Showing papers in "Quarterly Journal of Economics in 1973"
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TL;DR: In this paper, the authors present a model in which signaling is implicitly defined and explains its usefulness, in which the employer is not sure of the productive capabilities of an individual at the time he/she hires him.
Abstract: Publisher Summary This chapter discusses job market signaling. The term market signaling is not exactly a part of the well-defined, technical vocabulary of the economist. The chapter presents a model in which signaling is implicitly defined and explains its usefulness. In most job markets, the employer is not sure of the productive capabilities of an individual at the time he hires him. The fact that it takes time to learn an individual's productive capabilities means that hiring is an investment decision. On the basis of previous experience in the market, the employer has conditional probability assessments over productive capacity with various combinations of signals and indices. This chapter presents an introduction to Spence's more extensive analysis of market signaling.
12,195 citations
TL;DR: In this article, the authors discuss the tunnel effect and its role in integration and revolution, and conclude that social, historical, cultural, and institutional determinants of its strength are among the most important factors.
Abstract: I. Gratification over advances of others: the tunnel effect introduced, 545. — II. Some evidence, 548. — III. Consequences for integration and revolution, 550. — IV. From gratification to indignation, 552. — V. The tunnel effect: social, historical, cultural, and institutional determinants of its strength, 553. — VI. An alternative reaction: apprehension over advances of others, 559. — VII. Concluding remarks, 560. — Mathematical appendix, 562.
782 citations
TL;DR: In this article, the authors present a theoretical analysis of smuggling and show that for nonprohibitive tariffs and constant costs smaller than the tariff-included price and perfect competition in smuggling, smuggling cannot be uniquely welfare-ranked vis-a-vis non-smuggling.
Abstract: Publisher Summary This chapter presents a theoretical analysis of smuggling. It is commonly argued that smuggling must improve economic welfare since it constitutes (partial or total) evasion of the tariffs (or quantitative restrictions), which, for a small country, would signify a suboptimal policy. As smuggling merely represents, from a welfare point of view, yet another way in which exportable are transformed into importable, it must be represented as a smuggling transformation (or offer) curve. However, it is clear that this transformation curve must be less favorable than the terms of trade. With perfect competition in smuggling, both the foreign price (the terms of trade) and the domestic price are given to the individual smuggler. With monopoly in smuggling, however, several possibilities are open. In the monopolistic smuggling case, the smuggler is a nonresident whose profits, therefore, do not constitute welfare for the country that experiences smuggling. For nonprohibitive tariffs and constant costs smaller than the tariff-included price and perfect competition in smuggling, smuggling cannot be uniquely welfare-ranked vis-a-vis non-smuggling.
218 citations
TL;DR: In this paper, a simple market model is proposed for a single-firm single-player setting with probability matching, and the dynamics of adjustment is analyzed. But the model is not suitable for the case of a single firm.
Abstract: Stochastic learning theory, 242. — Probability matching: an example, 244. — The model, 247. — Alternative states of the market: a monopoly model, 252. — A simple market model, 254. — Further properties of the single-firm model, 256. — The dynamics of adjustment, 258. — The firm in disequilibrium, 261. — A final note: rules of thumb, 264.
178 citations
TL;DR: In this paper, the authors present a general framework for minimum wage and wage ceiling, and some aspects of market demand and supply, including the effect of training and non-salary income.
Abstract: I. The general framework, 220. — II. Productivity changes and nonlabor income, 225. — III. Overtime, 227. — IV. The effect of training, 228. — V. Minimum wage and wage ceiling, 230. — VI. Some aspects of market demand and supply, 233. — VII. Concluding remarks, 234. — Appendix, 234.
148 citations
TL;DR: In this paper, the authors discuss the implications of the Rawls' criterion for the graduated taxation of wage incomes within the context of two simple models of household earning decisions and describe the criterion and the defense of this principle.
Abstract: The conception of distributive justice advocated by John Rawls, most comprehensively in A Theory of Justice , appears to be the first complete principle of social choice to command wide and serious interest since the time of sum-of-satisfactions utilitarianism. This chapter discusses the implications of the Rawls' criterion for the graduated taxation of wage incomes within the context of two simple models of household earning decisions. It describes the criterion and Rawls' defense of this principle. Rawls refers to the general concept of justice as the notion of a standard by which the distribution of the burdens and benefits from cooperation by the individuals in society is to be determined. The particular conception of justice, the specific distribution criterion, argued for in Justice is what he calls the difference principle: in the just economy, the welfare of the worst-off is as large as is feasible. The principle does not imply the obliteration of all inequalities in well-being. Differences in liberty and opportunity, income, and other primary social goods are justifiable insofar as they benefit the least well-off. It is the modern-day analogue of Aquinas: everything for the greater utility of the poor.
