-speaking economists find German journals more relevant, but at the same time also less reputed than foreign journals. Age and volume effects are also analysed.

Notes: In this paper we analyse the provision of incentives at work on the basis that the employment relationship is not solely an exchange of work for money. Particularly, in addition to a salary, a job also gives access to a working experience, which determines the potential for employee's human capital acquisition and for his social and professional recognition. Accordingly, we argue that the level of access defines the employee's opportunities for satisfying his self-actualisation and achievement needs. Further, given that the firm has the ability to regulate access by way of a number of organisational decisions, access becomes a powerful mechanism to activate the worker's internal motivation. In this respect, the main purpose of this paper is to study the effect of access and intrinsic motivation on employee's performance and job design. To that effect, we analyse the economic consequences of our arguments on access through a model of agency enriched with a number of psychological and organisational considerations. Our results and conclusions are consistent with much of the interdisciplinary research on the subject, as well as with the evidence emerging from the real business practice. They also provide a number of practical implications for personnel policies. First, in order to activate the individual's internal motivation, the job must reach a minimum value. Second, the positive effect of the employee's intrinsic motivation on effort decreases with the magnitude of monetary incentives. Third, the efficiency gains generated by the extension of job access increase with the employee's level of perceived risk. Finally, the costs of selection are a consequence of granting access.

Notes: The level of productivity is correlated across countries with measures of (lack of) corruption, but this appears to be due to a common association of these variables with measures of civil infrastructure, here measured by a combination of governance indexes labelled ‘rule of law’ and ‘government effectiveness’. New instruments based on the size- and spatial-distributions of cities within the countries of the world were constructed in order to explore the causal relationships between civil infrastructure and productivity. Civil infrastructure accounts for a substantial fraction of the global variation in output per worker across countries. Within this empirical pattern there is a systematic deviation associated with the current and former socialist states, which have both lower productivity and inferior civil infrastructure than would be predicted for otherwise similar non-socialist states. However, for a given level of the index of civil infrastructure these states are also shown to have a higher level of productivity than otherwise similar non-socialist states. The unconditionally low productivity of socialist states is attributed entirely to the indirectly deleterious effects that socialism had on civil infrastructure, which more than offset its directly positive effect on output.

Notes: The purpose of this paper is to examine connections between rationality and rule following, and to propose that a distinction between consequential and procedural interests can help us in explaining choice behaviour in general. The limitations of Rational Choice theory have become increasingly established in economics. An alternative behavioural theory, Rule-Individualism, is assessed in the paper, with the conclusion that it fails in its attempt to provide a genuinely different perspective compared to Rational Choice theory. Hayek's theory of mind works as a bridge, connecting rule following, as a behavioural pattern, with contextual discretion. The central message in Hayek's book in the field of psychology, The Sensory Order, is that all types of action are fundamentally based on our ability to discern recurrent patterns. That is, all action is essentially rule-based. A question then arises about a potential explanation to the distinction between rule following and discretion at the observable level of individual action. Rational Choice theory is silent about this, and Rule-Individualism, it will be explained, is inherently inconsistent when dealing with the logic of rule following. This paper aims at offering a potential explanation which is not inconsistent or tautological.

Notes: Review in this article:Audretsch, David B., Roy Thurik, Ingrid Verheul and Sander Wennekers (eds.), Entrepreneurship: Determinants and Policy in a European — U.S. ComparisonBarbieri, Katherine The Liberal IllusionBerdell, John International Trade and Economic Growth in Open EconomiesBluestone, Barry and Mary Huff Stevenson, The Boston RenaissanceBofinger, Peter Monetary PolicyCorden, W. Max Too Sensational: On the Choice of Exchange Rate RegimesCreedy, John Taxation and Economic BehaviourCrowley, Patrick M. (ed.) Before and Beyond EMUDyson, Kenneth The Politics of the Euro-ZoneElroy Dimson, Paul Marsh and Mike Staunton Triumph of the Optimists: 101 Years of Investment ReturnsFreiburghaus, Dieter (Hrsg.) Auf den Spuren des Föderalismus …Frey, Bruno S. and Alois Stutzer Happiness and EconomicsGandolfo, Giancarlo International Finance and Open-Economy MacroeconomicsMarrewijk, Charles van International Trade and the World EconomyMartens, Bertin, Uwe Mummert, Peter Murrell and Paul Seabright The Institutional Economics of Foreign AidMeyendorff, Anna and Anjan V. Thakor (eds.) Designing Financial Systems in Transition EconomiesNayyar, Deepak (ed.) Governing GlobalizationStiglitz, Joseph E. Globalization and Its DiscontentsUngern-Sternberg, Thomas von Gebäudeversicherung in Europa: die Grenzen des WettbewerbsZodrow, George R. and Peter Mieszkowski (eds.) United States Tax Reform in the 21st Century

Notes: User participation in information systems development is often surrounded by assumptions that the resultant system will be a success, will reflect user needs, and that the process results in an empowered workforce. This paper argues that underlying these foreground rational assumptions are instrumental, politically motivated justifications driving the need to involve users.

