bluuebunny/crossref_metadata_2025 huggingface dataset:
Dynamic Econometrics
Authors: Hendry David F.
Published: October 2003

This systematic and integrated framework for econometric modelling is organized in terms of three levels of knowledge: probability, estimation, and modelling. All necessary concepts of econometrics (including exogeneity and encompassing), models, processes, estimators, and inference procedures (centred on maximum likelihood) are discussed with solved examples and exercises. Practical problems in empirical modelling, such as model discovery, evaluation, and data mining are addressed, and illustrated using the software system PcGive. Background analyses cover matrix algebra, probability theory, multiple regression, stationary and non‐stationary stochastic processes, asymptotic distribution theory, Monte Carlo methods, numerical optimization, and macro‐econometric models. The reader will master the theory and practice of modelling non‐stationary (cointegrated) economic time series, based on a rigorous theory of reduction.
Introduction
Authors: Hendry David F.
Published: October 2003

Econometric modelling of economic time series requires discovering sustainable and interpretable relationships between observed economic variables. Critical and constructive aspects are distinguished, and the roles of theories, instruments, and evidence discussed. A simple statistical mechanism, which could generate data with many of the salient features of observed time series, is analysed. An inconsistency between that and models fitted to the observed data, highlights the ease of critical evaluation, as against the difficulty of constructive progress. The concept of an empirical model is introduced.
Interpreting Linear Models
Authors: Hendry David F.
Published: October 2003

Regression, linear least‐squares approximation, contingent plan, and behavioural model are distinguished as four interpretations that ‘look alike’ yet have different properties. Models of expectations formation are analysed including rational, consistent, unbiased, and economically rational expectations, the last highlighting the instrumental role of expectations in achieving plans.
A Typology of Linear Dynamic Equations
Authors: Hendry David F.
Published: October 2003

Nine special cases of the autoregressive‐distributed lag model are analysed focusing on important econometric problems, namely: simple‐to‐general modelling; the ‘time‐series vs. econometrics’ debate; potential theory inconsistency; non‐autonomy; the role of expectations; autocorrelation corrections; multicollinearity; and equilibrium correction and cointegration. Monte Carlo and empirical studies illustrate each case. The analysis reveals that empirical results depend on the choice of model type.
Likelihood
Authors: Hendry David F.
Published: October 2003

The likelihood function is the obverse of the data‐density function, and summaries thereof lead to maximum likelihood estimation. The first derivative of the log‐likelihood, the score, plays a central role in estimation and inference. Its properties are described, as are those of maximum likelihood estimation. Misleading inferences due to incorrect variance estimation, and possible solutions, are investigated. Derived distributions, asymptotic equivalencies of other methods to maximum likelihood, the concentrated (or profile) likelihood function, and marginal and conditional distributions are discussed, leading to the concept of an estimator generating equation.
Measurement Problems in Econometrics
Authors: Hendry David F.
Published: October 2003

Methods for estimating parameters in errors‐in‐variables models are investigated, and an estimator generating equation is derived, with weighted least squares and instrumental variables as solutions. A Monte Carlo simulation technique for evaluating likelihood functions of dynamic latent‐variables models, based on artificial factorizations of the sequential joint density of the observables and latent variables is described, and applied to a dynamic min‐condition model. The effects of measurement errors and data revisions in integrated processes and equilibrium‐correction models are investigated.
Encompassing
Authors: Hendry David F.
Published: October 2003

Encompassing seeks to resolve the proliferation of rival models for the same data set by requiring any given model to account for the results obtained by other models, whether nested or non‐nested. Encompassing is reflexive and anti‐symmetric, but not transitive, whereas parsimonious encompassing (a small model explaining a larger model within which it is embedded) is transitive and invariant under isomorphic re‐specification. The Lucas critique for feedback against expectational models is analysed in terms of encompassing and super exogeneity, making such claims refutable as well as confirmable.
Econometrics in Action
Authors: Hendry David F.
Published: October 2003

The methods, approaches, and principles are applied to modelling the transactions demand for money in the UK over 1963–89. Financial innovations affect the opportunity cost of holding money, captured in a learning‐adjusted interest‐rate differential. The data are described by graphs to highlight the main features requiring modelling. A system is examined for cointegration, and potential long‐run weak exogeneity. A small monetary model is formulated, which sustains a single‐equation analysis of transactions demand. Recommencing from a general linear autoregressive‐distributed lag representation, a simplified congruent equation is developed.
The Behaviour of Interest Rates: The Theoretical Background
Authors: Dow J. C. R. , Saville I. D.
Published: October 2003

A theoretical discussion on central‐bank effects on interest rates forms the substance of this chapter. It focuses on the actions that effect interest rates in the short term. This is at odds with much of the theoretical literature on this subject that opts for a more long‐term approach. It discusses equilibrium models of interest rates and presents two sections discussing both classical and multiplier adjustments, and the effects of long‐term future expectations on rates in the short term.
Central Bank Rate as an Instrument of Monetary Control
Authors: Dow J. C. R. , Saville I. D.
Published: October 2003