141 citations
TL;DR: Tawney as discussed by the authors proposed a model of inheritance based on the primogeniture and the mating function, which was later extended by Tawney to include random mating and class mating.
Abstract: I. Introduction, 608. — II. Elements of a model of inheritance, 610. — III. Primogeniture, 612. — IV. The mating function, 614. — V. Random mating, 616. — VI. Class mating, 620. — VII. Assortative mating, 623. Every generation regards as natural the institutions to which it is accustomed. — R. H. Tawney
127 citations
TL;DR: The Hirschman-compliance index and the extreme version of the linkage hypothesis, and the balanced-growth version ofthe linkage hypothesis are compared.
Abstract: I. Consolidated I-O tables averaged for developed and less developed countries, 159. — II. Linkage indices, 161. — III. The Hirschman-compliance index and the extreme version of the linkage hypothesis, 165. — IV. The balanced-growth version of the linkage hypothesis, 167. — V. Summary' and conclusions, 171.
115 citations
TL;DR: In this article, a non-stationary innovation possibility function is defined for the process of accumulating knowledge, and a growth model for knowledge accumulation with nonstationary possibility functions is presented.
Abstract: A. The process of accumulating knowledge, 208. — B. Growth with non-stationary innovation possibility function, 213. — C. Conclusion, 218.
108 citations
TL;DR: The estimated model: comparative statics, 599 as discussed by the authors was used to estimate the dynamics of population change in the United States, and the estimated model was shown to be accurate.
Abstract: I. Introduction, 581. — II. Data, 583. — III. Effects of population change, 587. — IV. Causes of population change, 590. — V. Econometrics: testing and estimation, 594. — VI. The estimated model: comparative statics, 599. — VII. The estimated model: dynamics, 600. — VIII. Conclusions, 604. — Appendix: basic data series, 606.
103 citations
TL;DR: In this article, the authors present an analysis of macro policy weights in the postwar period and conclude that macro policy weighting in the post-war period has been positively correlated with economic performance.
Abstract: I. Framework of the analysis, 26. — II. Macro policy weights in the postwar period, 30. — III. Conclusion, 43.
TL;DR: In this paper, the necessary conditions for Arrow optimum to imply ex-post Pareto optimum are defined, and they are shown to be sufficient for the Arrow optimum given Arrow optimum.
Abstract: I Ex ante and ex post optimum, 81 — II Consumers and commodities, 83 — III Consumer choice and the subjectivity theorem, 85 — IV Necessary conditions for ex post Pareto optimum given Arrow optimum, 88 — V Production, 89 — VI Efficiency, 91 — VII Economies where the necessary conditions for Arrow optimum to imply ex post Pareto optimum are sufficient, 93 — Table of notation, 94
TL;DR: In this article, a measure of uncertainty avoidance and the theory of the firm under uncertainty are discussed. But the authors focus on the market structure-uncertainty avoidance relationship and do not consider the relationship between market power and uncertainty avoidance behavior.
Abstract: I. The market structure-uncertainty avoidance relationship, 455. — II. Rationale behind the Galbraith-Caves hypothesis, 456. — III. A measure of uncertainty avoidance and the theory of the firm under uncertainty, 458. — IV. The Galbraith-Caves thesis in the context of the firm under uncertainty, 460. — V. Testing the relationship between market power and uncertainty-avoidance behavior, 463. — VI. Empirical results, 469. — VII. Conclusion, 472.
TL;DR: In this paper, the authors discuss the inducement of innovations and the adjustment path of actual to latent demand in the context of Argentine agricultural development, including the adoption of new technologies and their adjustment path.
Abstract: I. The inducement of innovations, 412. — II. Decision processes in the inducement of innovations, 415. — III. The adoption of new technologies, 422. — IV. The adjustment path of actual to latent demand, 424. — V. Induced innovations and Argentine agricultural development, 428.
TL;DR: In this paper, the contract curve and social welfare function are discussed. But the focus is on the special cases and not on the whole contract curve, as we do in this paper.
Abstract: Introduction, 320. — I. The taxpayers preferences, 321. — II. The beneficiary's preferences, 324. — III. The contract curve and social welfare function, 325. — IV. Special cases, 325. — Conclusion, 329.
