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In two papers and in a recent book I have presented theory and evidence which lead to the conclusion that a corporation's share price (or its cost of capital) is not independent of the dividend rate. As you may know, MM (Modigliani and Miller) have the opposite view, and they argued their position at some length in a recent paper.3 Moreover, the tone of their paper made it clear that they saw no reasonable basis on which their conclusion could be questioned. Since they were so sure of their conclusion, it would seem advisable for me to review carefully my thinking on the subject, and this meeting appears to be a good time and place to do so. [ABSTRACT FROM AUTHOR]

This article focuses on the beliefs and practices of Robert Torrens in the field of economics, particularly his views on monetary matters. In the paper of 1826, Torrens' thought was in an intermediate position between its early and final forms. He was still extremely clear about the dangers of convertibility. At the same time he already accepted the need to make the currency fluctuate in response to external pressures as a metallic currency would do, and to provide a better safeguard against over-issue than that provided by the real-bills doctrine. But he did not want a complete parallel between the fluctuations of the paper currency and those of a theoretical metallic one, hence his desire to link the paper to the modal value of gold. Moreover, he still felt that a currency plan should have safeguards against panics, and do more than merely avoid those fluctuations to which a less well-designed scheme of currency would be liable. The 1826 plan would have been an important link in the development of this powerful and original thinker even if it had been short lived. But there is a strong possibility that it stayed with him for some time. This scheme was certainly one to which Torrens devoted considerable care and thought, and it is an interesting link in the development of an important economist.

Presents several abstracts of papers delivered on economic in Melbourne, Australia. 'The Economics of an Offshore Island,' by G.G. Firth; 'Some Aspects of Private Pension Funds and the Capital Market,' by P.J. Rose; 'Long-Run Overseas Trade Prospects for Farm Products,' by R.H. Snape.

The article discusses the article "A Comparison of Three Measures of Socioeconomic Status," by George A. Lundberg and Pearl Friedman. According to the author, "Validity" in the article refers to a covariation of a set of observations obtained in one way and another set of observations obtained in some other way. But, this should be added: the second set of observations, the "validating" data, must refer to the materials with which one is directly concerned. For example, it is commonly asserted that if people wish to validate a sociometric scale they may correlate the results obtained through its use with the results obtained through the use of another sociometric scale. These and kindred problems are immediately brought into sharp focus by a comparison of three measures of socio-economic status. A comparison presupposes some criterion, otherwise it can only resolve itself into a series of statements to the effect that "those things differ in the following respects, which raises the question of "What of it? The Guttman weights were assigned entirely on the basis of the correlation between the item and a status factor which was carefully defined as the factor common to education, occupation, income and participation. If it can be shown that these weights are not valid according to the same assumptions, on another sample, then the weights can be criticized.

The article discusses the issues concerning the transport policy in Great Britain. The formation of transport policy has been and still is a confused world of ideology, interest, economics and several adjustment for political gain. A product of this complex system of interaction has been the Transport Holding Inc. The functions of the holding company are mainly concerned with investment business and the handling of the central pool of capital. The organization and structure of Transport Holding is presented. The company emerges as an interest group attempting to influence decision making, in a very similar way to the more commonly accepted private groups.

Presents several abstracts on economics. 'Organization and Innovation,' by F.J. Willet; 'Economic Theory and Underdeveloped Countries,' by D.H. Whitehead; 'Some Development Problems in Asian Countries,' by A.M. Kerr.

Comments on an article about public pressures and values affecting forest management and timber supply in the United States. Effects of the criticism made by preservationists against industrial forest landowners; Discussion on legislative issues; Problems that log export trade faces.

The author provides a response to an earlier article in this journal that criticized his work in the field of finance. The author comments on Durand's focus on statistical reliability. The author takes issue with Durand's criticism of the value of call deferment, claiming that the statistical sampling error was small. The author acknowledges that the second section of the paper presented a model, which was clearly untested, and argues that Durand cannot visit the same expectations on that model, which lacked data for testing. The author proposes that perhaps Durand's time had been better spent proposing a better solution.

The article presents a list of books and papers about economics. The books and papers include "The Oxford Economic Atlas of the World"; "International Affairs," edited by Alfred De Grazia, "A Bibliography of Higher Education in Canada," by Robin S. Harris, "Latin America," published in "The International Advertiser," "Agriculture and Growth," published in "Latin American Business Highlights," "The Problems of Federalism," published in "Executive," and "How Will Nuclear Energy Grow," published in "Common Market."