The use of bank rates acting as a source of control is the focus of this chapter. It examines the imposition of the Minimum Lending Rate in 1972. The role of the central bank in setting rates and their ability to force up rates is examined. There is a discussion on the role of central bank reserves. The limitations of central bank's powers are also studied. The chapter concludes with an analysis of monetary aggregates.
Monetary Base Control
Authors: Dow J. C. R. , Saville I. D.
Published: October 2003

A discussion on monetary base control forms the context of this chapter. It begins by defining what is known as the wide monetary base. It covers the debates over monetary base control by examining ideas presented in the 1980 Green Paper and writings by Friedman. It then goes on to discuss the effects of monetary control in relation to central banks and narrow money. It concludes with an assessment of the usefulness of monetary base control as an easy way to control monetary growth.
The Corset, Funding Policy and Banking Supervision
Authors: Dow J. C. R. , Saville I. D.
Published: October 2003

This chapter is divided into three different sections. It analyses forms of control that are not part of the ‘classical’ tradition of the previous chapter. The first section examines the idea of the resource and lending management system known as the ‘corset’. It studies the effects of the corset and reasons why it fell into disrepute. The chapter then moves on to examine the problem of over‐funding and the role of government, banks, and the public in bringing this about. The final section is an analysis of banking supervision to prevent serious bank failures.
The Limitations to the Role of Monetary Policy
Authors: Dow J. C. R. , Saville I. D.
Published: October 2003

Focuses on the limitations encountered by the monetary authorities when trying to control the economy. The argument builds on the previous chapters to show the problems with fiscal instruments such as the corset, the ineffectiveness of monetary base control, and a discussion on equilibrium analysis. It also examines limitations of the use of interest rates and the authority's control over exchange rates. The authors finish by offering some brief conclusions about monetary policy since the mid‐1970s.
Rational Ethics
Authors: Fitzgibbons Athol
Published: October 2003

Describes how Keynes derived his ethics from the philosophy of G. E. Moore, explains his attacks on utilitarianism, and relates Keynes's ethics to his theory of probability.
The Logic of Politics
Authors: Fitzgibbons Athol
Published: October 2003

Explains how Keynes derived the ‘third way’ from the political philosophy of Edmund Burke, examines how Keynes based his political philosophy on ethics, and considers the implications for liberalism.
The Meaning of Uncertainty
Authors: Fitzgibbons Athol
Published: October 2003

Examines the meaning of uncertainty in the General Theory and elsewhere, and compares the theory of uncertainty with the theory of probability in the Treatise on Probability.
Other Accounts of Keynesian Ethics and Uncertainty
Authors: Fitzgibbons Athol
Published: October 2003

Corrects some prominent misunderstandings concerning Keynes's theory of uncertainty.
Economics of Transitoriness
Authors: Fitzgibbons Athol
Published: October 2003

Considers the relevance of Keynes's moral and political philosophy for his economic theories, and shows that he had a non‐mechanistic system in mind.
The Vision Translated
Authors: Fitzgibbons Athol
Published: October 2003

Considers the differences between Keynes's economic theories and the Keynesian economics that evolved in the second half of the twentieth century. The difference is between a non‐mechanistic system (Keynes) and a mechanistic one.
The Political Ideals
Authors: Fitzgibbons Athol
Published: October 2003

Keynes's views concerning capital, liberalism, and democracy are analysed in Ch. 9, which draws on the study of his political philosophy in Ch. 4.
Chaotic Economic Dynamics
Authors: Goodwin Richard M.
Published: October 2003

This collection of short essays provides an application of chaotic dynamics to economic systems. Each chapter presents several economic models incorporating differential (or difference) equations such as the Rössler equations, which exhibit a chaotic attractor. Combining the insights of Schumpeter, Marx, and Keynes, the models endogenously generate irregular, wavelike growth. Goodwin therefore argues that the apparent unpredictability of economic systems is due to deterministic chaos as much as to exogeneous shocks. The book is aimed primarily at economists interested in theories of economic growth. However, readers with a general interest in the application of chaos theory to social sciences will also find it useful. Some mathematical knowledge of systems of differential equations is assumed.
The Structural and Dynamical Instability of the Modern Economy
Authors: Goodwin Richard M.
Published: October 2003

Addresses a weakness in Schumpeterian thought: innovation need not lead to higher output. An innovation has two opposing effects: it increases investment, thereby increasing labour demand; it also raises productivity, thereby reducing labour demand. A model is developed with three dynamic elements: quadratic investment outlay, dynamic Kahn–Keynes multiplication of output, and a specification for the rate of real wage increase. The model shows that if the real wage is sufficiently responsive, innovation can increase output permanently. The chapter concludes with a Rössler model designed to model short and long waves as a chaotic growth‐oscillator.
An Analysis of High and Low Growth Rates
Authors: Goodwin Richard M.
Published: October 2003

