bluuebunny/crossref_metadata_2025_split huggingface dataset:
Balanced Growth and Efficient Programme of Very‐Long‐Run Growth
Authors: Morishima Michio 
Published: October 2003

Abstract
This chapter and the previous one are devoted to an analysis of the von Neumann model of economic expansion, which may be considered as a variant of the dynamic Leontief system. The original von Neumann model is a slave system, in which the object of production is mere enlargement at the subsistence level of wages. In Ch. 6, the Turnpike Theorem, which asserts that there is a long‐run tendency for the optimum growth path of an economy to approximate to the von Neumann path of steady proportional growth, is proved for a von Neumann–Leontief model and for a von Neumann–Gale model.
Theory of Economic Growth
Authors: Morishima Michio 
Published: October 2003

Abstract
Discusses economic growth within the framework of the theory of equilibrium. Attempts on the one hand to resolve much of the controversy on growth that results from differences in assumptions made by various authors and, on the other hand, to make a contribution to the theory of dynamic economics. Practical problems are not discussed, and the economy dealt with is isolated from foreign countries and is provided with a knowledge of industrial arts that does not change throughout the time horizon concerned. Factors such as public spending, foreign trade, technical improvement, and monetary policies are, therefore, ignored, even though they are usually important in determining the actual rate of economic growth. In the first half of the book, decisions regarding investment are made by private enterprises either in the neoclassical or Keynesian manner, while in the second half the planning authorities are responsible for directing firms so that they invest society's savings in such a way that the economy will progress along a path of efficient or optimal growth. The book is divided into four parts that discuss prototype models of economic growth, models resulting from the von Neumann model, models after the ‘von Neumann revolution’, and further model developments. An appendix is included on the von Neumann equilibrium, which aims at a clearer comprehension of Chs. 6 and 7.
Possibility of Persistent Growth Equilibrium
Authors: Morishima Michio 
Published: October 2003

Abstract
Examines the possibility of persistent growth equilibrium. The first part of the chapter looks at price‐guided choice of techniques and factor‐price frontiers. The second digresses into the degree of mechanization problem. Remaining parts discuss the warranted rate of growth, the natural rate of growth, and an alternative approach to growth equilibrium due to Hicks. The final part presents a synthesis of the two methods for finding a growth equilibrium discussed in the chapter: the ‘Oxford’ method principally due to Roy Harrod, and the ‘Cambridge’ method, which is accepted by such Cambridge economists as Joan Robinson, N. Kaldor, P. Sraffa, R. F. Kahn, and L. L. Pasinetti.
A Neo‐Classical Passage to Growth Equilibrium
Authors: Morishima Michio 
Published: October 2003

Abstract
Investigates whether a series of the short‐run equilibria starting from an arbitrarily (or historically) given capital–labour endowment will eventually approach the state of the long‐run or ‘Silvery Equilibrium’. Taking a neoclassical approach to growth equilibrium, it is found that once a more general model of flexible population growth is used, the Silvery Equilibrium may be unstable even though the relative capital‐intensity condition is satisfied. Also, the stability depends not only upon the capital intensities of the two industries but also upon the relative steepness of the warranted‐rate‐of‐growth and the natural‐rate‐of‐growth curve and the flexibility of workers’ and capitalists’ consumption–savings decisions.
Harrodian Knife‐Edge in a Keynes‐Type ‘Fixprice’ Economy
Authors: Morishima Michio 
Published: October 2003

Abstract
Among the assumptions underlying the analysis of stability of growth equilibrium already made in the book, the following two have played the most important roles in deriving the conclusions: first, prices and the wage rate are perfectly flexible so that the price of any good or any factor of production will go down to zero if excess supply of it cannot be eliminated (the Rule of Free Goods); second, unless the price of the capital service is zero, the existing stock of capital is fully utilized and investment is made according to the Acceleration Principle. However, as soon as a progression is made from the Walras‐type ‘flexprice’ model (where quantities are fixed in the short run, and prices adjust faster than quantities) to a ‘fixprice’ model (where prices are fixed in the short run, and quantities adjust faster than prices), either full employment of labour or full utilization of capital is no longer automatically established. Also, in the absence of full utilization of capital, it is evident that investment decisions do not obey the Acceleration Principle. The first four sections of this chapter look at price flexibility and full employment, the possibility of a Keynesian short‐run equilibrium with unemployment, the induction of centrifugal forces around the Silvery Equilibrium by the Harrodian investment function, and the necessity of unemployment in a ‘fixprice’ economy. The last section looks at the possibility of avoiding this last Iron Rule: that in fixprice economies where the Rule of Competitive Pricing does not work, a state of full employment cannot be kept unless the warranted rate of growth is equated with the natural rate of growth.
Equilibrium Growth (I) Cassel–Von Neumann Ray
Authors: Morishima Michio 
Published: October 2003

Abstract
In the previous chapter, the state of balanced growth of all outputs with continued full employment of labour was described in terms of six sets of inequalities. Such a state of affairs has been called a Silvery Equilibrium, which is reduced to the familiar Golden Equilibrium in the particular case where no worker saves and no capitalist consumes at all. In this chapter, the existence is established of a balanced growth at the natural rate in one step but not two. The impossibility of perverse cases is demonstrated if various assumptions put forward in Ch. 6 are made. The new argument uses game theory as before. The different sections of the chapter look at the game‐theoretic approach, the preliminary production‐pricing game, the existence and uniqueness of the ‘fair’ wage rate, equivalence between the ‘game‐theoretic’ and ‘balanced growth’ solutions, groping for the equilibrium game, the equilibrium game and the Silvery Equilibrium, and characterization of the fair wage rate as the warranted and the greatest technically possible real wage rate.
Dynamic Utility Functions Proposed
Authors: Morishima Michio 
Published: October 2003

