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This article presents a discussion of E. M. Bernstein's paper about the financial problems of economic development. Bernstein discusses five facets of this problem: to decrease the size of the development program, to energize the inflow of foreign capital, to encourage domestic savings, to gather together the available resources, and to allocate the resources available to the private sector in a way that will stimulate the greatest increase in production. The author believes that this analysis leaves no room for argument.

Presents abstracts of studies about economic development and trade, presented at a convention in Rome, Italy in September 1965. 'A Factor Analysis of the Interrelationship Between Social and Political Variables and Per Capita GNP,' by Irma Adelman; 'An Almost Consistent Intertemporal Model for India's Fourth and Fifth Plans,' by Joel Bergsman.

This article presents information regarding the problems faced by the developing countries in their course of development. The problems faced by the developing countries of the world are numerous and of critical importance. These problems include those of industrialization and economic development, of changing traditional social institutions such as stratification and power mechanisms so that they facilitate rather than inhibit modernization, and of providing ever-increasing percentages of citizens with an education that teaches the economic and social skills requisite to assuming rewarding roles in a changing society. However, in the array of social and behavioral sciences that have been brought to bear upon the problems of developing countries, social psychology has been noticeably absent. Anthropologists have carried over their interest in traditional societies to include concern with the problems these societies face in the processes of modernization and development, particularly as these processes affect values and institutions such as the family and religion.

The article presents a list of papers presented to the 1963 Conference of the International Association for Research in Income and Wealth. The conference was held during June 23-28, 1963. There were five sessions, which covered topics like national incomes, growth rates, economic growth, etc. Some of the papers were "Rates of Growth in Israel's Economy," by A.L. Gaathon; "A Statistical Evaluation of the Rate of Growth of National Income in Postwar Japan," by M. Shinohara; "Reliability and Usefulness of Short-Term National Accounts: Australia," by Don Youngman; and "New Evidence on Demand Elasticities," by H.S. Houthakker.

The article presents a discussion of papers written by Norris Johnson and John Scanlon. These authors discuss economic forecasting from 1957 to 1967. Particular attention is given to how the demand for capital funds are crowding the supply during most of this period but not in such a manner as to give rise to major capital shortages. The author states that there is no proof positive way of assessing the reliability of the assumptions made in this paper or their implications for the adequacy of funds.

The article presents a discussion of the research paper by Simon Kuznets on the difficulty of making an orderly pattern of long-term change and how it lies in the absence of an effective theory or even of a working hypothesis. The paper deals with economic forecasting. The reviewer presents an analogy to gross national product forecasting. Examined is the rise of the gross national product in 1953 and what it is forecasted to be in 1965. Also commented on is the annual capital increase in real Gross National Product.

Information about several papers discussed at the conference "Economic Development of European Socialist Countries," which was held in Plovdiv, Bulgaria on November 30 to December 6, 1964 is presented. The various reports presented focused on the comprehension of the economic trends and problems in Eastern Europe. Such features and issues considered including balance of payments, labor skills, and technological innovations.

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."

The article focuses on some of the problems developing countries face as it pertains to central banking. This study will briefly survey the role, problems, and the latency of central banks in developing countries, with some discussion of the methodology and techniques of monetary policy that have been utilized. In order to keep the paper's content manageable, no attention will be given to foreign exchange and payment policies, although these are taken care of by the central bank and are a significant aspect of monetary theory.

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]

Radical changes, up and down, have taken place in the estimates of growth in total factor productivity in the U.S. made by different economists, or by the same economists at different times. If such estimates provide ‘some sort of measure of our ignorance,’ as Abramovitz once put it, we seemed to be a lot less ignorant in 1927 (when Cobb and Douglas published their famous paper), or in 1967 (when Jorgenson and Griliches published theirs), than we were in the years between (when Schmookler, Abramovitz, Kendrick, and Denison completed their studies), or than we are today (when we have, or will soon have, revised estimates by Denison and by Kendrick, and new estimates by Christensen and Jorgenson). Viewed in this perspective, many questions may be raised about the significance of the current estimates that something like a third or more of the rate of increase in U.S. national output is ‘due’ to increase in productivity, as well as about the concepts, data, and methods that underlie the estimates. A list of particular subjects worth considering for research is given and each is briefly discussed. [ABSTRACT FROM AUTHOR]

This paper is concerned with the estimation of an econometric model designed to test the Modigliani-Miller (henceforth MM) hypothesis. The primary interest is not in the theoretical validity of the hypothesis. The major sources of theoretical disagreement with Modigliani and Miller arise from the key role they impute to the arbitrage process and the effect of leverage on the expected value of the returns to equity through the increased probability of bankruptcy. These issues have occasioned a number of important contributions in recent years (see especially [2] and [23]). The first section of the paper provides a skeletal outline of the MM hypothesis and discusses the problems of formulating an appropriate econometric model. In the second section an econometric model is developed, which, while drawing on the ideas of several
1 This study is part of a continuing program of research into company financial behavior financed by a grant from the Social Science Research Council. I am indebted to Mrs. Eileen Sutcliffe of the Institute of Social and Economic Research, University of York, and Milton Chen of New York University for assistance with data collection and computer processing, and to the personnel of the SRC Atlas Computer, Chilton, the University of York Computer Center and the New York University School of Commerce Computer Center.
2 References in square brackets are listed on pp. 161-2, below.
3 In terms of the implicit aggregation procedures, the old Liquidity-Preference/ Loanable-Funds controversy has yet to be satisfactorily resolved.
different writers, has certain elements of originality in the way it seeks to incorporate growth and leverage. Finally, in the third section the results of the econometric tests are evaluated. [ABSTRACT FROM AUTHOR]