Notes: This paper explores the organisation of the maintenance function of five manufacturing and utility companies and the involvement of maintenance workers in plant improvement. It highlights the important role of the tacit skills of maintenance workers and the broader role of the maintenance function in technological change and organisational performance.

Notes: This article offers a critique of recent characterisations of the effects of electronic technologies in the workplace. It presents detailed case study evidence that calls into question a number of common theoretical assumptions about the character of surveillance at work and the responses of employees to it.

Notes: The German author Heinrich Ludwig Lambert Gall (1794-1863) who is characterized as socialist by the authors of histories of economic thought proposed a policy for full employment, based on the multiplier-principle and public expenditures financed by taxes, since 1822. Not Rodbertus but Gall was the first one describing the multiplier scheme. The interpretation of Gall's publications shows his important ideas about interventionism similar to the modern theory of full employment and the activity of the state.

Notes: Alternativen aussenwirtsckafflicker Anpassung. Jahresgutachten 1968/69 des Sachverständigenrats zur Begutachtung der gesamtwirtschaftlichen Entwicklung.Bachmann, Hans: The External Relations of Less-Developed Countries.Bliefernich; Gryck; Pfeifer; Wagner: Aufgaben zur Matrizenrech-nung und linearen Optimierung.BÖs, Dieter: Öffentliche Aufträge in ÖsterreichBraeuer, Walter: Frankreichs wirtschaftliche und soziale Lage urn 1700.Buhr, Walter: Dualvariable als Kriterien unternehmerischer PlanungCrockett, Jean: Consumer Expenditures and Incomes in GreeceCurrie, Laughlin: Obstacles to Development.Einzig, Paul: Foreign Exchange Crisis. An Essay in Economic Pathology.Exo, Reinhold: Die Entwicklung der sozialen und ökonomischen Struktur der Ersparnisbildung in der Bundesrepublik DeutschlandFeinstein, C. H. (Ed.): Socialism, Capitalism and Economic Growth: Essays Presented to Maurice Dobb. Forecasting on a Scientific Basis.Fromm, Gary, and Taubman, Paul: Policy Simulations with an Econometric Model.Gabriel, Peter B.: The International Transfer of Corporate Skills: Management Contracts in Less Developed Countries.Hutchison, T. W. : Economics and Economic Policy in Britain 1946-66.Caves, Richard E. et al.: Britain's Economic Prospects.Johnson, Harry G. (Ed.): Economic Nationalism in Old and Mew States.Jungenfelt, K. G. : Löneandelen och den ekonomiska utvecklingen. Les stratégies d'entreprise.Maass, GÜnther: Die Rolle des Pfund Sterlings in der Weltwirtschaft seit dem Zweiten WeltkriegMcKean, Roland N. (Ed.): Issues in Defense Economics—A Conference.Myrdal, Gunnar: Asian Drama.Pressburger, S.: Österreichische NotenbankSaville, Lloyd: Regional Development in Italy.Schelbert-Syfrig, H.: Empirische Untersuchungen über die Geldnachfrage in der Schweiz.Steiner, Helmut: Soziale Struktuweränderungen im modernen Kapitalismus.Stoleru, L. : L'équilibre et la croissance économiques.Theil, Henri: Applied Economic ForecastingTimm, H., und Haller, H. (Hrsg.): Beiträge zur Theorie der öffentlichen AusgabenTriantis, S. G.: Cyclical Changes in Trade Balances of Countries Exporting Primary Products 1927-33.Walter, Ingo: The European Common Market.Westphal, Uwe: Die importierte Inflation beifestem und flexiblem WechselkursZaleski, EugÈne: Planning Reforms in the Soviet Union, 1962-6.ZohlnhÖfer, Werner: Wettbewerbspolitik im Oligopol - Erfahrungen der amerikanischen Antitrustpolitik

Notes: In this paper on power relations the author assumes that each participant (A, B) behaves rationally, aims at an increase of his utility. The assumption of the purely instrumental character of power constitutes a second important premise: power is supposed to be a means, not an end in itself.When A tries to compel B to do something he wouldn't otherwise have done by threatening retaliation against any disobedience of B, A is interested in the credibility of his threat indeed. However A has usually no incentive actually to carry out the threat in case of resistance by B. Moreover the realization of the threat very often causes considerable costs to the power-holder. Because of A's dilemma B stands a good chance of resisting the pretension of A without being punished. Finally the author analyses what counter-moves A can make.In another form of influence—often called ‘manipulation’—B doesn't notice at all that his goals conflict with those of A. A does not make explicit the ends he is striving for. As long as the assumption of rational behaviour is retained, this kind of influence can only occur in case of uncertainty—taste structure of A and B assumed constant.

