Showing papers on "Purchasing power published in 1978"

To Feed This World: The Challenge and the Strategy

Abstract: A primary component of the solution to the world food problem is for poor countries to get crop and animal production up, and to do so on hundreds of millions of small farms. But production of food in itself is not enough. The hungry have no money, and until their purchasing power is increased, giving them access to food as well as other necessities, there can be no solution to the world food problem. It must be remembered that increasing agricultural productivity and prosperity in the countryside is not a panacea for the economic and social problems of a nation. But rural progress will be crucial to the general development of most nations. Those responsible nationally for establishing goals, allocating resources, and implementing programs of work must achieve a balance among the many competing demands upon national resources. For the first time in history the world now appears to have the capability of dealing effectively with the difficult problems of hunger and poverty. And, while the food--poverty--population problem is massive and complex and will be extremely difficult and time-consuming to resolve, the existence of new capabilities provides a magnificent opportunity, perhaps a fleeting one, to deal with it effectively -more » if governments have the wisdom and the will to act.« less

A Primer on Inflation

Abstract: Publisher Summary This chapter discusses the present state of knowledge about the phenomenon of inflation. It presents a definition of chronic inflation as a condition in which price increases of more than 20% per annum have been typical over an extended period. It turns out that only four countries—Argentina, Brazil, Chile, and Uruguay—meet that condition during the period since 1950. The close contenders are Iceland—with four consecutive years of inflation over 20% in 1973 through 1976—Paraguay with three years of over 20% inflation in 1954 through 1956, and Yugoslavia. There is a close relationship between the rate of inflation and the rate of increase in the money supply. The rate of monetary expansion tends, even in these chronic inflations, to be greater than the rate of increase of prices. If the amount of real purchasing power that is held in the form of cash is to increase through time, the money supply must rise more rapidly than the price level.

The Marketing Concept In The U.S. And The USSR: An Historical Analysis

Abstract: This paper traces the evolution of marketing thought in the United States and Russia and advances the argument that the marketing concept is not unique to free-market systems. Rather the acceptance and application of the marketing concept seems inevitable in any society which advances to the point where it has: (1) a high degree of specialization and division of labor in production, (2) a reward system based on generalized purchasing power, i.e., money, and (3) significant amounts of discretionary income in the hands of consumers.

Subsistence, Markets, and Rural Development in Hausaland

Abstract: For many years agricultural development in Africa has been impeded by the persistence of the subsistence economy as opposed to the exchange (or cash) economy model and the related assumption that African farmers conform to the subsistence model. In general, the subsistence economy model describes agricultural production in which individual, isolated farmers aim to support their immediate families as self-contained and self-sufficient entities with minimal contact with the outside world and little response to innovations and ideas. The model allows for only minimal market exchange, i.e., needed foodstuffs are sold cheaply to purchase farming tools or domestic utensils, a practice which usually results in low or exhausted food reserves and hence the purchase of supplemental foods at relatively high prices. Land is held communally, and agricultural specialization is almost completely absent. Increased food crop production is related not to price but rather to unusually favorable weather conditions and an increase in the size of the family. In the exchange economy model, on the other hand, most transactions for goods and services involve cash, and farmers presumably aim to produce, for sale, a surplus which is commonly for overseas markets and not for domestic consumption; the farm is structured like a firm, and monocropping for sale is expected. The subsistence versus the exchange economy dichotomy rests upon a more fundamental one concerning the basic rationale for exchange-that exchange is either substantive or formal. The substantivist interpretation is that exchange in traditional societies is governed by rules of reciprocity (obligatory gift-giving among friends and kinsmen) and redistribution (the reallocation of "tribute" in accordance with political principles). Profit is secondary, and the object of exchange is the maintenance of society itself. In substantive economies, the exchange system is essentially passive, having little or no effect on rural economic change. In the formalist interpretation, prices are determined by supply and demand, and profit maximization is the main objective of exchange. In formal economies, the exchange system is basically active, contributing directly to the wealth, prestige, and purchasing power of farmers.'

Accounting for business income under inflation: current issues and views in the united states*

Abstract: To adjust business accounting for inflation, one current proposal is to convert all dollar figures in existing financial statements to units of fixed general purchasing power. A widely offered alternative is to retain the dollar units but replace the historical-cost figures by current values. The two alternatives would yield very different results. After reviewing these and variant proposals, the analysis concentrates on certain major issues: the unit of measurement; the treatment of capital gains; the concept of capital maintenance; and the treatment of changes in the purchasing power of debt. Current value accounting would not correct for changes in the general price level and would involve far more difficult problems of concept and measurement than general purchasing power accounting. The latter is therefore preferable.

Distributional Aspects of Price Comparisons

Abstract: The distributional consequences of price changes and of government policy on the prices of consumer goods have received considerable attention in the press in the last few years. Not all unpopular price policies have caused the extremity of reaction which occurred in Poland in 1970 and June 1976. In both cases proposed food price increases caused political upheaval which in 1970 led to the resignation of Party Chief Gomulka. To be sure, these price increases, actual or proposed, had not only distributional consequences but also an effect on average purchasing power. However, in Poland in 1970, the policy package would have added only around 2 per cent to the official price index and included other sweeteners. Therefore, the distributional consequences were the dominating ones. Another example is the increase in the prices of fuel, electricity in particular, in 1975–76 in the UK. A great deal of concern was expressed on behalf of pensioners and other low-income groups — see National Consumer Council (1976) and Committee on Nationalised Industries (1976). Under pressure, the government in July 1976 decided to extend the means-tested benefits available to households eligible for Supplementary Benefit and Family Income Supplement to include fuel bills.

Impact of inflation on private pensions of retirees, 1970-74: findings from the retirement history study.