The Warsaw Conference on the Marxian theory of Development centered on two related questions; (1) is there in Marxism a distinctively Marxian theory of development? (2) if there is, what guidance can it give today to countries at varying levels or stages of development? In his paper "The Marxian Theory of Development and Socialist Economic Policy," professor J.S. Berliner, held that the sociologist Karl Marx was primarily concerned with the process of capitalistic development. The Marxian doctrine, Berliner contended, applied primarily to fully developed capitalistic economies, their fundamental internal contradictions being supposed to lead inevitably to their bursting asunder and to their supersession by socialism. The title of the paper which professor W. Brus presented jointly with professor K. Laski was "Essentials of the Marxian Approach to Problems of Economic Development." For them the fundamental category of the Marxian theory of economic development was perhaps one which is both social and economic and is summed up in the expression mode of production. It would appear that Marxism does not furnish a set of formulae for development, from which practitioners can easily find out what to do in specific cases. Marxism does seem, however, to offer a box of tools, a set of canons, a method indicating how one might go about formulating what one wants to do by way of development.

The theory of optimum economic growth that has been developed in the past few years is concerned primarily with the division of the national product between consumption and investment in order to attain the pattern of capital accumulation which the society as a whole prefers to all the alternative schedules. It has been discussed within the conceptual framework originated with Frank Ramsey's classic work, where the basic premises are those of a planned economy within which decisions concerning the allocation of scarce resources are made by central planning authorities. The emphasis placed upon the role of centralized planning is partly due to the growing awareness, based upon both the prewar experiences of the more advanced countries and the postwar experiences of the less developed countries, of the inadequacy of the market mechanism to bring about the desired pattern of economic growth. In a static environment, the (Pareto-) optimality of the allocation achieved in a perfectly competitive market has long been established as one of the basic propositions in welfare economics, but the analysis has not been extended to the case of a greying economy, except for a number of studies originating with Samuelson and Lerner. The purpose of the present paper is to compare the relationships of the growth pattern achieved under the market mechanism with these of optimum growth, in terms of the analytical apparatus recently developed by Koopmans, Cass and others. The concept of optimum economic growth adopted here, however, differs from that commonly used in the optimum growth literature, where the welfare criterion by which various time-paths of consumption are compared with each other is assumed to be exogenously given, in general independently of the preference schedule of the members of the society. In the present paper, we shall instead postulate that the aggregative behavior of the economy may be described by that of the representative individual unit, possessing a... [ABSTRACT FROM AUTHOR]

SUMMARY The paper presents a model of interest rates structure with direct implications to the saving-investment process. The capital market is divided into private and government sectors, which operate under the constraints of an investment-opportunities function and a cost of capital function. The model provides the government with a degree of freedom to differentiate the lending rate from the borrowing rate. This allows the government to conduct a capital policy aimed at achieving a certain desired level of savings without disturbing the process of capital allocation. The technical operation of the model is based on an institutional structure existing in many developing countries. It allows thereby a direct application for empirical research. The paper is concluded by an empirical testing of the interest rate structure in Israel and of the consistency of the Israeli Government capital policy. [ABSTRACT FROM AUTHOR]

The article presents a list of books and papers about economic development and aid. The books and papers include "Development Planning," by Albert Waterston, C.J. Martin, August T. Schumacher and Fritz A. Steuber, "Unsolved Problems of International Development," published in "International Development," "Patterns of Economic Growth," "Developing Countries," published in "Realites," "What Do We Know About Planning," published in "International Development Review," and "Development Finance: Planning and Control," by Ursula K. Hicks.

Information about several papers discussed at the conference "Intra-Country Discontinuities in the Process of Economic and Social Development in Latin America" which was held in Buenos Aires, Argentina on September 8-16, 1964 is presented. The various reports dealt with topics including international cooperation, methodology of comparative social research and socio-economic development. The convention featured several social scientists including Davis Kingsley, Bruce Russet and S. Gostkowsky.