Notes: This paper develops a conceptual framework for the systematic analysis of inter-community spillovers and their implications for local expenditure-investment decisions. Spillovers are distinguished on the basis of the effects they have upon the rate of exchange between current goods for private consumption and publicly provided goods. The mechanisms of spillovers—economic interaction, fiscal inter-dependence, and migration—and the concept of community are examined in this context. A diagrammatic analysis is used to demonstrate the influence of spill-overs on the decision making unit's allocation of resources. Methodological issues and problems involved in estimating spillover magnitudes are presented. A case study provides numerical counterparts for the theoretical quantities of the analysis. While emphasis is on publicly provided education in the United States, the framework and methodology should be applicable to other local governments and their services.

Notes: The relationships between international trade and short-term capital placements are shown to be more numerous and complex than is often recognized in the literature. At first instance the trade balance determines a flow of private capital but these flows do not represent movements to equilibrium positions. At least partial repatriation of such flows will be desired by traders but the speed of this repatriation is constrained by the terms on which trade finance has been extended. With full repatriation, a ‘permanent’ change in the trade balance would not lead to a permanent change in private capital flows, but rather to a change in the net stock of short-term assets held abroad due to these constraints on instantaneous portfolio adjustment by traders. The size of the change in this stock is shown to depend on the terms on which trade is financed as well as on the size of the change in the trade balance. The time path of the permanent outward shift is dependent upon these terms as well.The effects just summarized depend upon a divergence between traders’ actual and desired portfolio allocations because of temporary constraints on portfolio adjustment. Longer run changes in the trade balance and absolute volume of trade will affect traders’ convenience and hedging returns from holdings of foreign balances and hence may affect their desired portfolio allocations. While these effects could conceptually go in cither direction, the secular expansion of trade should level to a short-term capital inflow into the United States because of the international role of the dollar.

Notes: This article presents a mathematical model for monopolistic price competition among firms with differentiated products. The conditions which distinguish the Chamberlinian analysis from that of Edgeworth are examined. Product differentiation is not sufficient to guarantee the existence of a stable non-cooperative equilibrium point in terms of price. The relationship among the degree of product variation, amount of capacity, and stability are examined. Explicit formulas are obtained for the non-cooperative equilibrium and the capacity conditions for its existence. The behavior of the model as the degree of differentiation approaches zero and as competition becomes large is examined. This connects the analysis of oligopoly with the analysis of pure competition.

Notes: Decision theory is applied to a situation of conflict which a mother of two actually faced in an isolated home in the American Rocky Mountains. While the father was away on a trip which he thought to last seven days, the mother was bitten by a poisonous snake. She thought the bite to be fatal. To spare her two children, aged two months and two years, the agony of death by starvation, she decided to kill them.The mother faced a decision problem under uncertainty. A theoretical analysis of the situation shows which rational decision would have been optimal. However, a rational decision derived in an objective fashion is not free of subjective elements. Assigning utility measures to the possible types of death of the children, suppositions as to nature's strategies, and the choice of one of four established decision criteria are subjective.The criteria of Wald and Savage picture nature as a hostile opponent wanting to inflict greatest possible injury. The difference between them consists merely in the valuation of the disutility of death. Rational behaviour of the mother calls for selecting that strategy which promises the best of the worst possible outcomes.The Hurwicz criterion can accommodate all variations of nature's attitude, from malignant to benignant. According to the mother's optimism a distribution is supposed over nature's most favourable and unfavourable strategies. The probabilities of all other possible strategies are assumed to be zero.The criterion of Laplace assumes an indifferent nature. All possible strategies of nature are equally likely to eventuate.Three strategies are open to the mother, leave both children alive, kill one child, kill both children. Depending on the utility valuations the mother attaches to the different possible types of death, one of these strategies is optimal. If a decision is arrived by the Wald or Savage criterion a mixed strategy is superior to a pure one. The possibility of the childrens survival through the arrival of a stranger only affects the choice of the mother's strategy if she uses the Laplace criterion.