Considers aspects of high, medium, and low growth, seeking to explain differences in cross‐country growth. The model from the previous chapter is employed as a base but the innovation rate is now exogenous. Output growth is decomposed into innovative capacity growth and population growth. The economy does not approach the steady state path smoothly but fluctuates around it. The growth rate of output in the model is determined by the share of innovational investment. The Rössler model is used to treat endogenous fluctuations. The chapter concludes by noting that with zero output growth, working hours could fall at the rate of productivity growth.
Irregular Waves of Growth from Structural Innovation
Authors: Goodwin Richard M.
Published: October 2003

Seeks to fuse the insights of Schumpeter and Keynes with the argument that market conditions force unrelated innovatory investment decisions to march in step. Aggregate demand matters, therefore, and the Kahn–Keynes multiplication of expansive and contractive demand provides the missing link. A model is developed in which a control variable stabilizes the system globally while allowing erratic motion locally. The model is extended so that for a 50‐year logistic with plausible parameters, higher output after each wave is guaranteed without assuming full employment. The model is extended to account for the influence of demand on investment.
Dynamical Control of Economic Waves by Fiscal Policy
Authors: Goodwin Richard M.
Published: October 2003

The control variable in the previous chapter is interpreted here as public net income‐generating expenditure. In the absence of compensatory policy, the model of the previous chapter results in a highly irregular time series and maximum unemployment of 12%. In contrast, almost perfect smoothing is possible by large and rapid intervention, based upon derivative control, at the early stages of the fluctuation. The addition of proportional control can ensure that equilibrium unemployment falls gradually to an appropriately low level. Problems of implementation are discussed.
A Fresh Look at Traditional Cycle Models
Authors: Goodwin Richard M.
Published: October 2003

Takes a new look, in the light of advances in chaotic dynamics, at the archetypal cycle models by Hansen–Samuelson and Lundberg–Metzler. The Metzler model, which produces simple harmonic motion, is expanded to allow for non‐linearities. By locating the model within the Rössler band, aperiodic cycles of approximately three years can result. Similarly, a single non‐linearity, as in Rössler, is added to the Hansen–Samuelson model.
Chaotic, Aperiodic Behaviour from Forced Oscillators
Authors: Goodwin Richard M.
Published: October 2003

An overview of the mathematics of forced oscillators, particularly the van der Pol model is presented. Following this, Goodwin argues that such models are relevant to economics given that each part of the economy is subject to exogenous forces, from movements of world markets to the solar cycle. An exogenous cycle is imposed upon a Rössler model. This alters the phase portrait and corresponding time series. A significant increase in chaotic behaviour can result.
Hunger and Public Action
Authors: Drèze Jean , Sen Amartya
Published: October 2003

This book analyses the role of public action in solving the problem of hunger in the modern world. The study is divided into four parts. The first, making extensive use of the concepts of entitlements and capabilities explores the interaction of nutritional, economic, social, and political elements and their influence on hunger and deprivation. The problem of famine prevention is the main focus of the second part, with special attention given to Africa and India. The third part is devoted to the issue of fighting chronic undernourishment and the lessons to be learnt from the policies of China, India, and some other countries. The last part draws together the main themes and concerns of the earlier chapters, and provides an integrated view of the role of public action in eliminating hunger. The study suggests that there is indeed some space for public action in solving the problem of hunger and deprivation. In the case of famine prevention, social security could provide early warning systems and employment provision plans. To fight endemic deprivation, the authors suggest, among other things, that basic health care, elementary education, and food programmes should be looked at.
Entitlement and Deprivation
Authors: Drèze Jean , Sen Amartya
Published: October 2003

The link between deprivation and the law is explored, and it is noted that, in seeking social changes to eliminate hunger, the nature of the entitlement systems has to be properly understood. Recognising that food availability is of crucial importance, the authors suggest attention is moved towards entitlement failures, Finally, case studies of the Bangladesh famine of 1974 and the food crisis in Sub‐Saharan Africa are used to illustrate this.
Famines, Markets and Intervention
Authors: Drèze Jean , Sen Amartya
Published: October 2003

Some of the deficiencies of direct delivery strategies as a means of preventing famines are noted before the part that markets can play in precipitating or relieving famine is explored. The relationship of food availability and prices to individual entitlements is studied. The argument then moves to the role of transactions, both interregional (private trade) and intertemporal (hoarding), on famine vulnerability and how the government could intervene in each case. The last part discusses the merits and limitations of cash support, and recommends its greater use.
Strategies of Entitlement Protection
Authors: Drèze Jean , Sen Amartya
Published: October 2003