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

That the extent of misuse of "scarce" capital is greater in less-developed economies than in advanced countries opens wide the question of why that should be the case. Two answers that naturally follow from the preceding analysis are (1) that distortions in the factor prices are such that they do not reflect real scarcities or (2) that perversities or rigidities in managerial response are such that production decisions do not respond to those prices. The comprehensive analysis of this subject, however, is left to a separate study. (Another issue which is not discussed has to do with the ratio of the firm's fixed to working capital. Several aspects of this subject have been examined in other contexts: Kim, 1968.)
In this paper the hypothesis that there is under-utilization of capital in less-developed economies has been defended on the basis of the sectoral output-capital ratios (Kim, 1969) and direct estimates from earlier studies (Jorgenson and Griliches, 1967; Kim and Kwon, 1973; Winston, 1971, 1974d). We now hope that, given the plausibility of the hypothesis as suggested here, others may also carry out further studies for other economies in order to measure the degree of utilization directly. [ABSTRACT FROM AUTHOR]

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

Autocorrelations are found in the disturbance terms of regressions employed by L. R. Klein and R. F. Kosobud in a global model of growth employing five celebrated ratios of economics. This paper summarizes the KleinKosobud conclusions, modifies them by removing the autocorrelations, and extends the model to include more recent years. The modified conclusions hold even with the added observations. [ABSTRACT FROM AUTHOR]

This paper presents the characteristics of the National Accounting System of Hungary and outlines its development in the last decades and the insufficiencies still existing. Hungary has joined with great interest in the work performed within the frame of the United Nations Statistical Commission concerning the development of the Systems of National Accounts, being interested in applying—as far as possible—the results of the revision of the SNA and MPS in its national practice. The paper first presents a conceptual matrix containing all the major items in the MPS system in order to explain the contents of the items and the interdependencies among them. In this connection a brief account is given of the major differences between the SNA and MPS. The following part of the paper presents the National Accounting System introduced in Hungary in 1968. It is put also within the framework of a matrix, which supplies the items of both the SNA and MPS by means of simple aggregation as well as satisfying the national requirements, so that it is possible to compare the structure and development of the Hungarian economy with those of any other countries. The major differences between the Hungarian system and the current MPS and the revised SNA are then presented. [ABSTRACT FROM AUTHOR]

This paper examines rural elementary education in Brazil in the light of historical phenomena and recent socioeconomic development. Contemporary rural society is described from the point of view of its social structure and the way in which rural educational problems emerge from this context. The paper concludes with a statement and evaluation of attempts on the part of the federal government to solve problems of elementary education in rural areas. [ABSTRACT FROM AUTHOR]

SUMMARY Does export instability interfere with economic development? Work by M cB ean answers in the negative. He finds no systematic relationship between instability and economic growth. This paper asks three questions about M cB ean's work: (1) Has he measured the relevant variables appropriately? (2) Were special factors at work in the period he studied (1950-58) ? (3) Was his sample of countries representative? It presents a broader statistical analysis, using a different index of instability, two decades of data, and more countries. In general, the findings do not contradict M cB ean. But calculations using different time periods (1950-66 and 1956-67) do produce some evidence of interference. Furthermore, the paper finds one new relationship-a strong inverse connection between instability and the level of investment in developing countries. [ABSTRACT FROM AUTHOR]

SUMMARY The present paper uses 'optimality analysis' in order to evaluate the case for protection. It has been found that the general principles of optimal government intervention remain inviolate both in the 'static' welfare-economics world and in the context of 'growth'. The vast existing literature on the subject has been critically examined in order to drive home to the reader the main message of the present paper: that arguments for using protection as a primary instrument to remove domestic distortion, arising either from external economies, monopoly elements in production or a rural-urban wage differential, or from a differential in the rates of transformation between present and future goods are in effect arguments for providing subsidies on domestic production. Also protection is a wasteful policy in order to promote saving and investment. Instead it is far better to achieve this objective more directly by using appropriate fiscal policies. However, under certain conditions, protection may prove beneficial by attracting foreign investors to set up joint projects in the country. The novelty of the general approach of this paper lies in relating the argument to T inbergen's'targets-and-instruments' approach. More emphasis is given in the paper to the infant-industry argument and the use of tariff to attract foreign capital. This last and the growth-promotion-through-saving argument are the two new topics, not covered in the existing literature, that have been discussed at length in this paper. [ABSTRACT FROM AUTHOR]

SUMMARY This lecture on some problems araising from the international economic relations of developing countries, delivered in a developing country aims at giving a concise compendium of the principal propositions and findings of recent international trade theory. Particular emphasis is lied on the importance of pulling together commercial policy, foreign exchange policy and fiscal policy (internal taxes and subsidies) in a comprehensive scheme which was qualified by H arryH. B ell, Research Director of the UNCTAD, as a 'unified theory of protection'. In fact, the author, who is working in the praxis of international monetary and financial questions but likes personally to make 'excursions' to international trade theory and public finance, felt compelled to break down the artificial compartmentalization between the various sub-disciplines of political economy. A first attempt of this kind necessarily cannot go down into all details and necessarily rests to be completed. On this conceptual background the paper deals with the influence of inflation on development, fixed versus floating rates, tariff arguments, the attempt to construct a scientific tariff, the costs of selfsufficiency, the combined net effective rate of protection, quantitative restrictions and monetary trade biasing, the question whether import restriction or export promotion, invisibles in a unified theory of protection, capital movements and multiple exchange rates, the influence of the taxation system on relative prices and exchanges and last but not least the skeleton of a typical reform program. Admittedly, in praxis there will be as long difficulties concerning the application of the projected scientific system of protection as long as no one seems to have elaborated a satisfying empirical method in which tariffs, exchange rates and fiscal instruments are all expressed in terms of comparable units on a comparable scale. But does this matter? Praxis will follow theory. [ABSTRACT FROM AUTHOR]

