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The desirability of politically creating currency unions among otherwise sovereign states is an ongoing debate. The benefits of the U.S. currency union and the benefits of other politically manufactured currency unions are assumed to be obvious, namely a reduction in monetary instability and exchange rate transaction costs within the union thereby stimulating long-run economic growth. Price indices, exchange rates and market-generated transaction data from 1748 through 1811 are used to determine when the market moved from state currencies to the U.S. dollar and to assess the non-wartime performance of prices, exchange rates, and purchasing power parity before versus this transition. The British North American colonies were the first modern western economies to experiment with large-scale government issuance of flat paper money. Colonial legislatures backed their paper money by linking it not to specie but to future taxes and mortgage payments designed to withdraw it from circulation in a timely fashion. The only continuous data for evaluating colonial/state monetary performance are price indices. Stability of prices is the hallmark of a well-managed monetary regime. New issues of state currency were constitutionally prohibited after 1787 and enough old state currency would be taken out of circulation through tax redemption by the early 1790s that the paper-money medium fell to banknotes by default.

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.

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.

This paper summarizes the book and assesses the reviews contained in the four contributed papers. Gregory Clark provides convincing arguments that extend the book's forecast that future technological change will be slower. Nicholas Crafts shows declining mortality and shorter work hours greatly increase welfare-augmented TFP growth during 1929-50. Benjamin Friedman points out that optimism about future technological change casts doubt on future employment growth, while technological pessimism implies employment optimism. Daron Acemoglu and co-authors emphasize the institutional environment that influences the timing and magnitude of innovation. [ABSTRACT FROM AUTHOR]

This paper reviews some of the major claims in Robert Gordon's Rise and Fall of American Growth. His argument that growth of conventional real GDP per person is well below that of real living standards is accepted. It is shown that adding an imputation to GDP for reductions in mortality raises growth substantially, especially between 1929 and 1950. Gordon is also right that total factor productivity growth peaked in the second and third quarters of the twentieth century but his claim that there was a 'great leap forward' in the 1940s, stimulated by World War 2, is not persuasive. [ABSTRACT FROM AUTHOR]

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

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

The article presents 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 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 article assesses the goals of economic development in the U.S. The theme of this paper is the need to be more specific on the goals of economic development and the interdependence between values and goals. The paper shall first review some recent work which bears on these relationships. Then proposed minimum humanistic goal for development will be discussed and, finally, the article shall suggest development strategies that may permit achievement of that goal. The currently accepted definition of development focuses upon the creation of conditions for self-sustained growth in per capita gross national product and the requisite modernization of economic, social, and political structures implicit in the achievement of this goal. Most of the discussion concerning development strategies has been in terms of contemporary tradeoffs among major policy packages, rather than in terms of sequences of more or less pure strategies. A cursory survey of the dynamic processes that have led to the development of the currently industrialized nations suggests, however, that the development process has in fact proceeded as a sequence of pure strategies, rather than in a progression of mutually balanced strategy mixes.

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.

Today's weakness in the US economy results from lack of aggregate demand, due to high and growing inequality, underinvestment in public infrastructure and technology that is complementary to private capital, continuing mild austerity, difficulties encountered in making the structural transformation from manufacturing to a service-based economy, and a financial sector failing to provide adequate funds to SMEs. An agenda to restore growth includes a carbon price, inducing climate investments; increased public investments in infrastructure and technology; fighting inequality through redistribution and rewriting the rules structuring the economy; and reforming the financial sector and the global reserve system. [ABSTRACT FROM AUTHOR]

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

In the American South, postbellum economic development may have been restricted in part by white landowners' access to low-wage black labor. This paper examines the impact of the Great Mississippi Flood of 1927 on black out-migration and subsequent agricultural development. Flooded counties experienced an immediate and persistent out-migration of black population. Over time, landowners in flooded counties modernized agricultural production and increased its capital intensity relative to landowners in nearby similar non-flooded counties. Landowners resisted black out-migration, however, benefiting from the status quo system of labor-intensive agricultural production. (JEL J15, J43, N32, N52, N92, Q54, R23) [ABSTRACT FROM AUTHOR]

This paper develops a new method to uncover the causal effect of trust on economic growth by focusing on the inherited component of trust and its time variation. We show that inherited trust of descendants of US immigrants is significantly influenced by the country of origin and the timing of arrival of their forebears. We thus use the inherited trust of descendants of US immigrants as a time-varying measure of inherited trust in their country of origin. This strategy allows to identify the sizeable causal impact of inherited trust on worldwide growth during the twentieth century by controlling for country fixed effects. (JEL N11, N12, N31, N32, O47, Z13) [ABSTRACT FROM AUTHOR]

The article uses two data sets- the 1940 and 1950 census files- in combination with the three subsequent census files to describe long-run trends in black poverty. The paper described a forty-year record of progress in reducing black poverty. The optimism that should have resulted from that progress was tempered by three other events of the 1970's: the accelerating breakup of the black family, the growing numbers of black men with little contact with the labor market, and a continued slowdown in economic growth. As a result, we have entered a new racial era in the U.S., in which black labor market progress no longer guarantees improvements in economic welfare, especially for the black underclass. Trends in labor market wages of black men and women represent only a first step in understanding the changes in black poverty that have taken place. The paper concludes with an examination of the downside of black economic progress-the in- creasing disengagement of many black men from the labor market.