Notes: Atkinson, Thomas R., and Simpson, Elizabeth T.: Trends in Corporate Bond Quality.Bohnet, Armin: Zur Theorie der personellen EinkotntnensverteilungBosch, Alfred, und Veit, Reinhold : Theorie der Geldpolitik.Brinkmann, Gerhard: Berufsausbildung und Arbeitseinkommen.Buckley, Helen, and Tihanyi, Eva : Canadian Policies for Rural Adjustment.Caves, Richard E., and Johnson, Harry G. (Eds.): Readings in International Economics.Deane, P., and Cole, W. A.: British Economic Growth, 1688-1959.Desai, V. R. Mutalik: Social Aspects of Savings.Diegues jr., Manual, and Wood, Bryce (Eds.): Social Science in Latin AmericaEhrlicher, Werner; Esenwein-Rothe, Ingeborg; JÜrgensen, Harald, und Rose, Klaus (Hrsg.): Kompendium der VolkswirtsckaftslehreEisermann, Gottfried (Hrsg.): Die gegenwärtige Situation der SoziologieFeiwel, George R.: The Soviet Quest for Economic Efficiency.Grand-Jean, Paul: Guerres, Fluctuations et Croissance.Hackett, John and Anne-Marie: The British Economy: Problems and Prospects.Harborth, Hans-JÜrgen : Neue Industriezentren an der weltwirtschaftlichen PeripherieHazelwood, Arthur: African Integration and DisintegrationHeller, Walter W.: New Dimensions of Political Economy.Horvat, Branko : Towards a Theory of Planned Economy.Šik, Ota: K problematice socialistických zbožnich vztahûStÁdnik, Miloš: O koncepci národniho dûchodu v Mad'arskuIdem, Několik statistických i nestatistických pohledû na hospodářské reformy v JugosláviiIdem, The Conception of National Income in Czechoslovakia.JÜrgensen, Harald (Hrsg.): Entzifferung - Bevölkerung als Gesellschaft in Raum und zeitKaldor, Nicholas: Strategic Factors in Economic Development.Kirby, E. Stuart: Economic Development in East Asia.Klinov-Malul, Ruth: The Profitability of Investment in Education in Israel.Nove, Alec und Newth, I. A.: The Soviet Middle East.Ohlin, Bertil: Interregional and International TradePeacock, A. T., and Wiseman, J.: The Growth of Public Expenditure in the United Kingdom.Pickering, J. F.: Resale Price Maintenance in Practice.Preiser, Erich : Wirtschaftspolitik heuteSchachtschabel, Hans G.: Wirtschqftspolitische Konzeptionen.Shaffer, Harry G. (Hrsg.): The Soviet System in Theory and PracticeSimha, S. L. N.: Essays on Finance.Snider, Delbert A.: Introduction to International EconomicsTrappeniers, Felix : Les Avantages comparatifs dans le Marché commun.Youngson, A. J.: Overhead Capital.Zauberman, A.: Aspects of Planometrics

Notes: This paper reviews the methods and findings of several studies that have been undertaken recently to estimate the interest sensitivity of short-term capital movements. The paper concentrates on the studies of Philip Bell, Peter Kenen, and Jerome Stein, with references to studies by Benjamin Cohen and Robert Gemmill.From the standpoint of balance-of-payments policy, the question of the interest elasticity of short-term capital movements takes on considerable importance. However, the studies conducted thus far do not give a clear-cut answer to this question. Bell finds that, in general, interest rates have only a minor effect on capital flows, whereas Kenen finds them to be highly significant. Stein's work points out drawbacks to the Bell and Kenen studies and proposes remedies.

Notes: Without entering the controversy on the importance of human capital in relation to technological progress, an economist faces a challenging technical problem: how to measure or quantify in monetary terms the significant value of specific skills, both for the individual and for the social entity. This paper attempts to contribute to this objective on two levels: one is to develop an acceptable methodology for evaluation of the incremental contribution of skills; secondly, the paper summarizes preliminary results of a case study on the transfer of skills acquired during military training to the civilian sector in Japan during the post-World War II period.Implications of the study suggest a critical review of by-product contributions of military expenditures. In spite of pejorative evaluations of the military establishment on moral grounds by a segment of public opinion, military training remains a prevasive mechanism for mass development of skills in all nations, particularly in less-developed and socialist countries.The potentiality of tapping the experience and the know-how of military establishments for development of skills transferable for application in a progressively technical society opens opportunity for further scientific exploration and operational exploitation.

