A Comparison of Shift-Share and the Ras Adjustment

Linear models have been widely used in economic and other decision-making situations due to their simplicity and perhaps flexibility. For statistical estimation problems linearity has other advantages. In practical applications to real world data, linear models have to face two basic constraints. One is that the decision variables and sometimes the state variables have to be constrained in the sense of inequalities and hence the characterization of decision regions is very important. The second concerns the generating mechanisms of the linear model, e.g. it may be generated by a quadratic objective function as in the linear decision rule (LDR) approach [4], or in the team decision approach with a quadratic pay-off function [6, 10]; it may also be generated by the expected utility function as in stochastic linear programming [12, 18].

Linear allocation rules under uncertainty

In recent times economic planning in different countries has increasingly emphasized the role of risk and uncertainty in the planning process. Reasons have differed for different countries. For less developed countries (LDC) with large commodity exports, stabilization policies aimed at reducing income fluctuations have been found very important, along with policies for growth of income and employment; for centrally planned economies (CPE) divergences of actual production and distribution systems from the planned sectoral targets have been related to investment cycles and the need for building safety margins in different sectors has been particularly emphasized. For a developed economy with public and private sectors, the planning process, dependent on the theory of indicative planning ard decentralization of decisions has emphasized the various informational gaps and competing risks which may impede the cooperative framework of the solution. In a noncooperative game-theoretic framework, the need for building consistency in the set of strategies pursued by different players is all the greater in an environment, where the risk perceptions are different for different players.

Uncertainty and economic planning: a selective survey and appraisal

Modeling for Government and Business

The international trade statistics often show simultaneous imports and exports of the same commodity, even on the highest level of disaggregation and for bilateral trade flows. This phenomenon is referred to as ‘intra-industry trade’ [Balassa, 1966] or ‘two-way international trade’ [Gray, 1973]1; we prefer the latter, since two-way trade occurs not only on the industry level, but on all levels of aggregation.

A. S. W. De Vries

Papers

Modeling for Government and Business

Two-way Trade in a Verdoorn Type Model