Abstract
Various dynamic utility functions are proposed for optimum economic growth. The different sections of the chapter discuss: maximization of satisfaction over time; whether dynamic utility should be cardinal; the postulated properties of dynamic preferences—separability, consistence, and stationariness; and the invariability of the internal structure of the dynamic utility function with respect to monotonic transformation of the index. All this discussion is based on the assumption that the marginal rate of substitution between any two contemporary goods is independent of consumption in any other period. Finally, an alternative proposal is made based on the fact that the marginal rate of substitution between any two contemporary goods is not independent of consumption in any other period.
Flexible Population and Avoidance of Malthusian Poverty
Authors: Morishima Michio 
Published: October 2003

Abstract
So far, this book has been concerned with an economy where the labour force increases at a given constant rate, independently of the real wage rate and other economic factors.. However, the rate of population growth has not been stationary in many countries, but has been influenced inter alia by the level of income per individual, the level of capital per individual (hospitals/rooms per individual, etc.), the level of specific economic activities (production of medicines, etc.), and so on. These influences are very complicated, and this last part of the book begins by taking into account the effect of the real wage rate on the growth rate of population. The different sections of the chapter discuss: a parable by Volterra on cyclical poverty that is applicable to a closed economy at the crudest stage; the existence of a growth equilibrium in a neo‐Malthusian economy; the application of the Eilenberg–Montgomery fixed‐point theorem; positivity of total production and the real wage rate; and positivity of the equilibrium rate of growth.
An Alternative Approach: Remodelling and Refinements
Authors: Morishima Michio 
Published: October 2003

Abstract
The argument developed in the previous chapter was based on the tacit assumption that the production of goods by means of goods and labour is independent of the feeding of labour, and was described in terms of the matrices of input and output coefficients and the vector of labour‐input coefficients, all of which were considered as technologically given constants. However, it is difficult to obtain precise figures of these coefficients, especially for the labour‐input coefficients, without knowing how and at what level people are fed; the productivity of labour depends not only on technology in the narrowest sense but also on the workers’ state of health, their living and working conditions, etc. Further, in a slave economy, with the wages fixed at a subsistence level, the productivity of labour was low, and it is this that led to its replacement by a more productive system—the capitalist economy. It is not surprising that outputs of goods might increase, even though the allocation of available goods among industries and families became unfavourable for the former; in fact, the positive indirect effect on outputs of a transfer of goods from industries to families causing an improvement in the welfare of the workers might be so strong as to overcome the negative direct effect on outputs of the decrease in industrial inputs. Thus, the production of goods and the feeding of men should be treated as an inseparable process, and this is the approach taken in this chapter, which discusses: the production of goods and ‘men’ by means of goods and ‘men’; the properties of aggregate production processes; conditions for the Silvery Equilibrium; modification of the rule of competitive pricing such that Keynesian involuntary unemployment is allowed for; the existence of ‘quasi‐equilibrium’ processes and prices; the upper semicontinuity of quasi‐equilibrium prices; the equilibration of quasi‐equilibrium; efficiency and optimality in an economy with a flexible labour force; instantaneous efficiency and Pareto optimality of the Silvery Equilibrium; the possibility of optimum cyclical growth of production of goods and men; and the intertemporal efficiency and Pareto optimality of the Golden Equilibrium.
Simultaneous Optimization of Population and Capital
Authors: Morishima Michio 
Published: October 2003

Abstract
The problem of optimum savings has been discussed by Ramsey on the assumption of a constant population and later by a number of economists on the more general assumption that the labour force expands at a constant exogenously fixed rate; different rates of population growth lead to different solutions; i.e. the path of optimum capital accumulation is relative to the population growth. In contrast, Meade and others have been concerned with the problem of optimum population, assuming among other things that at any given time the economy is provided with a given rate of savings as well as a given stock of capital equipment to be used; it follows that the path of optimum population is relative to capital accumulation. It is evident that these two partial optimization procedures should be synthesized so as to give a genuine supreme path, which is optimum with respect to both capital and population. This final chapter generalizes the Ramsey–Meade problem in that direction and shows that two kinds of long‐run paths—efficient and optimum paths—will under some conditions converge to the Golden Growth path when the time horizon of the paths becomes infinite; the two long‐run tendencies that are derived may be regarded as extensions of those discussed in the chapters entitled First and Second Turnpike Theorems. The different sections of the chapter discuss: the generalized Ramsey–Meade problem; the finding that the Golden Equilibrium rate of growth is greater than the Silvery Equilibrium rate; the Average Final State Turnpike Theorem; the strong superadditivity of processes—a sufficient condition for strong convergence; the tendency towards the ‘top facet’ as the general rule; cyclic phenomena; the Average Consumption Turnpike Theorem and its proof; and aversion to fluctuation in consumption.
Dynamic Econometrics
Authors: Hendry David F. 
Published: October 2003

Abstract
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

AbstractEconometric 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.
A Typology of Linear Dynamic Equations
Authors: Hendry David F. 
Published: October 2003

AbstractNine 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

Abstract
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

AbstractMethods 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

AbstractEncompassing 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

AbstractThe 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

AbstractA 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

AbstractThe 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

Abstract
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

AbstractThis 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

AbstractFocuses 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.
Chaotic Economic Dynamics
Authors: Goodwin Richard M. 
Published: October 2003

AbstractThis 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

Abstract
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

AbstractConsiders 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.