This chapter studies how the simultaneous (and often conflicting) objectives of non‐exclusion and targeting can be pursued with varying emphasis, depending on the selection procedure adopted. It then explores some of the selection mechanisms, highlighting the limits of nutritional status as a basic selection criterion. The merits and demerits of employment provision as an entitlement protection system are analysed. Finally, there are some general remarks on effective famine prevention, emphasising the role of mixed systems.
Economic Growth and Public Support
Authors: Drèze Jean , Sen Amartya
Published: October 2003

Possible dissonance between income and achievements of quality of life is noted. Then two alternatives for removing precarious living conditions are explored: growth‐mediated security and support‐led security, with illustrations from the experiences of various countries. The connection between these alternatives is studied. The strategy of growth‐mediated security is distinguished from that of aimless opulence with examples from the experiences of Kuwait and South Korea. The last part is dedicated to the effectiveness of support‐led security strategies.
The Economy, the State and the Public
Authors: Drèze Jean , Sen Amartya
Published: October 2003

Many of the arguments of the book are summarized, with a special emphasis on the role of public action (in a broad sense) to alleviate hunger. Early warning systems and employment provision plans are mentioned for famine prevention. The authors suggest endemic deprivation can be eliminated by looking at basic health care and elementary education in addition to food provision. The last part draws on the influence of food price fluctuations and international cooperation and conflict for public action.
From Marx to the Market
Authors: Brus Wlodzimierz , Laski Kazimierz
Published: October 2003

The book was completed in the autumn of 1988 and published in hardback almost a year later, but the momentous events of 1989 seem not have overtaken the validity of the argument presented here. The book examines—theoretically and in the light of empirical evidence—the roots of the failure of the Marx‐inspired economic system of socialism, and hence the reasons behind the search of market‐oriented remedies. The twists and bends of this difficult search have led to what in the book is termed ‘market socialism proper’ (MS) as the last station of the ultimately futile reformist road. ‘Real socialism’ has proved non‐reformable, and even MS would hardly match the advantages of the private market economy. This conclusion argued in the book does not justify, however, the laissez‐faire tendency to abandon a number of basic values associated with socialism: major concern for full employment, social care, which in turn imply preservation of a place of substance to state macroeconomic policy, equality of opportunity based on redistribution of income and wealth etc. reflecting the concept of an overall interest of society which cannot just be reduced to a sum of individual self‐interests.
The Claim to Economic Rationality
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

The chapter concentrates on presenting the Marxist claim that socialism surpasses its predecessor—capitalism—in terms of economic rationality. The basis for this rationality is to be provided by social ownership of means of production. This is supposed to allow ‘internalisation of externalities’ by means of central planning—ex ante coordination of economic activity on a macro scale, as well as gearing production to satisfaction of needs, which in turn promotes cooperative behaviour of economic agents instead of competition for profits.
The Historical Regularity in Reverse
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

The term ‘Real Socialism’ is used here as a value‐free designation of the area in the past (or at present as in China) under communist rule. The chapter shows the fallacy of one of the fundamental tenets of Marxist model of a socialist/communist economy as a product of the historical regularity of development. Contrary to this assumption ‘real socialism’ has not come about as an heir to developed capitalism, or even as substitute for missed industrial revolution. In practice, the likelihood of installing the system of ‘real socialism’ went in parallel to the higher degree of backwardness.
The Command System
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

The economic system of ‘real socialism’ grew out of the discrepancy between the expected socialist attitudes of the population and the reality of dominating self‐interest. In the absence of properly operating network of material incentives, the implementation of Soviet‐type development strategy had thus to rely on coercion, with the command system as its economic component. Selective development was to be achieved by physical allocation of resources to chosen users, while output maximization was pursued through obligatory plan targets. With the enormous and steadily growing number of items, the detailed plans must have become inconsistent, while still remaining formally obligatory. The ‘minimax’ strategy peculiar to the command system was to find ways to minimize plan targets and simultaneously maximize the planned allocation of resources. As a result, the command system could for a while serve the goal of Soviet‐type modernization, but at the same time became responsible for its inbred conservatism.
The Theoretical Response to Challenge
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

The idea of market‐less economic system of socialism began to be challenged already at the end of XIX century, but an all‐out attack on the concept came in the 1920s, associated with works of Austrian economists Ludwig von Mises and Friedrich von Hayek. This prompted a number of socialist economists to attempt to show the possibility of a rational economic system under dominant nationalization of means of production by using a notional market mechanism; the best known of such attempts is the one developed by the Polish economist Oskar Lange (1936/7). This chapter presents Lange's model of market socialism along with discussion of criticism fromtwo sides: on the one hand as lacking the genuine driving forces of competition, motivation, and information, on the other hand as incompatible with socialist objectives of full employment, elimination of fluctuations and equitable income distribution.
Central Planning With Regulated Market—The Flawed Model
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