SUMMARY It is the purpose of the present paper to replace the traditional theory of industrial stages by a better model based on the criteria of capital and control. In constructing the new model we became aware of the fact it is necessary to distinguish between 'capital'-intensive and 'capital'-extensive industries and again within the latter between those which worked for local consumption and for the export trade, respectively. Only for the 'capital'-extensive industries working for the export trade something like stages in the industrial development can be discovered. In fact, the stage reached in these industries in the eighteenth century brought them organizationally close to the older 'capital'-intensive industries, so that for that period we subsume both under the head of protofactory. The protofactory of the model based on capital and control shows the essential characteristics of the factory, although in reality there were some elements distinguishing the protofactory from the full-fledged factory. In the second section of the paper we describe in detail the organizational features of the protofactory after clearing up the etymological confusion in that ZUSAMMENFASSUNG Der Beitrag zielt darauf ab, die traditionelle Theorie der industriellen Stufen durch ein auf den Kriterien ≪Kapital≫ und ≪KontroIle≫ basierendes, besseres Modell zu ersetzen. Beim Aufbau dieses neuen Modells zeigte sich die Notwendig-keit einer Unterscheidung zwischen kapitahntensiven und kapitalextensiven Industrien, welche letztere wiederum unterteilt werden mussen in solche, die fiir den einheimischen Verbrauch arbeiten, und solche, die fiir den Export produ-zieren. Nur fiir die im Export tatigen kapitalextensiven Industrien lasst sich so etwas wie Stadien der industriellen Entwicklung entdecken. In der Tat brachte das Stadium, welches diese Industrien im 18. Jahrhundert erreicht hatten, sie organisatorisch in enge Verbindung zu den alteren, kapitahntensiven Industrien, so dass fiir jene Periode beide unter dem Oberbegriff'Ur-Fabrik' (protofactory) zusammengefasst werden konnen. Das auf ≪Kapital≫ und ≪K.ontrolle≫ aufge-baute Modell der Urfabrik bringt wesentliche Merkmale der Fabrik zum Aus-druck, obwohl sich in Wirklichkeit die Urfabrik von der fliigge gewordenen Fabrik in einigen Punkten unterschied. Im zweiten Teil der Arbeit werden die organisatorischen Grundziige der Urfabrik im Detail beschrieben; zuvor wird die in diesem Bereich herrschende etymologische Verwirrung geklart. Abschliessend wird gezeigt, dass weder der im organisatorischen Aufbau der Industrie tatige Geschaftsmann noch der zeit-genossische Okonom erfasst hatten, was sich vor ihren Augen abspielte. Es brauchte Jahrzehnte, bis der Industrielle die Notwendigkeit regelmassiger Ab-schreibungen erkannte, und der klassische Okonom lehrte noch lange die inverse Korrelation zwischen Lohn und Profit und die Vcrschiebbarkeit des Kapitals von Industrie zu Industrie, nachdem diese beidenfiir das putting-out system typischen Wesensziige mit dem Erscheinen der Urfabrik verschwunden waren. RÉSUMÉ Cet article a pour but, de remplacer la théorie traditionelle des stades industriels par un modèle meilleur, basé sur les critères de capital et de contrǒ1e. En construisant ce nouveau modèle, nous nous rendons compte de la nécessité, de distinguer entre industries intensives en capital et celles extensives en capital et ces dernieres de nouveau, en celles qui travaillent pour la consommation interne, et celles qui produisent pour l'exportation. C'est uniquement pour les industries extensives en capital produisant pour l'exportation, qu'on peut d^couvrir des soi-disants stades du developpement industriels. En fait, le stade atteint dans ces industries au dix-huitieme siecle les amenait du point de vue de I'organisation en relation étroite avec les industries plus vieilles et intensives en capital, de facon a ce que pour cette periode, les deux pouvaient ětre résumés sous le terme de ≪protofabrique≫. La protofabrique du modele, basee sur le capital et le contrdle met en relief les principales caracteristiques de l'usine, malgre que la protofabrique se distingue en realite en beaucoup de points de l'usine evoluée. Dans la deuxieme partie de cet article, les elements organisateurs de la protofabrique sont decrits en detail, apres avoir eclairci les confusions etymologiques. Finalement l'auteur montre, que ni le commercant actif dans le developpement organisateur de l'industrie, ni l'economiste classique contemporain ont saisi ce qui se deroulait devant leurs yeux. II a fallu des dixaines d'annees jusqu'a ce que I'industriel reconnaisse Futility d'amortisations regulieres, et l'econome classique enseignait encore longtemps la correlation inverse entre le salaire et le profit et Pajustement du capital d'une industrie a l'autre, malgre que ces deux faits typiques par le 'putting-out system', avaient disparu avec l'apparition de la protofabrique. [ABSTRACT FROM AUTHOR]