Notes: Much of the recent literature on the adequacy of international reserves states that there should be enough reserves in the world so that countries can avoid undesirable and painful adjustment to balance of payments disequilibrium. But this undesirable adjustment, namely deflation and unemployment, is the only adjustment mechanism that exists under a system of fixed exchange rates. It follows from this that no amount of international reserves, short of infinity, can ever be enough. Furthermore, the existing system is one in which there is a built-in bias toward disequilibrium. If countries differ in their willingness to permit some inflation in exchange for full or nearly full employment, the inflation prone countries will tend to incur deficits. They will avoid adjustment—that is, domestic contraction, as long as they have any reserves above what they consider to be minimally acceptable levels. The inflation-avoiding countries, which will tend to be in surplus, will prefer to accumulate reserves rather than permit inflation. In such a world there is likely always to be a ‘shortage' of reserves, whatever the actual level of reserves may be.

Notes: Having defined the terms of trade, the author deals with the restrictions resulting from their use, for instance, in their statistical application, and, he gives a survey of the theories on the subject.He goes on to examine the various views on the terms of trade between primary commodities and manufactures and on those between developed and developing countries. However, generalizations on the matter are difficult. The widely di-vergent opinions are due in great part to uncomplete and defective statistical material. The trend of the terms of trade between primary commodities and manufactures and between developed and developing countries (which is not necessary the same) has but little significance. It is therefore to be regretted that economic policy recommendations are based on the assumption that the terms of trade will deteriorate. This is in fact what happened in numerous papers prepared for the two UNCTAD-conferences. There is no relationship between the terms of trade and economic development.The author concludes that the use of the terms of trade is to be avoided, except, in the last resort, for the study of a specified country and for a period not longer than some years. Moreover, an appropriate comment, for instance, on the productivity trends and the quantities traded, is necessary. The developing countries have, therefore, no interest in giving priority to the terms of trade.

Notes: The nature of a statistical relationship between wage changes and unemployment rates or its very existence in the United States has stimulated studies with contradictory conclusions. This study concludes that (1) a classic ‘Phillips curve’ can be constructed for the U. S. in the postwar period; (2) recent U. S. inflation has reflected the effects of a ‘Phillips curve’ analysis, more so than only secular updrift; (3) a single variable approach (utilizing the skilled labor force unemployment rate) is more successful in explaining wage and price changes during this period than the multiple variable models which are contradictory in theoretical specification and anyway have not performed successfully in recent years; and (4) that the U. S.‘Phillips curve’ has shifted to the left during the 1960's, making the economy less inflation-prone than has been previously thought.

Notes: In The Structure of Scientific Revolutions T. S. Kuhn argues that the history of the natural sciences has been marked by periodic crises, when the dominant ‘paradigm’ is challenged, rejected, and displaced by a new paradigm. Since the paradigm's functions are both regulative and cognitive, this process has sociological as well as purely epistcmological aspects.With the exception of the Keynesian revolution of the 1930's, there have been no phases of paradigm change in economics quite like those in the natural sciences. This is due mainly to the nature of economic paradigms (or ‘basic’ theories) which are less precise and less liable to falsification. ‘Critical anomalies’ and ‘crucial experiments’ do not arise in economics, as in the natural sciences; and yet the process of paradigm change may serve as an ideal type, which can be used to clarify the interrelationships between the terminological, conceptual, personal, and professional elements involved in the development of economic ideas, especially in such episodes as the emergence of classical (Ricardian) economics, the Methodenslreit, or the marginal utility revolution.

Notes: After World War II the economic, technological and social conditions of modern society have changed fundamentally. These evolutionary changes not only influenced the range of the activity of the State, i. e. the empirical and theoretical object of public finance since its foundation as a branch of Political Economy; it also shows a strong effect on the basic parts of modern public finance, on the normative and positive theory of public economy and on the approach of decision making process in the public sector. On the other hand, new methods and perception of this field essentially contributed to throwing new lights on fiscal functions and objectives of modern government and to solve the central problems. Yet this is only an initial step in applying the results of fiscal theory to the interdependent market and public economy.After a period of stagnation a process of theoretical foundation and economizing of this field has begun, preliminarily resulting in an amalgamation of fiscal and economic theory and in an incorporation of fiscal into economic policy. This merger logically raised the question how far this branch is to be considered a proper field of the tripartite Political Economy which—as is wellknown—is still taken as a basis of our academic institutions as well as of many textbooks. Along with the methods of research and theorizing the questions and thus the problems of this branch have changed to a degree that its traditional framework and even its name have become questionable. The label ‘public finance’ today does not cover essential parts or aspects of the objects in theory and practice sufficiently. We are interested in the principles of public economy (not primarily of public finance) and the interrelations to the market economy, the problems thus ranging from activating and allocating a nation's resources to distributing income and wealth and, to stabilizing internal and external growth. The central aim of modern public finance is to make transparent the circular flow and the interdependence within public sector and between market and public economy by budget- and market theory in order to obtain results which can be successfully applied to a rational economic and general policy. The idea of an autonomous theory of public finance has indeed been overcome, although the peculiarity of political decision making renders a comprehensive theory of a nation's economy more difficult in which government activity is subdued to economic principles.