The failure of the string of reforms in Soviet‐bloc countries can be attributed to a number of factors, in the first place to resistance of communist political elites eager to preserve their monopolistic power. This however should not overshadow the significance of the flaws in the economic reform model as such, which in particular limited any application of market mechanism to product market alone, banning capital market (and led to preservation of a strong centre of economic control, substantially restricted competition, and in sum made impossible the replacement of the soft budget constraint for enterprises by a hard one).
The Yugoslav Lessons
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

Yugoslavia's ‘labour managed market economy’ underwent changes throughout the period of its existence until the end of the 1980s. On the whole, the changes went in the direction of strengthening the market component of the economic system. However, two groups of issues prevented the reforms reaching the necessary degree of consistency: (1) the weak interaction between the dominant ‘social sector’ and the private sector hampered by numerous restrictions, and (2) the adverse economic effects of the ideological taboos of self‐management which in the opinion of many analysts led to an equilibrium position with lower output, lower employment, and higher capital intensity than a capitalist enterprise operating under analogous market parameters.
The Question of Ownership
Authors: Brus Włodzimierz , Laski Kazimierz
Published: October 2003

This chapter attempts to answer the fundamental question whether consistent market socialism is compatible with the dominant position of public (state) ownership of the means of production. The simple answer is straightforward: if consistent market socialism (MS) requires full independence of enterprises—it is incompatible with state ownership or any other external type of ownership. But is there a possibility of sharing ownership rights? The discussion of this question is presented in considerable detail in the chapter with the conclusion that the requirement may not be of absolute renunciation of public ownership but certainly that of renunciation of any form of ownership doctrinairism. In this sense, the economic system becomes open‐ended.
Industrialism
Authors: Hicks John
Published: October 2003

This chapter explores the meaning of industrialism. It considers some of the consequences which follow when industrialism is defined as ‘science-based technical progress embodied in physical equipment’. It discusses industrialism in relation to science-based technology, economies of scale, land, and labour.
Hawtrey
Authors: Hicks John
Published: October 2003

This chapter discusses some aspects of the revolution in monetary theory of the twenties and thirties — the revolution which, in most people's minds, is exclusively associated with the name of Keynes. However, Hawtrey's Currency and Credit which was published in 1919, was very influential; thus it antedates every one of the ‘new’ monetary writings of Keynes.
About Choice
Authors: Afriat S. N.
Published: October 2003

The chapter is concerned with the generalities of choice and the optimum. Its eight sections are: forming a choice; demand as choice; choice functions; the optimum; optimal choice functions; revealed choice and preference; dinners and battles (these are used to represent the regularity of consumption versus the fitfulfulness of other historical events, in order to introduce consumer theory and discuss its characteristics); and the maximum doctrine.
Processes of Choice
Authors: Afriat S. N.
Published: October 2003

This chapter deals with choice functions and preferences, and with the search and elimination processes involved in making a choice. Its five sections are: search and elimination; binary choice; preference; revealed preference; and revealed contradictions.
Democratic Choice
Authors: Afriat S. N.
Published: October 2003

The chapter discusses group choice. It is seen that, with group choice determined as a function of individual choices, democratically required neutralities inevitably lead to the ordinary voting method. An appraisal of the so‐called voting paradox follows. The remainder of the chapter concerns the group preference theory originated by K. J. Arrow; in addition to an account of principles involved and certain theorems, there is criticism of the ‘welfare’ association of this theory, and some consideration of what it could legitimately be about in the first place. The nine sections of the chapter are: axiomatics of voting—group autonomy, individual anonymity, anonymity of alternatives, the voting principle, unanimity sovereignty, election principle, majority rule; binary elections; the voting paradox; electing an order; democratic impartiality; (Arrow's) irrelevance principle; Hansson's group indifference theorem (which is that impartiality, unanimity, and irrelevance principles imply total group indifference, whereas Afriat concludes that impartiality, unanimity and positive association principles are together impossible); positive association; and Arrow's group dictatorship theorem.
Budget Allocation and Priority
Authors: Afriat S. N.
Published: October 2003

This chapter comments on conventional consumer theory looked at from the point of view of a simple consumer who does not understand enough of partial differential equations to implement the usual Allocation Rule. Its six sections are: the Allocation Rule; marginal utility of money; many goods; priority (of goods); law of (diminishing) returns; and adjustment and (purchase) priority rules.
Ramsey's Savings Rule
Authors: Afriat S. N.
Published: October 2003

This final chapter of Part I of the book (on choice and the optimum) is a study of the optimal savings theory (the Savings Rule) of Frank Ramsey (1928)—what it represents and the arguments involved. Its nine sections are: counting and discounting; income disposition; Ramsey's problem; the Savings Rule; Keynes's argument (for the Savings Rule); Ramsey's argument (for the Savings Rule); time paths; a special case (of a production function as applied to savings); and discounted future (utility).
Algebra of Revealed Preference
Authors: Afriat S. N.
Published: October 2003