SUMMARY In recent years there has been a great development of interest in the principles and the problems of rational decision-making and rational action. Economists, mathematicians, statisticians, logicians, engineers, and philosophers have all addressed their efforts to various phases of the general problem of rationality. This paper attempts a provisional synthesis of their basic results so far, in the form of a suggested preliminary definition of rationality that is sufficiently general to be applicable in all circumstances. ZUSAMMENFASSUNG Beitrag zu einer allgemeinen Definition des rationalen Handelns In den letzten Jahren ist ein zunehmendes Interesse an den Grundlagen und den Problemen der rationalen Entschlussfassung und rationalen Handelns festzustellen. Ökonomen, Mathematiker, Statistiker, Logiker, Ingenieure und Philosophen haben ihre Anstrengungen auf verschiedene Phasen des allgemeinen Problems des Rationalen gerichtet. Die vorliegende Studie macht den Versuch einer vorläufigen Synthese der bisherigen grundlegenden Ergebnisse in Form einer vorläufigen Definition des Rationalen, die genügend allgemein ist, um unter jeglichen Bedingungen anwendbar zu sein. RÉSUMÉ Recherche ď une définition générate de ľ ction rationnelle. Durant ces dernières années, ľ intéret s'est fortement accru pour les principes et les problèmes relatifs à la décision rationnelle et àľ action rationnelle. Des économistes, des mathématiciens, des statisticiens, des logiciens, des ingénieurs et des philosophes ont concentrés leurs efforts sur les différentes phases du probléme général de la rationalité. La présente étude constitue un essai de synthèse provisoire des résultats fondamentaux obtenus jusqu'ici, sous la forme ď une définition préliminaire de la rationalité, par ailleurs suffisamment générale pour etre applicable dans toutes les circonstances. The general definition of rationality, to be usable for 'practical' decisionmaking, must take full cognizance of each of the following characteristics of the 'real' world, at least: the time-dimension of action and of the consequences of the action; the multitudinous side-effects of an action; the inevitable uncertainty of the 'actor' in connection with the alternatives of action open to him and the consequences of each of these; the costs of information-gathering; the costs of performing logical operations; the variety of the value-criteria of different actors; the changes in the value-criteria of any given actor over time; and the 'tastes' of the actor in relation to time-preference, risk-taking, logical processes, and the facing of uncertainty. The definition of rationality should specify the course of action which, in the light of all these factors, is the 'best' one. The present suggested definition outlines a 'rational' procedure for choosing one from among the set of all known possible actions, where the word 'action' refers to a particular time-sequence of (a) acting (in the usual sense), (b) information-gathering, and (c) logical analysis. The procedure consists, roughly, of these four steps: (1) the specification of the set of known possible actions; (2) the determination, for each of the actions, and using all available relevant information, of the set of all possible consequences of that action and their respective probabilities; (3) the evaluation, in the light of the relevant value-criteria, of each of the possible consequences of each of the possible actions; and (4) the derivation from (3) of the 'correct' action to be adopted. In carrying out these steps we employ a logical construction patterned after those of Carnap, Hempel and Oppenheim. For the sake of greater understandability, the definition is presented in two stages. The appendix to this paper contains a (grossly oversimplified) illustration of the application of the definition. Die allgemeine Definition des Rationalen - soil sie für praktische Entschlüsse verwendbar sein - muss zumindest folgende Charakteristika der 'realen' Welt voll berücksichtigen: die Zeitdimension einer Handlung und der Konsequenzen der Handlung; die zahlreichen Nebenwirkungen einer Handlung; die unvermeidliche Ungewissheit des Handelnden mit Bezug auf die ihm offenstehenden alternativen Handlungen und auf die Folgen jeder dieser Handlungen; die Kosten zusätzlicher Information; die Kosten des logischen Vorgehens; die Mannigfaltigkeit der Wertkriterien der verschiedenen Handelnden; die Rnderungen in den Wertkriterien eines Handelnden im Zeitverlauf; die Einstellung des Handelnden hinsichtlich Zeitpräferenz, Risikobereitschaft, logische Verfahren und Ungewissheit. Die Definition des Rationalen sollte jenen Ablauf des Handelns aufzeigen, der im Lichte aller dieser Faktoren der 'beste' ist. Die hier vorgeschlagene Definition skizziert ein 'rationales Verfahren für die Wahl einer Handlung unter all den bekannten möglichen Handlungen, wobei das Wort 'Handlung' sich auf eine besondere Zeitfolge von Handeln (im üblichen Sinn), Information und logischer Analyse bezieht. Das Verfahren besteht, grob gesprochen, in folgenden vier Schritten: I. Spezifikation der bekannten möglichen Handlungen; 2. Bestimmung aller möglichen Folgen und der Wahrscheinlichkeit dieser Folgen für jede der Handlungen, unter Verwendung aller verfügbaren relevanten Informationen; 3. Wertbestimmung jeder möglichen Folge von jeder der möglichen Handlungen auf Grund der relevanten Wertkriterien; und 4. Ableitung der 'richtigen' vorzunehmenden Handlung aus 3. Bei der Ausführung dieser Schritte wird eine logische Konstruktion verwendet nach dem Muster von Carnap, Hempel und Oppenheim. Im Interesse einer grössern Verständlichkeit wird die Definition in zwei Stufen entwickelt. Der Anhang enthält eine (stark vereinfachte) Illustration über die Anwendung der Definition. Une définition générale de la rationalité - pour qu'elle soit utilisable pour des decisions pratiques - doit pour le moins tenir pleinement compte de chacune des caractéristiques suivantes du monde 'réel': la durée de ľ action et des conséquences de ľ action; la multitude des effets connexes ď une action; ľ inévitable incertitude de celui qui agit en ce qui concerne les alternatives qui s'offrent à lui et les conséquences de chacune de ces actions; le coǔt des informations complémentaires; le coǔt de ľ exécution logique des opérations; la diversite des criteres-valeur, suivant l'opinion de ceux qui agissent; les modifications dans le temps des critères-valeur ď un exécutant donné; la préférence que marque celui qui agit quant au temps, au risque, à la procédure logique et àľ incertitude. La définition de la rationalité devrait spécifier le déroulement de ľ action, qui, à la lumière de tous ces facteurs, apparaǐt comme 'la meilleure'. La définition proposée ici esquisse une procédure rationnelle pour le choix ď une action parmi toutes les actions reconnues possibles; en ľ occurrence, le mot action se rapporte à une suite chronologique a) ď actions (au sens usuel), b) ď informations et c) ď analyses logiques. Grosso modo, le processus comprend les quatre étapes suivantes: I° la spécification des actions connues possibles; 2° la détermination pour chacune des actions, et en utilisant toutes les informations disponibles entrant en ligne de compte, de toutes les conséquences possibles et de leurs probabilityés respectives; 3oévaluation, à la lumière des critères-valeur entrant en ligne de compte, de chacune des conséquences possibles de chacune des actions possibles; et 4o la déduction de 3o de ľ action 'correcte'à exécuter. En exposant ces étapes, ľ auteur utilise une construction logique calquée sur celles de Carnap, Hempel et Oppenheim. Afin ď etre mieux compréhensible, la définition est présentée en deux paliers. Ľ annexe à cet article contient un exemple (considérablement simplifyé) de ľ application de la définition. [ABSTRACT FROM AUTHOR]