Notes: The essay examines the influence of capital imports on the structure of a developing economy. A significant and persistent capital import will result in a relatively low foreign exchange rate. Consequently, the share of internationally tradable goods and services in national product tends to be low. This will be reflected in a higher share of services and in a smaller share of agriculture and manufacturing in national product and in the labour force of an import surplus economy as compared with a balancing economy with the same internal resources. International comparisons show larger differences in productivity for tradable goods and services than for non-tradable goods and services. Considerable gains can, therefore, be obtained in low-productivity countries by enlarging the production of non-tradables and by limiting the production of tradables to those with a high comparative advantage. Thus, the average capital/product ratio tends to be smaller and average product per employed person larger, when there are significant and persistent import surpluses as compared with a situation in which international accounts are balanced. This, together with the larger investments made possible by capital imports, will increase the growth rate.But the import surplus economy becomes structurally dependent on capital imports. To be able to balance its international accounts it must adjust its structures, i.e. increase the share of tradable goods and services in national product so that it can replace import surplus by larger exports and by import substitutes and increase domestic savings. To achieve this a deliberate government policy is necessary.

Notes: The study of economic history attempts to reveal the causes of the growing international economic disparity and to identify the strategic factors of economic change. The historical inductive method, analysed economic history in terms of stages of growth.The underlying idea of the concept of stages, found in List, Marx, the German historicists, and revived in a modern form by Rostow, is that every society passes several phases of economic growth, from infancy or primitive stage to maturity or highly industrialised society. However, the essence of stages in different concepts was not uniform, neither was the indispensability of each and everyone of the stages uncontested. Weber, in particular, opposed the monistic approach, and suggested the concept of ‘ideal types’ from which realities are necessary deviations.Marx's contribution to modern growth theory lies in his dynamising of the classical theory through his expanded reproduction function, envisaging both capital and labour, and their qualities, as the strategic factor of growth, rendering possible both a highly industrialised and an equalitarian society, while List's model can be considered the origin of A. G. B. Fisher's and C. Clark's primary, secondary and tertiary sectors. Even in Schumpeter, stages and periodisation of growth can be easily traced, although they are chiefly explained in terms of technology, entrepreneurship and business cycles.Among the modern growth theorists, mainly Rostow revived the concept of stages and the notion of a ‘threshold’ rate of investment as the strategic factor of expanded reproduction and development, while W. G. Hoffmann with his shift from consumer- to capital-goods industries again calls to life Marxian transition as well as the three-sectors concept. Like his predecessors, List with industrialisation and Marx with the capitalist stage, also Rostow is mainly preoccupied with one particular, ‘take-off’ stage. Despite its flaws, Rostow's concept has become a useful tool of historical and positive analysis as well as a framework for normative models fervently looking for strategic factors of change, and some lessons of economic history. It also brought to the fore the rather paradoxical recent development in the economic camp, with ‘new economic historians’ employing purely quantitative methods of research, and growth theorists looking for help (and desirable quantification) to qualitative variables to explain past and present growth trends and to shape adequate growth models.

Notes: This paper provides a brief chronological summary of the main texts concerning education of leading economists from Adam Smith to Pigou. It shows that the classical economists have clearly and almost unanimously recognized education as (1) an investment in human beings; (2) a consumer durable par excellence; (3) a political good in that it preserves law and order; (4) a social good in that it contributes to the diminution of crimes and enhances social mobility; (5) a factor making for more equal income distribution; (6) a source of economic growth; (7) an item carrying large externalities of various kinds; (8) a peculiar commodity bought and sold in a peculiar market; (9) an item liable to be under-invested by private individuals; and (10) an area calling for State intervention.In fact, qualitatively they said everything that is to be said about the economics of education. But they left it to their successors to tackle the quantitative aspects when more statistics and refined methods of statistical analysis become available.