Professor Bellante's comments concerning our recent article on policy variables and price level movements offer some interesting, but hardly significant objections to our analysis. However, since a fundamental purpose of our paper was to stimulate further debate and interest in the relationships between policy actions and prices, we welcome the opportunity to continue the discussion. The need for additional work in this area is indicated by the continuation of inflation in 1970 and in 1971, despite a mild recession (the fifth in the postwar period) that was largely induced by intensive monetary and fiscal restraints. The analytical framework for our paper was based on a structural model that posited price level changes as a function of changes in total demand, labor costs, and price expectations. In turn, aggregate demand was linearly related to current-period and prior changes in monetary and fiscal variables and "other factors" stemming predominantly, from the private sector. [ABSTRACT FROM AUTHOR]

The article presents a critique of a study by Edward E. Edwards called "Changing Character of the Real Estate Mortgage Markets" that appears in this issue. Edwards, in his article, implies that mortgage funds are in short supply, which would impact liquidity and capital adequacy that would force savings and loan associations to leave the mortgage market. The author feels that Edwards does not prove that there is such a shortage and does not consider factors like mortgage rates or terms. The author also addresses Edwards' comments about capital requirements and says that his statement that the U.S. Federal Home Loan Bank Board restricting growth rates in capital shortage areas is erroneous.

In this paper we have been concerned with the methodology used to validate models of equity valuation. We have argued that after two decades of empirical research only the crudest sort of generalizations can be made about those factors explaining share price. This in an area that has benefitted from thousands of man-hours of research time, thousands of hours of computer time, and tens of thousands of dollars for related support activity. Few research fields in economics have been so well funded. In view of this continuing outlay of resources it seems prudent to consider strategies that may improve research findings this coming decade relative to the meager results of the past. [ABSTRACT FROM AUTHOR]

The purpose of the present paper is to examine the adequacy of variance as a measure of risk. Despite the abundance of literature on risk and portfolio diversification, virtually all of which uses variance as the measure of risk, there has been little progress on this problem beyond the original contributions. Tobin has pointed out that variance is the appropriate measure of risk if either the probability distribution of returns can be fully described by two parameters (e.g., normal) or the investor utility functions can be approximated by quadratics. Markowitz has suggested the possibility of using the semi-variance as a measure of risk, but for the most part his analysis of risk and portfolio diversification closely parallels that of Tobin. The subsequent literature has in general used variance as a measure of risk without further consideration. Moreover, those studies which have examined the measurement of risk explicitly either have provided only minor modifications to the Tobin-Markowitz analysis or have proposed alternative measures of risk which have been generally ignored. Thus, whether for reasons of convenience, theory or tradition, variance continues to be almost universally used as the measure of risk in portfolio models. The present paper takes a different approach to the problem of using variance as a measure of risk and reaches the conclusion that variance is ambiguous and yields conflicting results when calculated from information generally available to decision makers. If variance is in fact the best measure of risk (and thus appropriate for computing the locus of efficient portfolios and calculating the discount for uncertainty in capital asset prices) the question remains: which variance? In the case of a stock portfolio, the variance in the rate of return for an individual stock may be calculated from price information recorded over a shorter or longer period of time; moreover, observations from the same period of time when aggregated u... [ABSTRACT FROM AUTHOR]

My paper is basically an effort to develop for the U.S., which is assumed to be the key nation of the world economy, an economic adjustment tool other than the interest rate, to be used unilaterally to affect international and domestic economic conditions within the framework of international conventions and day to day working procedures of international business activity. The exercise is undertaken because multilateral economic adjustment procedures available to nations, and particularly to the U.S., are currently inadequate. The unilateral international economic adjustment opportunity considered becomes available to the U.S. when it adopts a value-added, or a similar tax, as a major revenue source of the Federal government. Because of the wide acceptance of the anti-indirect tax arguments in the U.S., it has been considered necessary to devote considerable space at the end of the paper to the development of the pro-indirect tax position. [ABSTRACT FROM AUTHOR]

The article presents a critique of an article by Robert P. Shay called "The Price of New Automobile Financing" and an article by F. Thomas Juster called "Consumer Sensitivity to the Price of Credit," which both appear in this journal. The author points out that neither himself nor Shay can find a better way to find the true credit cost of an installment loan. The problem lies in changes to the price of credit being subject to the credit services available to the consumer. Another point which the author brings up is Shay's assertion that competition is increased among sales finance companies. Juster's paper on consumers' debt goals and their susceptibility to finance rates raises, in the author's mind, the issue of whether or not loans should be given to consumers who have collateral or those who are creditworthy.