TL;DR: In this paper, the marginal utility of income of two consumers, three consumers, and many consumers is analyzed. And the authors show that marginal utility is a function of supply price, supply price and marginal utility.
Abstract: I. Two consumers, 3. — II. Many consumers, 12. — III. Varying supply price, 20. — IV. Varying marginal utility of income, 22.
TL;DR: The behavior of the labor-managed enterprise is discussed in this paper, where the separation of ownership and control is discussed, and the self-financing and investment incentives are discussed.
Abstract: I. The behavior of the labor-managed enterprise, 377. — II. The capitalist twin, 381. — III. The separation of ownership and control, 385. — IV. Self-financing and investment incentives, 390. — V. Conclusions, 391.
TL;DR: In this article, the authors argue that the only ultimate source of utility is the disposition of time, and that time is a constraint rather than a primary commodity whose allocation is to be optimized.
Abstract: In this informal essay I take an extreme position on the importance of time. I argue that the only ultimate source of utility is the disposition of time. (Even the Becker (1965) and Linder (1970) analyses treat time primarily as a constraint rather than as the primary commodity whose allocation is to be optimized.) Our ob
TL;DR: The role of the income effect and the modified Linder Theorem was discussed in this article, where the authors concluded that the Linder theorem does not necessarily imply the existence of an income effect.
Abstract: 1. The modified Linder Theorem, 630. — 2. The role of the income effect, 631. —3. Concluding comment, 632.
TL;DR: In this article, two classical welfare theorems for an economy containing pollution are presented. But they do not consider the model of decentralized equilibrium with effluent charges, which we consider in this paper.
Abstract: I. Introduction, 503. — II. The model, 505. — III. Decentralized equilibrium with effluent charges, 512. — IV. Two classical welfare theorems for an economy containing pollution, 516. — V. Concluding comments, 522.
TL;DR: In this article, the authors present a theory for the allocation of decisions between the constitutional and parliamentary stages of a democratic system, and discuss its implications for democratic reforms, including the implications for electoral reform.
Abstract: I. The constitutional stage, 61. — II. The parliamentary stage, 64. — III. The allocation of decisions between the constitutional and parliamentary stages, 70. — IV. Summary of the theory, 77. — V. Implications for democratic reforms, 79.
TL;DR: In this paper, the authors discuss the effect of currency devaluation on the terms of trade and conclude that the terms-of-trade effect can be zero or negative, depending on the currency.
Abstract: I. Is devaluation deflationary? 437. — II. The Keynesian model, 442. — III. Commercial policy under fixed rates, 446. — IV. Commercial policy under flexible rates, 449. — V. The terms-of-trade effect can be zero or negative, 452. — VI. Concluding remarks, 453.
TL;DR: In this paper, the nature of market imperfections is discussed and a model for market imperfection is proposed. But the model is based on a model that is not suitable for the real world.
Abstract: I. Introduction, 148. — II. The model, 150. — III. The nature of market imperfections, 152. — IV. Summary and implications, 153.
TL;DR: In this paper, the authors present the results of one such exploration, which is the estimation of private returns using incomes adjusted to a common annual hourly basis, which raises with new force a question as to the economic value of education.
Abstract: The visit of economics to education reminds one of the story of the man who came to dinner and stayed to become a permanent resident in the household. The guest appears to be a prestigious fellow and seems to know what he is about, so he is even increasingly consulted on the dinner menus, just as economic analyses of education are given more and more weight. Yet, while important new insights into certain aspects of education have been added by economists, there is still a great deal to be learned about the limits as well as the potential of economic analysis in this area. The initial attempts to assess the economic role of education were frankly first approximations.' The next steps have not gone far beyond that, in large part due to intractable data limitations. Yet the issues are too important to pass over, and there rightly continue to be attempts to gain additional understanding by exploring oblique approaches with limited types of information. This paper presents the results of one such exploration. The major variation from the by-now-conventional methods, which is employed here, is the estimation of private returns using incomes adjusted to a common annual hourly basis. This revised approach raises with new force a question as to the economic value of education. Estimates of the returns to education are based on income-age profiles projected for "typical" individuals in each education category. Most estimates of income-age profiles, including the study
TL;DR: In this article, an alternative approach was proposed to deal with the problem of unstructured data in a model-based approach. But, the model is not suitable for large-scale data sets.
Abstract: I. Introduction, 267. — II. The model, 269. — III. The data, 272. — IV. Empirical findings, 274. — V. An alternative approach, 275.