This is the second of six chapters in Part II about demand and utility cost, a typical area for what is understood as choice theory. It discusses the algebra of revealed preference. Its seven sections are: demand and utility; consistency conditions; order logic; revealed preference revealed; finite Houthakker test (for revealed preference); constructive solution (a demonstration of how the multiplier‐level solution provides an immediate construction of utility functions that fit the data in the required fashion); and multipliers and levels (as applied to utility functions).
Combinatorics of Demand
Authors: Afriat S. N.
Published: October 2003

This is the third of six chapters in Part II about demand and utility cost, a typical area for what is understood as choice theory. It discusses the combinatorics of demand. Its six sections are: general consistency (of the normal demand); cross‐costs (of demand); classical consistency (of demands); multiplier‐level solutions (to demand); utility cost; and classical limits (with reference to classical utilities belonging to multiplier‐level classes of compatible utilities).
Wald's ‘New Formula’
Authors: Afriat S. N.
Published: October 2003

This is the last of five chapters about the cost of living problem and price indices, a typical area for what is understood as choice theory. Together with the previous two chapters, it discusses theoretical matters arising from the finding of S. S. Byushgens (1925) that Irving Fisher's ‘Ideal Index’ is exact if demand is governed by a homogeneous quadratic utility. Specifically, it addresses the A. Wald's ‘New Formula’. The four sections of the chapter are: linear expansions; revealed purchasing power; yhe critical points; and marginal price indices and limits.
Opportunity Models
Authors: Afriat S. N.
Published: October 2003

This is the first of six chapters on the logic of price. Choice presupposes opportunity, and this chapter gives some account of that side of economic models. The four sections of the chapter are: the production function; general input–output; von Neumann's activity system; and axiomatics of Koopmans's (activity) system. Von Neumann's activity system is further discussed in the last chapter of Part IV (IV.6) as von Neumann's economic model.
General Economic Equilibrium
Authors: Afriat S. N.
Published: October 2003

This is the fifth of six chapters on the logic of price. It is concerned with the proper microeconomic theory of general equilibrium understood as serving questions raised by Frederic Bastiat (1801–50) and illuminating Adam Smith's Invisible Hand, and going beyond basic theory of prices and the market. The eight sections of the chapter are: Crusoe's development; Edgeworth's box; three senses of equilibrium (centralized equilibrium, decentralized equilibrium, exchange equilibrium); feasible prices; a Cobb–Douglas world; the hyperbox; production and profit; and lessons in Edgeworth's box.
Calculus of Propositions
Authors: Afriat S. N.
Published: October 2003

This is the first of three chapters on general mathematics as applied to economics, and presents a treatment of the calculus of propositions. The seven sections of the chapter are: the Boolean laws; normal forms; the conditional; tautologies; existential and universal quantifiers; predicates and sets; and Shao Yung's Program.
Algebra of Relations
Authors: Afriat S. N.
Published: October 2003

This is the second of three chapters on general mathematics as applied to economics, and presents a treatment of the algebra of relations. Relations are defined as subsets of a Cartesian product, or predicates involving several objects, so that Boolean theory (as described in the last chapter) applies to them. The five sections of the chapter are: operations with [binary] relations; classification of (binary) relations; order and equivalence; order refinement; and representation theorems.
Intersections and Fixed Points
Authors: Afriat S. N.
Published: October 2003

This is the last of three chapters on general mathematics as applied to economics, and presents a treatment of intersections and fixed points. The eight sections of the chapter are: simplices and dissections; Sperner's lemma; the KKM lemma; Brouwer's fixed point theorem; the theorems of Kakutani and von Neumann; the Nash equilibrium; saddle points; and BASIC games.
Domesday Economy
Authors: McDonald John , Snooks G. D.
Published: October 2003