This article paper is concerned with the similarity of the growth performance of the British economy during the nineteen-twenties and nineteen-thirties and with the usefulness of the "new-old" industry dichotomy in illuminating the trends of the inter-war period. The inter-war years emerge as a period of growth almost as rapid as any of comparable length in British measured history. The exact rating of the performance naturally varies slightly with the growth criterion adopted and the termini used for the other periods; the simplest way to establish the validity of the conclusion and at the same time leave it open to the reader's judgment is to draw in the inter-war trends on the Matthews graph. The similarity of the growth performance in the nineteen-twenties and nineteen-thirties is largely maintained even when activity is divided into Goods production and Service production. Services get their unity partly from their physical intangibility as final products, partly from supposed differences in income demand elasticities or productivity improvement possibilities, partly, and increasingly, from the statistical difficulties of arriving at satisfactory real output series.

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

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

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

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

The central concern of this paper is with the treatment of human resources in dynamic applications of capital and growth accounting. Despite many advances, national accounting conventions still give biased profiles of the economy, but the time is ripe for experimentation with measures that can correct those biases and provide a more adequate base for assessment of long-term economic performance and prospects. In the first section, the logic and feasibility of forward and backward measures of formation of human capital in the simplest case (of full-time schooling) is examined in parallel with physical capital. In a dynamic economy, which is rarely if ever in equilibrium, these approaches complement each other; they are poor substitutes. In section two a number of conceptual and measurement issues are considered with particular reference to human-capital investment periods and the treatment of appreciation, depreciation and obsolescence of human versus physical capital. Here special attention is given to the extended periods of investments in human resources, which overlap with realization of returns, and to the processes and agencies through which postschool investments are made. The last section presents a brief statement concerning asymmetries in disequilibrium biases with respect to the formation of human relative to physical capital. Drawing upon section 1 with regard to forward and backward measures and section 2 with regard to the critical importance of postschool learning, new possibilities in contributions of national accounting to a dynamic analysis of economic development are suggested. [ABSTRACT FROM AUTHOR]

Economic development involves elemental processes of great complexity and scope and that those who would move from a traditional to a modern society must relate themselves differently to the environment, shifting from an organic to an inorganic energy base, they must alter their ontology, accepting a different cognitive base for their relief system, they must adopt new values, forsaking old ones or integrating them somehow with the new values, indeed, they must psychologically refashion traditional man and his energizing and motivational system. The encompassing task of development requires the involvement of all sectors of society and different types of social units. This paper examines the nature and position of voluntary associations in the historic process of modernization and development.

The article focuses on a structural perspective towards a sociological theory of development. Perhaps no single word has been more widely and frequently used by such a large number of people in so many countries of the world today than the term "development." The term frequently refers to economic development as it has been a central concern to the majority of nations and citizens living there. The author also describes the reasons why sociology has been a latecomer in this endeavor may be found in the insistence on a value-free or ideologically neutral science of society. The author further says that his paper builds its argument on the following basic premises: 1) development is a value concept; 2) development is a social structural change; 3) the aspect of social structure that is most salient to development is that of resource allocation or the distributive system of society; and 4) the pivotal factor that can either promote or cripple the development process is political leadership. This article also presents a comprehensive study of human values which was previously not existing.

