Showing papers on "Factor price published in 1974"

Price Expectations and the Welfare Gains from Price Stabilization

Abstract: The gains from price stabilization are analyzed in the case where supply decisions are made before the actual market price is known and so are based on price expectations. Two expectations generating mechanisms are considered—the "adaptive" scheme and the "rational" hypothesis. In both cases price stabilization provides an overall welfare gain that is higher than when supply depends upon actual prices. The distribution of these gains among producers and consumers is shown to depend crucially upon how the expectations are generated, as well as the source and autoregressive properties of the random price fluctuations.

Regional Growth: Interstate and Intersectoral Factor Reallocations

Abstract: T ESTED with regional data for the United States, the neoclassical growth model has yielded inconsistent results. Borts and Stein (1964, chapter 3) employed a simple growth model relating interregional factor movements to factor price differentials, but found little evidence of responsiveness. In a recent paper Smith (1973) found such a model consistent with the long-run factor mobility experience of states. Since a similar model was employed in both studies, the contrasting results may be ascribed to the use of inappropriate data in the test of the model of Borts and Stein, and/or inadequate model specification. They tested their model on the nonagricultural sector of each state, while Smith's model is tested on aggregate state data. Use of data on the nonagricultural sector of each state embodied the implicit assumption that capital and labor move only between states from one nonagricultural sector to another, and ignored the possibility of intersectoral factor movements. Smith avoided this potential problem by aggregating each state's output to a single sector. Thus, only interstate factor movements were relevant. In this paper, both intersectoral (within states) and interstate factor movements are considered. Factor movements affect the growth rate of a sector's capital-labor ratio, which determines the growth rate of the wage level.

A Comment on the Price Level in Classical Monetary Theory

Abstract: Laursen, S. and L.A. Metzler (1950) 'Flexible Exchange Rates and the Theory of Employment.' The Review of Economics and Statistics 32, 281-99 Melvin, J.R. (1968) 'Capital Flows and Employment Under Flexible Exchange Rates.' This JOURNAL 1, 318-33 Penner, R.G. (1962) 'The Inflow of Long-Term Capital and the Canadian Business Cycle 1950-1960.' Canadian Journal of Economics and Political Science 28, 527-42 Tsiang, S.C. (1961 ) 'The Role of Money in Trade-Balance Stability: Synthesis of the Elasticity and Absorption Appr-oaches.' American Economic Review 51, 912-36

The dynamics of price adjustment in regulated industries

Abstract: Actual rates of return to regulated firms that face systematic growth in demand, in factor prices and in technical productivity are rarely, if ever, precisely at the target rates set by regulatory agencies. If regulators make discrete price adjustments only after the firm's actual rate of return deviates from the target rate by some threshold amount, then during periods of strong wage growth, the actual returns are less than the target return on the average, and price increases are required at ever shortening intervals. If regulators make continuous price adjustments so as to minimize a quadratic penalty (disutility) function, then the firm's return may be consistently above or below the target rate.

The effect of resource investment programs on agricultural labor employment and farm numbers

Abstract: Investments in natural resources usually are for explain the rate of change in farm numbers. That is, the expressed purposes of conserving, developing, or farm number changes as well as changes in the managing the nation's supply of soil, water, timber, exogenous variables were measured as percentage minerals, and marine resources. Many public changes from a common temporal base. Using the investment programs in natural resources have also Tolley-Schrimper model, Eddleman [2] developed a contained explicit development objectives. Any model to explain the rate of change in employment. explanation of employment and income changes The general regional model used for this paper occurring within a region requires analysis of many consists of three basic types of components. 1 These interacting variables because the effects of natural are (1) product supplies and factor demands for all resource investments may be masked by firms in individual types of industries, (2) aggregate counteractions. product demand and factor supply functions, and (3) Changes in investment levels that shift the the number of firms in each industry. The theoretical supplies of critical resources often occur concurrently model was developed to examine temporal changes in with changes in the demands for products, supplies of employment as the result of changes in exogenous other resources, firm production possibilities, and the shifters that affect labor employment. Variables were number of firms. An important element is the selected that represent each type of shifter. consideration of how equilibration in product and The two-equation model used in this paper was factor markets is affected by programs designed to developed from the more general model to explain change the supplies of resources and, in turn, how simultaneously the absolute changes in both changes in product and factor prices affect the level agricultural employment and farm numbers. The first of output, resource employment and income within equation of the model expresses changes in the recipient region. Differences among regions also agricultural employment as a function of exogenous need to be considered. These differences could exist changes in product demand (agricultural product in either the resource base or industrial structure. price), factor price or prices of factors having Knowledge concerning the relationships between perfectly elastic supplies (agricultural wage rate), natural resource investment and the other important factor supply or shifters of the supply of factors stimuli and changes in employment is vital for any assumed to have other than perfectly elastic supply assessment of priorities among investment functions for the region (investments in education, alternatives. crop allotments, and projects of the Corps of Engineers, Soil Conservation Service, Agricultural