This article presents a list of books published in this issue of the journal, including "A Program for Federal Tax Revision," by Harvey E. Brazer, "Estimated Distribution of Minnesota Taxes and Public Expenditure Benefits," by O.H. Brownlee, and "Industrial Development," by Murray D. Bryce.

This paper considers the properties of the Divisia, or chain-link, index, as they relate to the argument that this is the most appropriate index for use in studying the sources of economic growth. The great advantage of the Divisia index is alleged to be its ‘accuracy’, that is, its capacity to combine time series of prices and quantities to give a true reflection of the height of a utility or production function over time. The paper shows that there are circumstances where the confidence in the accuracy of the Divisia index is justified, but that the conditions required are very restrictive and typically do not obtain in the contexts where the Divisia index is used. Misplaced confidence in the Divisia index has led to errors of interpretation that might otherwise have been avoided, and has given rise to a distorted view of the process of economic growth. [ABSTRACT FROM AUTHOR]

Comments on an article about the treatment of serial correlation in the regression residuals of estimated economic relationships. Information on the test of the acceptability of the common assumption that the observed serial correlation was caused by the errors of the regression equation; Use of the estimated regression coefficient.

The article discusses the paper on measurement as scientific method in economies by Leland B. Yeager, Professor emeritus of economics at Auburn University. Yeager does not cite enough from the works of any individual to justify convicting that person of such a restricted understanding of scientific method as the phrase "science is measurement" seems to imply. Not only is measurement alone far from the whole or even the significant portion of scientific method, but also measurement plus mathematics must be denied the right to claim that position. In the first portion of his paper Yeager discusses various applications of scientific method in the physical sciences and points out that numerous uniformities of relationships among various quantitative measurements have been found. Yeager understands that the degree of accuracy with which those uniformities of relationships have been measured has covered a wide range. When Yeager goes on to assert that the essential function of measurement in the natural sciences is largely replaced in economics by direct empirical knowledge of the most generally applicable principles and concepts, he is describing economics as it has been and not as it may be.

Protection and real profits. This paper introduces the element of profits into the Stolper and Samuelson analysis of protection. Profits may arise in the short run when some factors are not movable and even in long-run equilibrium in cases discussed in the paper. It is shown that, in the short run, protection is likely to increase profits in the protected industry, while real wages will not necessarily rise even if the protected industry is lab our-intensive. In the long run, no general proposition emerges. However conditions are presented in which protection will increase rents in the protected industry even in the long run. [ABSTRACT FROM AUTHOR]

This article provides an alternative analysis of the economic theory of clubs presented by J. M. Buchanan. This article begins by describing the salient feature of Buchanan's analysis, that is the explicit specification of the numbers of individuals consuming collective goods. This feature is the most important innovation of Buchanan's analysis. It is followed by discussing how Buchanan derived his Pareto-optimality conditions. The next part of the paper will present the alternative to Buchanan's analysis. This analysis shows that once the conventional equality for private goods and conditions are satisfied, a Pareto optimum has been achieved, assuming that the second-order conditions are also satisfied. These conditions, however, do not imply Buchanan's condition. Then, the paper will turn to the geometry of both analysis. Here it will be shown that Buchanan's analysis generated a intersecting total benefit and total cost curves while the analysis proposed here elicited parallel total benefit and total cost curves. Finally, the paper considers a complication to both analysis--the number of clubs. It is noted that the both analysis assume implicitly that the number of clubs for each collective good is unity, or, at least, they do not include an explicit analysis of the number of clubs itself. To show the implication of this matter, an example is illustrated.

This paper presents a novel technique for deriving Soviet industrial output data by branches. It is noted that Soviet research has been handicapped by the lack of availability of output level data by branches although indexes are available. The technique presented in the paper for deriving Soviet branch output thus represents a breakthrough in the study of Soviet industry. The said claim is substantiated by successfully exposing the estimates so derived to cross-checks of different kinds.

The article presents information on several articles and books relating to economics, sociology and forestry. The article provides information on major journals that published articles on rural life more or less regularly. Every year the Congress national des Sode'te's savantes includes many papers on rural history, subsequently published in its transactions. Those for the 89th and 90th congresses, held in Lyons in 1964 and in Nice in 1965, have appeared; those for the 91st congress, held at Rennes in 1966, are still awaited. In 1967, there have been two articles on economic thought which, significantly, were written by foreigners and deal with the second half of the eighteenth century. One of them is a contemporary text by Chydenius, who was a Swedish forerunner of Adam Smith. Some articles on social history touch on the interests of the economic historian, including Albert Soboul's on "Description et mesure en histoire sociale." As always, some French historians have published work on foreign history.