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SUMMARY The fact that high expenditure on armaments impedes economic growth by diverting ressources from investment has been repeatedly stressed. The present paper indicates an additional route by which military expenditure may slow down economic growth. The clue is taken from the 'export-led growth' models (B eckerman, L amfalussy) which claim a correlation between growth of exports and total economic growth. It is then argued that high military expenditure reduces export availabilities in the machinery and transport equipment sector where chances for export expansion have been above average. This brake on the most expansive sector dampens export growth in general. A slow-down in GNP-growth follows from this. A preliminary glance at the statistical picture shows that the above hypothesis should not be completely ruled out. ZUSAMMENFASSUNG Die wachstumshemmende Wirkung hoher Rüstungsausgaben, die durch die Ver-minderung von Resourcen für Investitionszwecke hervorgerufen wird, ist schon oft betont worden. Die vorliegende Arbeit weist auf einen möglichen weiteren Zusammenhang zwischen Höhe der Militärausgaben und Rate des Wirtschafts-wachstums hin. Ausgangspunkt sind die Theorien eines «export-led growth» (B eckerman, L amfalussy), die eine positive Korrelation zwischen Export- und allgemeinem Wirtschaftswachstum postulieren. Es wird dann darauf hingewiesen, dass hohe Militärausgaben das Exportangebot im Sektor der Maschinen und Ver-kehrsmittel beschneiden, der im Welthandel weit rascher expandiert als andere Sektoren. Diese Bremswirkung im expansivsten Sektor zieht eine Verlangsamung des Exportwachstums im allgemeinen nach sich und führt schliesslich zu einer relativ niedrigeren Wachstumsrate des Bruttosozialprodukts. Ein enter Blick ad das vorhandene statistische Material zeigt, dass die obige Hypothese nicht ohne weiteres von der Hand zu weisen ist. RÉSUMÉ Des dépenses importantes pour l'armement empêchent la croissance économique parce qu'elles détournent les ressources nécessaires à l'investissement. Ce fait est largement connu. L'article se tourne vers une autre relation possible entre la hauteur des dépenses militaires et le ralentissement de la croissance économique. Les théories du «export-led growth» (B eckerman, L amfalussy) servent de point de repère: elles stipulent une corrélation positive entre la croissance économique en général et celle des exportations. L'auteur démontre par la suite que les dépenses militaires élevées réduisent les possibilités d'exportations dans la secteurs des machines et des moyens de transport. On sait que partout l'expansion de ces deux secteurs at bien au-dessus de la moyenne. Pour cette raison un freinage touchant ces deux secteun particulièrement expands ralentira la croissance des exporta-tions en général et aboutira par la suite à un tau d'accroissement moins élevé du produit national brut. Un regard préliminaire Bur le matériel statistique affirme que l'hypothèse developpée par l'auteur ne devrait être exclue. [ABSTRACT FROM AUTHOR]

The article is a reply by the author to his critics Leonard G. Bowe and Bryan L. Boulier on his article "Economic Development, Modernization and Economic Behavior." The author states that, both critics object to the choice of indicators for the measurement of economic well being and modernization. The concept of economic development has increasingly come under question as "the factor" of change necessary to bring about changes in the levels of demographic behavior among populations. The use of gross national producer as an indicator of modernization was prompted by the fact that it was a good measure of the productive capacity of the systems. The second problem discussed by each of the critics is that of multicollinearity. It reflects the level of economic well being, independent of the structural complexity of society, and also reflects the general level of structural complexity independent of the economic dimension. There is no clear distinction between medical and nonmedical inputs, and between the latter and other factors.

This paper arises out of my practical concern for 3½ years with the industrial work of the National Economic Development Office, and in particular the establishment of some 20† Economic Development Committees, a number that is likely soon to rise to 25. These immediate concerns are, however, supported by 17 years previous experience in handling aspects of the relationship between industry and Government. I have therefore a special interest in the opportunities these committees may create for Government to improve its general relations with industry and, no less important, for industry to ensure that Government is more continuously and effectively informed of industrial needs and conditions. I shall describe how these committees came into existence and outline their formal composition and structure. This will lead to consideration of their functions, potentialities, and limitations. As for their potentialities, I shall allow myself to speculate on whether we have somewhat unwittingly stumbled on a method of providing a missing link in our industrial economic structure. [ABSTRACT FROM AUTHOR]

The article examines efficient accumulation paths in the closed production model. There are already a number of papers examining the behavior of "efficient" accumulation paths of finite or infinite duration. They have proved that, under certain conditions, efficient paths tend to move toward near a von Neumann path for most their duration. The corresponding theorems have been called "turnpike theorems" from the turnpike function of the von Neumann path. The author considered an economy with decentralized production in this paper. Proofs are given whenever either the corresponding results are new or the proofs themselves differ substantially from the original ones.