The authors apply modern theoretical and statistical methods to the unique data source of Domesday Book (1086) to analyse the system of manorial production and the nature of the national tax system known as danegeld in eleventh‐century England. Domesday Book includes detailed information on land ‘ownership’, income, resources, and fiscal responsibility for almost every manor in 1086 and, in some cases, in 1066. As no other document of any period or country can match either its detail or comprehensiveness, William the Conqueror's survey provides a rich database for modern economists. By using methods not previously applied to this period, the authors provide a new interpretation of the Anglo‐Norman economy—the first since the work of J. H. Round and F. W. Maitland a century earlier. This classic study has been responsible for stimulating the interest of, and further research by, quantitative economic historians in the medieval period.
Domesday Book Re‐Examined
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Domesday Book re‐examined’ introduces the reader to the nature of Domesday Book (DB), the traditional interpretation of DB, and the historical background to the Conqueror's great survey of 1086, together with the aims and methods of our enquiry. While DB is the greatest data source for any pre‐modern society, its economic and fiscal relationships have been misinterpreted by conventional wisdom.
The Economy and Survey of 1086
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘The economy and survey of 1086’ establishes the foundation for the book's enquiry. The main economic institutions surveyed include the manor, the borough, internal trade, international trade, and the state. Next, the purpose, methods, and data accuracy of the Domesday survey are discussed and compared with that of modern surveys.
Old and New Approaches
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Old and new approaches’ compare the traditional approach to the cliometric approach of McDonald and Snooks. The discussion of the traditional literary approach focuses on the work of J. H. Round, F. W. Maitland, and H. C. Darby. It is argued that a new approach involving the use of economic theory and the (then) latest computerized statistical techniques, would be able not only to organize the vast data of DB more effectively but also to arrive at a very different interpretation of the nature of the Anglo‐Norman economy.
Tax Assessments for the Geld
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Tax assessments for the geld’ is concerned with whether the national tax called danegeld was arbitrarily imposed on the population as claimed by conventional wisdom. While arbitrary taxes—taxes that bear no systematic relationship to the capacity to pay—lead to revolts, the geld lasted about two centuries. By computerizing the DB data for Essex and Wiltshire, it was possible to statistically test, for both 1066 and 1086, the relationship between Domesday tax assessments on the one hand, and both (but separately) the income and total resources of lay and ecclesiastical manors on the other. Contrary to traditional wisdom, the results show that the geld was not arbitrary—a sign of rational government. Other historical issues are also clarified.
Manorial Income
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Manorial income’ is concerned with whether the income of Domesday manors was systematically related to their resources. The traditional interpretation states that no such relationship existed. This implies that manorial lords, unlike their counterparts today, were economically irrational. In other words, manorial income was the outcome of some sort of medieval lottery. Following a discussion of the nature of manorial income (or ‘annual values’) and their traditional interpretation (by Round, Maitland, and Darby), their relationship with manorial resources is tested econometrically for 1066 and 1086 for both lay and ecclesiastical manors in both Essex and Wiltshire. Contrary to conventional wisdom, strong systematic relationships were found to exist. Medieval man was just as rational as modern man.
The System of Manorial Production
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘The system of manorial production’ for the first time, demonstrates how Anglo‐Norman society operated as an economic system. This involves setting up a model of manorial production and testing it by estimating a range of sophisticated production functions. These production functions are more appropriate to simple medieval economies than to complex modern economies. The econometric results provide a basis for a new interpretation of the Anglo‐Norman economy, which contradicts the conventional wisdom in significant respects (particularly, regarding the rationality of the entire system).
Towards an Economics of Domesday England
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Towards an economics of Domesday England’ is the concluding chapter of the interpretative section (Part I) of the book. (Part II discusses the economic and statistical methods.) It surveys what has been achieved, together with what further work might be undertaken in the future to extend this new view of the Anglo‐Norman economy.
Statistical Methods
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Statistical methods’ describes the statistical procedures used in the econometric analysis of Domesday production and fiscal relationships. These include the least squares, maximum likelihood, and Box–Cox estimation methods allowing for heteroskedasticity.
Economic Production Functions
Authors: McDonald John , Snooks G. D.
Published: October 2003

‘Economic production functions’ describes the characteristics of deterministic production functions used in the analysis of Domesday production. These include the Cobb–Douglas, Constant Elasticity of Substitution, Mukerji, Sato, Generalized Linear, Generalized Quadratic, and production functions.
Tax Reform and the Cost of Capital
Authors: Jorgenson Dale W. , Yun Kun-Young
Published: October 2003

The concept of ‘cost of capital’ was introduced almost thirty years ago and quickly became an indispensable tool for modelling the impact of tax policy on investment behaviour. In the 1980s it assumed a central role in tax reform debates through the closely related concept of the marginal effective tax rate. This book provides a comprehensive treatment of the cost of capital approach to tax policy analysis. In order to make the approach as accessible as possible, the analytical level of the book has been kept to an absolute minimum. The complexities are introduced in a step-by-step fashion, leading up to a representation of tax systems for capital income that is suitable for tax policy analysis. The success of the cost of capital approach is due in large part to its ability to assimilate a virtually unlimited amount of descriptive detail on alternative tax policies. In order to provide guidance to students and practitioners, the book contains a full implementation of the approach for the USA, including an analysis of the alternative proposals that culminated in the highly influential Tax Reform Act of 1986. The chapters of the book are the first in a series of Lectures in Monetary and Fiscal Policy given at Uppsala University in honour of Erik Lindahl, the Swedish economist who was a professor there from 1942 to 1958.
The Conceptualization of the System
Authors: Murphy Antoin E.
Published: October 2003

Discusses the way in which Law modelled the General (later Royal) Bank on the Bank of England and the Mississippi Company on British trading companies such as the East India Company and the South Sea Company.
Law the Improviser
Authors: Murphy Antoin E.
Published: October 2003