Five themes have been developed in this paper. First, the gunslinger behavior of financial managers has not been characteristic of the profession overall. In the area in which financial excesses were supposed to have been greatest, conglomerate mergers, empirical evidence demonstrates that on the average a useful economic function was performed. Second, the finance function in its most meaningful definition is effective interaction with the operating and planning activities in the firm. The newer emphasis on the systems approach is incomplete in characterizing the finance function as "designing the metasystem." The correct emphasis of a systems approach is recognizing the interactions of the many parts of a firm to achieve overall optimization. Third, the new theory of finance provides an improved framework for understanding the role of the instruments and institutions of finance. It extends and illuminates economic theory as well. The various branches of finance are unified in the new theory. Fourth, because world economic developments have introduced new instabilities. anticipating and adjusting to changes in the financial environment are of increased importance. The international dimension has become integral to managerial finance. Fifth, the closed systems approach of finance must move to recognize even broader environments in an open systems framework. The objective function to be maximized has become multi-valued, including social criteria. The principles of finance are increasingly recognized to be applicable to a wider range of purposive organizations other than business firms: these include health care delivery, education, mental hospitals, religious institutions, prisons, and protest organizations of various kinds. Finally, the financial managerial expertise is increasingly required for application to broader social problems. Some may disagree, asserting that these are temporary fads. But the underlying forces seem to be fundamental and will incr... [ABSTRACT FROM AUTHOR]

In this paper we have shown that a necessary condition for the existence of financial intermediaries is the existence of imperfect divisibility of primary securities. In turn, a necessary condition for imperfect divisibility is the presence of transactions costs broadly conceived. Under such conditions, there is no unambiguous measure of the risk of an asset since that risk must be measured relative to a specific portfolio. But with imperfect divisibility, attainable portfolios vary with an investor's scale of wealth. Our purpose, however, has not been to demonstrate that by relaxing the assumptions of the conventional model, we can get different conclusions. That would be a rather empty exercise. Rather, we have tried to show that just as the theory of perfect competition is useful as a benchmark in the analysis of industrial organization, so the conventional model can be used as the starting point for an analysis of the implications of real world 'imperfections.' [ABSTRACT FROM AUTHOR]

This paper presents an analysis of a special form of resource allocation, corporate philanthropic contributions. Historically, economists have tended to ignore private philanthropic behavior and to regard it as economically irrational. Corporate philanthropy is especially subject to the question of rationality. The conceptual issue raised, however, suggests that much insight might be gained into the nature both of corporations and of philanthropic contributions through an exploration of the matter involved. [ABSTRACT FROM AUTHOR]

This paper presents a partial-equilibrium theory of member-bank borrowing from the U.S. Federal Reserve System. This theory, which derives from the work of several economists, portrays bank borrowing as primarily a short-run phenomenon. Faced with an immediate need for additional reserves, banks must weigh the costs of reserve adjustment against the disutility of increased debt to the Federal Reserve. The formulation adopted allows to parameterize the central forces of various competing theories, namely, those of banker profit, need, and reluctance, and of Federal Reserve surveillance. [ABSTRACT FROM AUTHOR]

The total volume of commercial bank deposits in the country is determined largely by the Federal Reserve System in accordance with the needs and objectives of the economy. The distribution of these deposits among individual banks and areas, however, is determined by market forces. The purpose of this study is to identify and measure the relevant structural and economic variables associated with deposit growth by state. The analysis is organized within the framework of the demand for money. The emphasis of the study is empirical; the results should, in part, replicate the findings of earlier demand for money studies. The first part of the paper identifies briefly the factors typically associated with differential deposit growth. The second part specifies these variables in a model, estimates the parameters and describes the findings. [ABSTRACT FROM AUTHOR]

The article presents response of Leland B. Yeager, Professor emeritus of economics at Auburn University to the critical analysis of his paper related to measurement as scientific method in economies published in the journal "American Journal of Economics and Sociology." The progress in physical science is toward increasing precision in numerical results that can be obtained repeatedly by workers in different countries and at different times. No satisfactory numerical expression for the intensity of that preference has been devised. The distinction hinges not on the precision with which numbers may be measured but on the general validity of numerical formulation. The criteria or standards governing acceptance of assertions as warranted are broadly the same in economics as in all science, namely, ability of the observations and logic supporting the assertions to stand up under repeated check by qualified students. Much introspective knowledge underlying economic theory does meet the tests of warranted assertibility since human beings can communicate with one another and compare their introspections and since human beings reveal themselves as broadly alike in certain basic respects describable in terms of desires and motives and purposive actions.