Paul Samuelson [5] [6] and Peter Diamond [2] have developed growth models in which the attempt by each economic unit to maximize its utility does not lead to a social optimum. It would be possible for all generations to consume more per capita, if economic growth were directed by an omniscient social planner. Their models are free from the usual sources of inefficiency encountered in price theory. They explicitly assume perfect competition, perfect foresight and no external economies or diseconomies. The purpose of this paper is to introduce government institutions which may have little foresight, which will not engage in central planning or use direct controls but whose existence will guarantee that the equilibrium solution will be optimal. I am interested in determining the minimal amount of government which is sufficient to produce long-run optimality.
Diamond's long-run ratio of capital to labor k (in Figure 1) could yield an interest rate above or below the growth rate. Capital at time t+1 is equal to current savings of workers which depend upon the current wage W[k(t)]. This wage was determined by the savings of the previous generation of workers and the size of the current labor force. No saver has an influence on his wage, which determines the present value of his consumption, since he has no effect upon the current stock of capital. His saving decision affects both his retirement income and the next generation's stock of capital. Only the retirement income, however, concerns him. He has no interest in the real wage of the next generation of workers. If he values current consumption highly, he will 1 r=(1+n)/(1-)(1-) in his model [2].
save little and the resulting interest rate next period will be "high". On the other hand, if he values future consumption highly, he will save a lot and the resulting interest rate will be "low" in the next period. There is no reason why the equilibrium interest rate should equal the... [ABSTRACT FROM AUTHOR]

Since E.S. Phelps published [7] his paper on "The New View of Investments" there have been discussions on the long-run implications of the embodiment hypothesis of technical progress. The authors of [1], [2], [3] and [6] discussed whether the sensitivity of output to savings is higher where technical progress is embodied than where it is disembodied. D. Levhari and E. Sheshinski [4] studied the relation between the rate of return and the rate of embodied technical progress and subsequently [5] examined the effect of embodied technical progress on the factor price frontier. The purpose of this paper is further to explore the long-run implications of the embodiment hypothesis and to show that the short-run behavior of an economy with embodied technical progress also differs from that of an economy with disembodied technical progress. Following Phelps [7] and others, we consider the putty-putty case where factor substitution is possible both ex ante and ex post. In Section II the complete model will be described, and a parameter, α, will be introduced to indicate the fraction of technical progress which is embodied. Section III concerns the long-run effects of the embodied technical progress, while Section IV discusses its short-run implications. [ABSTRACT FROM AUTHOR]

This little essay contains reflections provoked by another: Professor Joan Robinson's "Pre-Keynesian Theory after Keynes", published in the 1964 issue of Australian Economic Papers (Vol. III). To judge from her last section (briskly headed "So What?"), her aim is to deride the usefulness of the "Pre-Keynesian" growth models, some conclusions of which she summarises in her preceding pages with gay expressions of contempt. There is much in this body of theory, both of matter and of manner, that I too dislike. Nevertheless, I am out of sympathy with the particular objections to it that she feels and equally so with any large claims for the kinds of "Keynesian" theory she, by implication, approves. Hence I am tempted into some general remarks about the varieties and the usefulness of growth theory. If in making them I too adopt a controversial tone, I hope that readers wilt recognize that I, like Mrs. Robinson, have a constructive intent. This little essay contains reflections provoked by another: Professor Joan Robinson's "Pre-Keynesian Theory after Keynes", published in the 1964 issue of Australian Economic Papers (Vol. III). To judge from her last section (briskly headed "So What?"), her aim is to deride the usefulness of the "Pre-Keynesian" growth models, some conclusions of which she summarises in her preceding pages with gay expressions of contempt. There is much in this body of theory, both of matter and of manner, that I too dislike. Nevertheless, I am out of sympathy with the particular objections to it that she feels and equally so with any large claims for the kinds of "Keynesian" theory she, by implication, approves. Hence I am tempted into some general remarks about the varieties and the usefulness of growth theory. If in making them I too adopt a controversial tone, I hope that readers wilt recognize that I, like Mrs. Robinson, have a constructive intent. [ABSTRACT FROM AUTHOR]

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

The main objective of this paper is to explore and quantify the difference between two measures of comparative economic welfare: (a) the more or less conventional measure of per capita national income, and (b) the capitalized value of expected future income per capita. The paper begins with a brief summary of the argument in favor of the present value of expected future income per capita as a measure of economic welfare. This is followed by an examination of the empirical relationship of the ratio of the suggested alternative measure to per capita income and an analysis of the variables used to compute the present value of expected income per capita. The main conclusion drawn from the calculations is that very substantial differences occur in the measurement of relative economic well-being depending on which measure is used. A final section discusses the implications of this finding for international comparisons of economic welfare. [ABSTRACT FROM AUTHOR]

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

The interrelation between changes in the economic structure, i.e., industrial distribution of income and labor force, and the size distribution of income is studied in this paper in a case study of India (1961–1960). The change in the size distribution of income is the sum of changes due to (1) inter-sectoral factors and (2) intra-sectoral factors. The need for this distinction is emphasized by the result obtained for India, that 85% of the changes in the size distribution may he assigned to inter-sectoral factors, and only 16% to intrasectoral factors. Since the inter-sectoral factors are significantly influenced by changes in the industrial distribution of income and labor force, our result points out a relation between economic growth and the size distribution which quite often is overlooked in studies of the size distribution. The results obtained in this paper support several cross-section results of Professor Kuznets. In particular some of these are: (a) inter-sectoral inequality in the economic structure widened with economic growth, (b) the inequality in the size distribution of India widened, (c) the level of inequality in India is higher than in any of the eight developed countries considered. [ABSTRACT FROM AUTHOR]