Notes: In recent years a number of investigators have suggested that many economic time series exhibit significant long-run variations about an upward trend as well as short-run business fluctuations. However, several recent studies in which spectrum-analytic techniques have been employed reach negative conclusions with respect to the significance of long swings in economic activity. This paper is concerned with some of the basic problems associated with the use of spectrum estimates to test the significance of low-frequency variation in economic time series. An examination of the problem of low-frequency resolution, inadequate trend removal, low-frequency bias due to least-squares trend elimination, and the variance of low-frequency estimates leads to a qualification of some of the earlier spectrum-analytic results. This study suggests that while there is some evidence of long swings in economic activity, the problems inherent in the analysis of low-frequency variation make it extremely difficult to ascertain the statistical signifiance of these long cycles.

Notes: Allen, G. C. : Monopoly and Restrictive Practices. London 1968. George Allen and Unwin. 183 pp. 36 s.Blaug, Mark: Economic Theory in Retrospect. (Revised Edition.) Homewood, Illinois 1968. Richard D. Irwin. XXIV, 710 pp. $9.50Claassen, E. M Monnaie, Revenu National et Prix. (Ouvrage publié avec le concours du CNRS.) Paris 1968. Dunod. 216 p. Fr. 38.-Dhar, P. N., and Sastry, D. U. : Demand for Energy in North-West India. London 1967. Asia Publishing House. 135 pp.Due, John F., and Clower, Robert W Intermediate Economic Analysis - Resource Allocation, Factor Pricing and Welfare. Fifth Edition. Homewood, Ill. 1966. Richard D. Irwin. 481 pp. $ 8.-Engelsing, Rolf: Kleine Wirtschafts- und Sozialgeschickte Deutschlands. Hannover 1968. Verlag für Literatur und Zeitgeschehen. 156 S.Etienne, Gilbert: Studies in Indian Agriculture: The Art of the Possible. Berkeley and Los Angeles 1968. University of California Press. XII, 343 pp.Finger, Gottfried: Das Wachstum von Unternehmen - Mit einem Beispiel aus der Automobilindustrie. (Kieler Studien, Nr. 88.) Tübingen 1968. J. C. B. Mohr (Paul Siebeck). VI, 1555 S. DM 30.-Hagemann, GÜnter: Aufkommenselastizitäten ausgewählter Steuern in der Bundesrepublik Deutschland 1950-1963. (Kieler Studien, Nr. 85.) Tübingen 1968. J. G. B. Mohr (Paul Siebeck). 207 S. DM 40.-Hartmann, Heinz (Hrsg.): Moderne amerikanische Soziologie. Neuere Beiträge zur soziologischen Theorie. Stuttgart 1967. Ferdinand Enke. X, 418 S. DM 28.50Hirsch, See: Location of Industry and International Competitiveness. Oxford 1967. Clarendon Press. 137 pp. 35s.Horowitz, D. (Hrsg.): Marx and Modern Economics. London 1968. Mac Gibbon and Klee. 380 S. 50 s.HÜfner, Willi (Hrsg.): Die Statistik im Dienste der Wirtschaftspolitik. Festschrift für Gerhard FÜrst zu seinem 70. Geburtstag. (Allgemeines Statistisches Archiv, 2/3, 1967.) Göttingen 1967. Vandenhoeck and Ruprecht. IX, 290 S.Jaeger, Gerd: Entwicklung der sekundären Finanzierungsinstitute in der Bundesrepublik Deutschland und ihre Bedeutung für die Zentralbankpolitik. (Forschungsberichte des Instituts für Weltwirtschaft an der Universität Kiel, Bd. 89.) Tübingen 1968. J. C. B. Mohr (Paul Siebeck). VII, 218 S. DM 40.-Kirschen, E. S., Benard, J., Besters, H., Blackaby, F., Eckstein, O., Faaland, J., Hartog, F., Morissens, L., und Tosco, E. : International vergleichende Wirtschaftspolitik. Berlin 1967. Duncker und Humblot. XXI, 518 S., 90 Tabellen. DM 66.-Kleinewefers, H. : Theorie und Politik der Abwertung. (Veröffentlichungen der List Gesellschaft e. V., Band 58.) Basel und Tübingen 1969. Kyklos-Verlag, J. C. B. Mohr (Paul Siebeck). 137 S., 6 Abb. DM 22.50Krelle, Wilhelm, Schunck, Johann, und Siebke, JÜrgen : Überbetriebliche Ertragsbeteiligung der Arbeitnehmer. Band I und II. Tübingen 1968. J. C. B. Mohr (Paul Siebeck). XV, 506 S. DM 58.-Krier, Henri, et Le Bourva, Jacques: Economie Politique. Tome 1. Paris 1968. Armand Colin. 663 p.Lange, Oskar: Einführung in die Ökonometrie. Tübingen 1968. J. C. B. Mohr (Paul Siebeck). 304 S.Leach, Richard H. (Ed.): Contemporary Canada. Durham, N. C. 1967. Duke University Press. X, 328 pp. $ 10.-Lipfert, Helmut: Einführung in die Wähmngspolitik. 4. neubearbeitete Auflage. München 1969. Verlag C. H. Beck. XI, 326 S.Maizels, Alfred, assisted by Campbell-Boross, L. F., and Rayment, P. B. W. : Exports and Economic Growth of Developing Countries. A theoretical and empirical study of the relationships between exports and economic growth, with illustrative projections for 1975 for the main overseas Sterling countries. (Economic and Social Series of the National Institute of Economic and Social Research.) Cambridge 1968. Cambridge University Press. XIX, 443 pp. 60s.Montias, John Michael: Economic Development in Communist Rumania. Cambridge, Mass., and London 1967. The M. I. T. Press. XI, 327 pp. 120s.Moore, Basil J. : An Introduction to the Theory of Finance—Assetholder Behavior Under Uncertainty. New York, London 1968. The Free Press, Collier-MacMillan. VIII, 299 pp. 28s.Mundell, Robert A. : International Economics. New York 1968. The MacMillan Company. 332 pp. $9.95OECD: Development Assistance: Efforts and Policies of the Members of the Development Assistance Committee: 1968 Report. Paris 1968. 278 pp. sFr. 24.-OECD: Manpower and Social Policy in the Netherlands. (OECD Reviews of Manpower and Social Policies, Nr. 6.) Paris 1967. 301 pp. DM 15.80Penrose, Edith T. : The Large International Firm in Developing Countries: The International Petroleum Industry. London 1968. George Allen and Unwin. 311 pp. 48 s.Pfeffer, Karl Heinz: Die Entwicklungsländer in soziologischer Sicht -Soziologische Aspekte der wirtschaftlichen Entwicklung. Hamburg 1967. Hoffman und Campe. 115 S.Plate, Roderich: Agrarmarktpolitik. Band I: Grundlagen. München 1968. 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DM 16.-Vasudevan, A. : Deficit Financing, Controls and Movements of Prices in India Since 1947. Bombay 1967. Allied Publishers Private Ltd. 239 pp. Rs. 16.-Youngson, A. J. : Britain's Economic Growth, 1920-66. London 1967. George Allen and Unwin. 306 pp. 35s.Neue Industriezentren an der weltwirtschaftlichen Peripherie Eine Replik*Economists and Economic Policy in Britain 1946-66 A Reply