The article presents a list of books received, including "Resource and Output Trends in the United States since 1870," by Moses Abramovitz, "Comparative Economic Development," by Ralph H. Blodgett and Donald L. Kemmerer, and "An Introduction to Education in American Society," by Raymond E. Callahan.

The paper contends that family interaction can fruitfully be analyzed by means of an exchange model. A set of hypotheses about the parent-child relationship is deduced from several basic propositions involving resources and power. [ABSTRACT FROM AUTHOR]

This paper examines the case of backward linkage in the Malaysian engineering industry. In the late 1950's and early 1960's, "linkages" occupied a prominent place in the literature on development economics as a means of increasing capital formation and the rate of economic growth. Section I of the paper looks at the concept of linkages as it has been presented in the development economics literature. Section II shows how linkages can be used in a study of the economic effects of export growth and explains the choice of engineering as a case study. Section III discusses the backward linkage from Malaysian export industries to engineering, and Section IV asks why engineering production developed in Malaysia. Section V puts forward some general conclusions.

Copyright of Rural Sociology is the property of Wiley-Blackwell and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Presents news briefs on Canadian Economics Association as of August 1970. Annual report of the managing editors of the' Canadian Journal of Economics'; List of papers that were presented at the 1970 meeting of the Canadian Economics Association.

Analyzes the Walrasian tattonnment (WA) which describes the economic system controlled by an auctioneer and the rule by which he recalculates prices. Out-of-equilibrium cost function; Effect of the cost of adjustment of a firm reacting to a change in an exogenous parameter; Optimal characteristics of the WA price adjustment equation.

Presents news briefs concerning the Canadian Economics Association as of October 1969. Minutes of the annual meeting on June 4-6, 1969; Report of the managing editors of the 'Canadian Journal of Economics'; Papers presented in the meeting.

This research paper attempts to explore the fiscal relationships underlying the provision of elementary and secondary public education by introducing a simultaneous equation model. The model is constructed under the assumption of maximization of community welfare. It is essentially a demand and supply equation system for public expenditures on education. The equation system consists of an expenditure revenue function. Economic, socioeconomic, and institutional variables are included in the model. One section in the paper describes what is necessarily an attempt to estimate empirically the general model outlined in the paper. The formulation used here is limited by the fact that the marginal rates of return and marginal cost of funds for education are difficult, if not impossible, to observe. These two variables determine the slope of demand and supply curves respectively. This paper is mainly concerned with factors affecting the position of demand and supply curves rather than the slope of the curves themselves.

A list of articles related to management and economics that were published in several journals is presented. The articles include "Yearbook of the United Nations, 1963," "The World Almanac and Book of Facts, 1965," edited by Harry Hansen, and "Population Studies," edited by D. V. Glass.

The article presents a list of reference materials and papers on economics, agriculture, business and finance which were published in various journals. Some of the papers in the list include, "Gino Luzzatto," by various authors, published in the journal "Muova Rivista Storica, XLIX," are two issues dedicated to the memory of Gino Luzzatto, recalling his scholarly work and his high standing as a man and a teacher, "Ricordo di Yves Renouard," by F. Melis, published in the journal "Economia e Storia, XII," "Yves Renouard, uno storico amico dell' Italia," by A. Sapori, published in the journal "Mouva Rivista Storica, XLIX," is a commemoration and a bibliography of Yves Renouard, "I beni comunali e Forganizzazione del villaggio neli' Italia superiore fino al Mille," by G.P. Bognetti, published in the journal "Rivista Storica Italiana, LXXVII," describes the institutions of the early Middle Ages on lands of collective property and the passage to lands of communal property in the eleventh century.

The article is in memory of Philip Andrews, with whom the author has worked in the journal, "Oxford Economic Papers." Philip's enthusiasm was unflagging and his energy inexhaustible. He was always full of ideas about the ways in which the policy should evolve and, at the same time, he was ready to devote unlimited effort to the exacting labor of producing the journal without secretarial assistance. Philip had a strong sense of continuity. He was anxious to ensure that the lines of research, both empirical and theoretical, with which he had been associated should be carried forward and he became the leading member of the Oxford Economists' Research Group. Philip read widely, far beyond the field of economics, both in philosophy and in general literature. Moreover, if he was, in one sense, a genuine revolutionary in his own subject, he was also a traditionalist in that he looked back with regret to the works of an earlier generation when the subject was less narrowly confined within a barrier of conventional assumptions and less exclusively concerned with the manipulation of equations.