Abstract: Many private pension plans have provided benefit increases or other forms of protection against inflation to their retired workers in recent years. This article, based on panel data from the Retirement History Study, examines the extent to which completely retired persons in their sixties benefited from these increases from 1970 to 1974. The private pension benefits of retirees rose slightly during the period, but their purchasing power declined sharply on account of the considerable growth in the inflation rate. Social security benefits, on the other hand, rose substantially more than the consumer price index. As a result, total retirement benefits largely maintained or nearly maintained their purchasing power.

Source of Income as a Market Descriptor

Abstract: Major attention in both academic and corporate marketing research is devoted to measuring consumer markets either on an individual consumer basis or for geographic areas. Historically, the researcher first has examined demographic and socioeconomic variables as market descriptors. Income has been the most commonly used socioeconomic variable [4]. For items such as automobiles or major appliances, income measures ability to buy. For whiskeys, colognes, and other such items, income levels reflect life styles. Finally, the classic "Engels Laws" and subsequent income elasticity of demand measures typically are used to assess shifts in purchasing patterns over time. For many types of products, there appear to be wide variations in expenditure patterns across common levels of income [3]. In searching for improved market descriptors, researchers frequently turn to direct behavioral measures such as social class, personality, life styles, and family life cycle. Thus, variables are used that correlate with income but express life styles and need patterns relevant to certain products. Such variables, although of explanatory value, pose measurement difficulties. Multiple-item scales must be constructed, many of which are of questionable validity. Then the data may be only nominal or ordinally scaled. The author explores two indirect measures of income that have proved useful in jointly reflecting purchasing power and life style patterns-interest income and dividend income. The interest income variable provides several clues about family background [5]. Savings tend to increase

Development Aid From Voluntary Agencies to the Least Developed Countries

Abstract: The writer makes no apology for the fact that emphasis has been placed in this paper upon the problems of rural development to the neglect of urban and industrial questions. This arises partly from the fact that it is a truism that unless rural standards of living can be raised and an adequate purchasing power within the rural majority of the population of the recipient countries engendered, no sound home market can be established as the basic foundation for industrial development. But this emphasis is also attributable to the deep commitment of the voluntary agencies to the aleviation of rural poverty and to their special expertise at the grassroots level, and their sensitivity to the basic felt needs of rural people. It is this particular commitment that lies behind the present scepticism which exists within many of these non-govemmental organisations (NGOs) towards UN Country Programmes and procedures where they touch upon the rural scene and which is the subject of further discussion below.

The redistributional effects of the inflationary process in japan, 1955–75*

Abstract: It is often discussed that inflation introduces a substantial, arbitrary and regressive redistribution of income and wealth under even mild inflation. But after a quarter century of experience with inflation in postwar Japan, very little is known about these costs of inflation on an empirical basis. Due to the complexity of the evaluation of the redistributional impact on Japan, the present paper analyzes the effects of inflation on individuals or groups as wage earners, debtors and creditors, taxpayers, and holders of real estate. The main results of the present investigation suggest that the Japanese inflation for 1955–75 did not seem to introduce much inequality in the income (flow) account in the economy, but that the inequality between households has appeared more in the wealth (stock) account, especially between the house-owner groups and non-house-owner groups. These observations are mainly derived from the following investigations; (i) the wage lag hypothesis about inflation, even if not wrong, does not seem acceptable when applied to the entire period (1955–75) as well as to each of the five sub-periods; (ii) there has been a substantial transfer of real purchasing power from households to non-financial corporations, and, to a lesser extent, to government entities in the debtor-creditor redistribution; (iii) among households, the most substantial redistribution takes place from the non-houseowners to houseowners with land, because of the huge amount of capital gains from the rapid increase in the price of real estate relative to the prices of other assets or the consumer price index, except for the last three years of rampaging inflation.

Induced Adjustment and the Role of Agriculture in Economic Development: A Case Study of Egypt and Syria

Abstract: Publisher Summary The initial economic development of United Kingdom, the United States, and Japan began with the development of agriculture, which in due course provided the marketable agricultural surplus of raw materials for their industry and of food for their industrial workers, in addition to the purchasing power to their agriculturists for buying the industrial goods produced The realization of this historical role of agriculture in the process of modern economic development has not only made the development of agriculture a respectable initial strategy for developing an economy but has also made the reasons for the successful development of agriculture a matter of serious consideration This chapter explores the extent to which the experiences of the United States and Japan have been duplicated in the underdeveloped world The chapter presents a study of two countries in the Middle East, Egypt, and Syria, the former with a relative scarcity of land similar to Japan's and the latter with a relative abundance of land similar to the United States The idea of induced innovation is essentially an extension of the idea of factor substitution in response to changing factor prices (scarcity), when such a change does not only cause factor substitution given the production function; however, it also determines the choice of a new production function

Source of the Challenge

Abstract: The economic distance between nations can be measured in many ways. The most widely used and probably the most misleading of these measures is that of annual income or gross national product per head. On the one hand it exaggerates the gap between rich and poor nations, making one despair of ever seeing that gap close significantly, and on the other it diverts attention from the real and tragic differences between the lives of the poor and the rich. What meaning can be attached to the statement that the national income per capita in the United States is $5,000 while in India it is $100?1 Does it really mean that the average American citizen is fifty times better off than the average Indian? In one sense this is patently absurd. Merely to survive, to be able to buy enough basic food, clothing and shelter in the United States would cost over $1,000 while $100 would suffice for these in India, so that someone with $1,000 in America may be worse off than someone in India with $100. The fault lies in the fact that the international exchange rate between the Indian rupee and the American dollar does not reflect the domestic purchasing power of these currencies. In both of these nations foreign trade is a mere 5 per cent of total national product, yet only this tiny part affects directly the exchange rate.