Law attempted to keep the System afloat during the Summer of 1720. His growing failure was marked by the return to power of the financier class and the issue of rentes. The problems for the System were further complicated by the outbreak of plague in Marseille. The publication of the French translation of Money and Trade.
Requiem for the Banknote
Authors: Murphy Antoin E.
Published: October 2003

The growing collapse of the System was mirrored by the restoration of gold and silver along with the public burning of banknotes, the continued fall in the price of the Mississippi Company's shares, and John Law's enforced departure from France.
Richard Cantillon's Background
Authors: Murphy Antoin E.
Published: October 2003

Cantillon's genealogy is re‐examined and Ballyheigue, County Kerry shown to be his birthplace. He was probably born between 1680 and 1690, and not, as incorrectly written by Hone, in 1697.
Bernard Cantillon's Expedition to Louisiana, 1719
Authors: Murphy Antoin E.
Published: October 2003

Cantillon, John Law, and Joseph Edward Gage financed a colonizing group, led by Cantillon's brother Bernard, to develop a concession of land in French Louisiana in 1719.
The Mississippi System: Phase Two
Authors: Murphy Antoin E.
Published: October 2003

How Cantillon made his second fortune by speculating against the French exchange rate and the Mississippi Company during the spring of 1720. John Law's attempts to keep the Mississippi System afloat are analysed along with his action in expelling Cantillon from France.
London and Amsterdam: The Great Crashes in These Cities in 1720
Authors: Murphy Antoin E.
Published: October 2003

Describes the Great Crashes in these cities in 1720. The great financial crashes of the Mississippi Company in Paris and the South Sea in London during 1720 and the way in which Cantillon increased his fortune through his speculations are outlined. John Law attempted to invite Cantillon back to France to assist him in his attempt to sustain the Mississippi System.
Debt Collection and Its Legal Consequences
Authors: Murphy Antoin E.
Published: October 2003

Having lost their fortunes in the Mississippi Company and the South Sea, Joseph Gage, Lady Mary Herbert, and various members of her family sued Cantillon at both a criminal and civil level in an effort to stave off bankruptcy.
The Strange Accusations of Christopher Balfe
Authors: Murphy Antoin E.
Published: October 2003

Gage and Lady Mary Herbert used the former Dublin apothecary, Christopher Balfe, to prosecute their affairs in France against Cantillon. He accused Cantillon of conspiracy to murder him and Cantillon retaliated by showing that Balfe was a bigamist.
The Writing and Contents of the Essai Sur La Nature Du Commerce En Général
Authors: Murphy Antoin E.
Published: October 2003

Deals with the model building approach of the Essai, the emphasis on markets and entrepreneurs, the circular flow of income, the linking of money to the real economy, the specie flow mechanism, traded and non‐traded goods, and the critique of financial innovations.
The Demise of Richard Cantillon
Authors: Murphy Antoin E.
Published: October 2003

Describes the strange demise of Richard Cantillon in Albemarle Street in 1734. Was he murdered by his French cook or did he arrange his apparent death and escape to the Dutch Colony of Surinam? Who was the mysterious Chevalier de Louvigny who arrived in Surinam with a collection of documents relating to Richard Cantillon?
Rational Peasants, Efficient Institutions, and a Theory of Rural Organization: Methodological Remarks for Development Economics
Authors: Stiglitz Joseph E.
Published: October 2003

Discusses functional but imperfect institutions, peasant rationality, the nature and role of markets, and the role of history.
A Comparison of Principal–Agent and Bargaining Solutions: The Case of Tenancy Contracts
Authors: Bell Clive
Published: October 2003

Compares and contrasts the solutions yielded by principal‐agent and bargaining formulations of a tenancy contract.
Credit Rationing, Tenancy, Productivity, and the Dynamics of Inequality
Authors: Braverman Avishay , Stiglitz Joseph E.
Published: October 2003

This chapter shows that when there is credit rationing some technological innovations may increase inequality, and that the latter in turn may have adverse effects on long‐run productivity.
On Choice Among Creditors and Bonded Labour Contracts
Authors: Srinivasan T. N.
Published: October 2003

In this chapter, the author looks into the conditions under which borrowing under a voluntary ‘bonded labour’ contract (whereby one may repay loans by providing labour services at less than one's opportunity cost) will be chosen by a sharecropper, if another source of credit besides the landlord is available.
Interlinkages and the Pattern of Competition
Authors: Ray Debraj , Sengupta Kunal
Published: October 2003

In this chapter, the authors make explicit the assumptions required for the frequent presumption of an ‘interlocker's edge’; and, given one or more of these assumptions, try to find out if the theory of interlinking predicts certain patterns of competition between lenders.
Agricultural Institutions for Insurance and Stabilization
Authors: Newbery David M.
Published: October 2003

Gives an overview of the institutional implications of the economic theory of risk and associated market failures.