The article focuses on the distribution of state incomes and the differential growth of sectoral employment. The degree of income concentration varies significantly among countries and among states of the U.S. It is commonly accepted by economists that the concentration of income is less unequal in high income economies. The relation between low income concentration and high aggregate income is ascribed to such factors as the distribution of property income, the education of low income workers, and the relative size of the nonagricultural sector. An implication of the hypothesized relation between income concentration and the relative size of nonagricultural employment is that intersectoral labor movements decrease income concentration. So far, this implication has not been tested. In this paper, the relation between changes in income concentration and changes in sectoral employment within states of the U.S. is tested directly. The findings in this paper confirm the hypothesis that changes in income concentration are related to differential growth rates of sectoral employment within states.

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.

Robert Gordon's The Rise and Fall of American Economic Growth compellingly shows how technical innovation, stimulated by the country's institutions, has radically improved the living standards of the citizens of the US. We conduct an empirical investigation of the impact of the capacity of the US state, as proxied by the presence of post offices, on innovation. We show that there is a strong association between the number of post offices in a county and patenting activity. Our evidence suggests that part of story of US innovation is the capacity and reach of the US state. [ABSTRACT FROM AUTHOR]

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

We present a theory of spatial development. Manufacturing and services firms located in a continuous geographic area choose each period how much to innovate. Firms trade subject to transport costs and technology diffuses spatially. We apply the model to study the evolution of the US economy in the last half-century and find that it can generate the reduction in the manufacturing employment share, the increased spatial concentration of services, the growth in service productivity starting in the mid-1990s, the rise in the dispersion of land rents in the same period, as well as several other spatial and temporal patterns. (JEL J21, L16, L60, L80, O33, R11, R32) [ABSTRACT FROM AUTHOR]

We develop a stylized model of frictional local labor markets with the goal of studying the efficiency of unemployment differences across areas. The model adapts the widely used Diamond-Mortensen-Pissarides framework to a local labor market setting with a competitive housing market. The result is a simple search analogue of the classic Roback model that provides a tractable environment for studying the effects of local job creation efforts. [ABSTRACT FROM AUTHOR]

The article examines the impact of economic growth on poverty. In particular, this study examines the impact of economic progress from 1970 until 2005 across populations of black, Hispanic, and white people at the level of the census region. The study examines regional differences in the U.S. regarding industry and economic histories. The study concludes that growth in the gross domestic product (GDP) and declines in unemployment rates reduce poverty. Also discussed is the sensitivity of black poverty rates to economic growth.

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

Theory restricts short-run job creation and destruction responses and cumulative employment and job reallocation responses to allocative and aggregate shocks. We formulate these restrictions and implement them for postwar data on U.S. manufacturing. Allocative shocks are the main driving force behind cyclical movements in job reallocation, but their contribution to employment fluctuations varies greatly across alternative identification assumptions. Also, the data compel one or both of the following inferences: aggregate shocks greatly alter the shape and not just the mean of the cross-sectional density of employment growth rates; allocative shocks cause short-run reductions in aggregate employment. [ABSTRACT FROM AUTHOR]

Probes the question on whether income inequality hampers future economic growth based on the paper of Torsten Person and Guido Tabellini or (PT). Criticisms on PT's model of economic growth and income inequality; Presentation of data from the U.S. states which explores the relationship between economic growth and income inequality; Discussion of the inequality measure.

This paper analyzes the impact of fundamental tax reform on the dynamics of U.S. economic growth over the next quarter century. Here two alternative approaches to tax reform has been considered. The first is a flat-rate consumption tax, similar to the one introduced by Majority Leader Dick Armey and Senator Richard Shelby in the 104th Congress. The second is an income-base value-added tax, also with a flat rate. These taxes would be substituted for existing individual and corporate income taxes at federal, state, and local levels. A full description of the two proposals is given by the Joint Committee on Taxation. The simulations of U.S. economic growth under alternative tax policies are based on an intertemporal equilibrium model of the U.S. economy. The model is built around submodels of investment and saving based on rational expectations. The price of investment goods in every period is based on expectations of future capital service prices and discount rates that are fulfilled by the solution of the model.

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

The effect of developing country loan reschedulings on large U.S. banks is investigated using an event study methodology. The major finding concerns the evolving nature of the impact of loan reschedulings. During 1978-80, reschedulings had a positive effect on bank returns, in contrast to the negative impact found for the 1981-83 period. An explanation for these results is provided by a model of the rescheduling process that recognizes the noncompetitive aspect of rescheduling negotiations. [ABSTRACT FROM AUTHOR]

This paper examines the cyclical behavior of price/marginal cost margins for U. S. manufacturing. Short-run marginal cost is markedly procyclical. In most industries, output price fails to respond to the cyclical movement in marginal cost; so price/marginal cost margins are markedly countercyclical. My results contradict business cycle theories that explain low production in a recession by a high real cost of producing: they support theories that explain low production in a recession by the inability of firms to sell their output. [ABSTRACT FROM AUTHOR]

To explain past and predict future, regional economic performance in the U.S. over the 1967-95 period, this paper constructed an eight-region model with 53 sectors per region. Output in each of 49 private nonfarm industries is divided into goods and services for intermediate use and final consumption within a region, and exports from the region, both interregional and international. Changes in region-serving output are generated endogenously by changes in requirements for intermediate goods and services, via input-output relationships, by changes in household, investment, government, and other final demands; and by changes in the extent of regional self-sufficiency. Changes in relative labor intensity and unexplained trend complete the equation for predicting employment in each sector. Changes in wage rates, by sector, are explained by changes in labor demand by occupation, recognizing differences in wage responsiveness among skill groups and by changes in overall labor supply due to changing population and participation rates.