Showing papers by "Robert M. Solow published in 1971"

Mathematical Theories of Economic Growth

Abstract: One-sector growth models technological change in the one-sector model money and economic growth a preview of multisector growth models Leontief models and alternative techniques neoclassical multisector models without joint production turnpike theorems and efficient economic growth optimal economic growth.

The Economist's Approach to Pollution and Its Control

Abstract: pollution. In the nature of the case, many of you will know more than I do about the physical and chemical causes and the biological consequences of environmental pollution. But pollution is also an economic problem, and economists have rather special ways of thinking about it, with implications for the design of environmental policy. What I can hope to do is to put the problem of pollution into the economist's framework, to see if that way of regarding it leads to any basic principles of regulation and control. The ancient economists used to classify productive resources as Land, Labor, and Capital. In this classification "Land" stood for all those natural resources that are given in amount and cannot be augmented by human decision. Some natural resources are

Blood and Thunder

Abstract: The subtitle of this extraordinarily interesting book gives a fair indication of its ambitions. Most of it is a detailed comparison of two alternative ways of organizing the collection and allocation of human blood for transfusion and similar purposes. On this level, it appears to beand probably is-a devastating and unanswerable indictment of the American system as inferior to the British in efficiency, morality, and attractiveness. From this secure beachhead, Professor Titmuss launches a broad attack on the market as a mechanism for the mobilization and allocation of scarce resources, and, even more generally, on the whole economizing mode of thought which-as he might have said if he were a different sort of man-knows the price of everything and the value of nothing. On this broader front he scores some important points but is ultimately confused. I hope to show that what arouses Titmuss's anger and scorn is usually not, as he thinks, the use of economic reasoning but its misuse. There is a lesson here for everyone interested in social policy, because some economists do have a way of drifting into sharp propositions that cannot be fully supported even on narrowly economic grounds. But blood first, thunder afterward.

Labor Force Structure, Potential Output, and Productivity

Abstract: ECONOMISTS HAVE ATTEMPTED TO ESTIMATE potential gross national product for over a decade now. Potential GNP measures the output the economy would produce if it were operating at some fixed, fairly low level of unemployment, usually defined by an aggregate unemployment rate of about 4 percent. The difference between potential and actual GNP at any point in time is known as the GNP gap. In 1962, Arthur Okun published an analysis that has been the benchmark for official measures of potential GNP ever since, and in the process enunciated what came to be known as Okun's law, which relates the unemployment rate to the percentage GNP gap.' Potential GNP and Okun's law became two of the handiest tools of analysis and presentation for economic stabilization problems. Particularly during the first half of the 1960s, when GNP was running below potential and policy was devoted to closing the gap, no sophisticated analysis of the economy failed to identify the loss in real output that was associated with an economy falling short of full employment. The careful estimation of the full employment surplus in the federal budget has been an important by-product of the estimation of potential

Some Implications of Alternative Criteria for the Firm

Abstract: To avoid elementary misunderstanding, I ought to begin by saying that there is unlikely ever to be a simple answer to the question: What does a firm maximize? In the first place, a firm, especially a large firm, may be unable to maximize anything. Different depart­ments, different committees, different individuals may have different and even conflicting objectives which they pursue with a degree of success depending on a complicated balance of forces and personali­ties. In the second place, even if the firm does have a coherent objective or set of objectives — a utility function — it may be content with approximate solutions and rules of thumb. And in the third place, if the firm does actually maximize something, the thing that it maximizes in any concrete case is likely to be a very complicated quantity, depending on the relative strengths of many interests and persons — owners, managers, the government, public opinion — and on the character of the markets in which it operates. To understand the behaviour of a single complicated firm would be a combined operation in economics, sociology and psychiatry, and in the end the conclusions might not generalize very far, or at all.