Notes: The behavioural interpretation which Kaldor places on his famous identity between the investment-income ratio and the profit share, and which he attempts to justify by the erroneous claim that the investment-income ratio is an independent variable in the Keynesian system, rests crucially on a model of the firm's pricing behaviour. If an alternative pattern of pricing behaviour is postulated the direction of causation is reversed with the aggregate savings propensity, and hence aggregate demand, being dependent upon the distribution of income, and subsequently to Kaldor Cartter published a model in which both savings and investment are dependent upon the distribution of income. Both models centre upon the aggregate demand—income distribution relationship, but Cartter fails to incorporate any analysis of factor share determination and he does not show how a determinate level of income is achieved, whilst Kaldor's mechanism can only function in a full employment situation.In this paper the influences of marginal productivity and Kalecki's‘degree of monopoly’ are combined with Kaldor/Cartter-type propensities relating savings and investment to the distribution of income, thereby producing a model in which the level of income and the distribution of income are interdependent and involve the determination of a position of simultaneous equilibrium. It is argued that, by retaining the influence of marginal productivity and not being reliant on a full employment situation, the model is in fact more ‘Keynesian’ than Kaldor's so-called ‘Keynesian’ model.

Notes: This paper wants to show that endogenous treatment of interregional capital movements should be an essential element in the analysis of regional development. Capital movements to or from a region are assumed to depend on the real prices of interregionally traded goods and on the supply of labour, technical progress, the development of the demand for goods, and the accumulation of wealth in that region. In this view interregional capital movements are a permanent phenomenon of regional growth and therefore should not be considered in the analysis of regional growth by treating them as exogenous disturbances. To present his view the author is using a neoclassical model based on neoclassical models of interregional (international) trade. By introducing assumptions on competition, factor mobility, etc., which are different from those typically used in neoclassical analysis, he tries to modify the results and to bring them nearer to reality.