A Treatise on the Family. G. S. Becker. Cambridge, MA: Harvard University Press. 1981. Gary Becker is one of the most famous and influential economists of the second half of the 20th century, a fervent contributor to and expounder of the University of Chicago free-market philosophy, and winner of the 1992 Nobel Prize in economics. Although any book with the word "treatise" in its title is clearly intended to have an impact, one coming from someone as brilliant and controversial as Becker certainly had such a lofty goal. It has received many article-length reviews in several disciplines (Ben-Porath, 1982; Bergmann, 1995; Foster, 1993; Hannan, 1982), which is one measure of its scholarly importance, and yet its impact is, I think, less than it may have initially appeared, especially for scholars with substantive interests in the family. This book is, its title notwithstanding, more about economics and the economic approach to behavior than about the family. In the first sentence of the preface, Becker writes "In this book, I develop an economic or rational choice approach to the family." Lest anyone accuse him of focusing on traditional (i.e., material) economics topics, such as family income, poverty, and labor supply, he immediately emphasizes that those topics are not his focus. "My intent is more ambitious: to analyze marriage, births, divorce, division of labor in households, prestige, and other non-material behavior with the tools and framework developed for material behavior." Indeed, the book includes chapters on many of these issues. One chapter examines the principles of the efficient division of labor in households, three analyze marriage and divorce, three analyze various child-related issues (fertility and intergenerational mobility), and others focus on broader family issues, such as intrafamily resource allocation. His analysis is not, he believes, constrained by time or place. His intention is "to present a comprehensive analysis that is applicable, at least in part, to families in the past as well as the present, in primitive as well as modern societies, and in Eastern as well as Western cultures." His tone is profoundly conservative and utterly skeptical of any constructive role for government programs. There is a clear sense of how much better things were in the old days of a genderbased division of labor and low market-work rates for married women. Indeed, Becker is ready and able to show in Chapter 2 that such a state of affairs was efficient and induced not by market or societal discrimination (although he allows that it might exist) but by small underlying household productivity differences that arise primarily from what he refers to as "complementarities" between caring for young children while carrying another to term. Most family scholars would probably find that an unconvincingly simple explanation for a profound and complex phenomenon. What, then, is the salient contribution of Treatise on the Family? It is not literally the idea that economics could be applied to the nonmarket sector and to family life because Becker had already established that with considerable success and influence. At its core, microeconomics is simple, characterized by a belief in the importance of prices and markets, the role of self-interested or rational behavior, and, somewhat less centrally, the stability of preferences. It was Becker's singular and invaluable contribution to appreciate that the behaviors potentially amenable to the economic approach were not limited to phenomenon with explicit monetary prices and formal markets. Indeed, during the late 1950s and throughout the 1960s, he did undeniably important and pioneering work extending the domain of economics to such topics as labor market discrimination, fertility, crime, human capital, household production, and the allocation of time. Nor is Becker's contribution the detailed analyses themselves. Many of them are, frankly, odd, idiosyncratic, and off-putting. …

A Treatise on the Family

Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

Estimation and Inference in Econometrics

Foundations of Economic Analysis

Dynamic optimization: The calculus of variations and optimal control in economics and management: Morton I. KAMIEN and Nancy L. SCHWARTZ Volume 4 in: Dynamic Economics: Theory and Applications, North-Holland, New York, 1981, xi + 331 pages, Dfl.90.00

The relative advantages of private property and common property for the efficiency, equity, and sustainability of natural resource use patterns have been debated in legal and economic literatures for several centuries. The debate has been clouded by a troika of confusions that relate to the difference between (1) common property and open-access regimes, (2) common-pool resources and common property regimes, and (3) a resource system and the flow of resource units. A property right is an enforceable authority to undertake particular actions in specific domains. The rights of access, withdrawal, management, exclusion and alienation can be separately assigned to different individuals as well as being viewed as a cumulative scale moving from the minimal right of access through possessing full ownership rights. All of these rights may be held by single individuals or by collectivities. Some attributes of common-pool resources are conducive to the use of communal proprietorship or ownership and others are conducive to individual rights to withdrawal, management, exclusion and alienation. Many of the lessons learned from the operation of communal property regimes related to natural resource systems are theoretically relevant to the understanding of a wide diversity of property regimes that are extensively used in modern societies. JEL classification: K1, Q2, H4, D7

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Private and Common Property Rights

1. Essential elements of continuous time dynamic optimization 2. Necessary conditions for a simplified control problem 3. Concavity and sufficiency in optimal control problems 4. The maximum principle and economic interpretations 5. Linear optimal control problems 6. Necessary and sufficient conditions for a general class of control problems 7. Necessary and sufficient conditions for isoperimetric problems 8. Economic characterization of reciprocal isoperimetric problems 9. The dynamic envelope theorem and economic interpretations 10. The dynamic envelope theorem and transversality conditions 11. Comparative dynamics via envelope methods 12. Discounting, current values, and time consistency 13. Local stability and phase portraits of autonomous differential equations 14. Necessary and sufficient conditions for infinite horizon control problems 15. The neoclassical optimal economic growth model 16. A dynamic limit pricing model of the firm 17. The adjustment cost model of the firm 18. Qualitative properties of infinite horizon optimal control problems with one state variable and one control variable 19. Dynamic programming and the Hamilton-Jacobi-Bellman equation 20. Intertemporal duality in the adjustment cost model of the firm.

https://assets.cambridge.org/97805218/42723/frontmatter/9780521842723_frontmatter.pdf

Foundations of Dynamic Economic Analysis: Optimal Control Theory and Applications

How to do comparative dynamics on the back of an envelope in optimal control theory

Foundations of Dynamic Economic Analysis presents a modern and thorough exposition of the fundamental mathematical formalism used to study optimal control theory, ie, continuous time dynamic economic processes, and to interpret dynamic economic behavior The style of presentation, with its continual emphasis on the economic interpretation of mathematics and models, distinguishes it from several other excellent texts on the subject This approach is aided dramatically by introducing the dynamic envelope theorem and the method of comparative dynamics early in the exposition Accordingly, motivated and economically revealing proofs of the transversality conditions come about by use of the dynamic envelope theorem Furthermore, such sequencing of the material naturally leads to the development of the primal-dual method of comparative dynamics and dynamic duality theory, two modern approaches used to tease out the empirical content of optimal control models The stylistic approach ultimately draws attention to the empirical richness of optimal control theory, a feature missing in virtually all other textbooks of this type

Foundations of Dynamic Economic Analysis

A new method of analyzing the efficient portfolio problem under the assumption that short sales are allowed is presented. It is based on the remarkable finding that the original asset set can be reorganized as a set of uncorrelated portfolios, here named principal portfolios. The original problem of portfolio selection from the existing, correlated assets is thereby traded for the reduced problem of choosing from a set of uncorrelated portfolios. These portfolios constitute a new investment environment of uncorrelated assets, thereby providing significant conceptual and practical simplification in any portfolio optimization process such as the determination of the efficient frontier. The principal portfolio analysis of the efficient frontier reveals new features of the volatility structure of the optimal portfolios.

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Principal Portfolios: Recasting the Efficient Frontier

autonomous variational calculus problem with a fixed vector of initial stocks, fixed initial and terminal time values, a free vector of terminal stocks, and a time-independent vector of parameters. It is shown that if the solution of the variational problem is smooth enough, the qualitative effects of parameter perturbations on the entire optimal arcs can be represented by a generalized Slutsky-type matrix, which holds in integral form and is symmetric negative semidefinite. Sufficient conditions for the optimal value function to be convex in the parameters are also given.

Michael R. Caputo

Papers

Foundations of Dynamic Economic Analysis: Optimal Control Theory and Applications

How to do comparative dynamics on the back of an envelope in optimal control theory

Foundations of Dynamic Economic Analysis

Principal Portfolios: Recasting the Efficient Frontier

Comparative Dynamics via Envelope Methods in Variational Calculus