Showing papers on "Purchasing power published in 1983"

Stable money and free-market currencies

Abstract: The assigned title of this paper suggests that my task is to survey proposals that the title brings to mind rather than devote the paper to a single one of them. Even if none of the proposed reforms ever is adopted, examining how they might work may promote progress in monetary theory. Some properties ofactual monetary systems are illuminated by contrasting them with imaginary systems. Our Preposterous Dollar On reflection, our existing monetary system must seem preposterous. It is not difficult to understand how individually plausible steps over years and centuries have brought us to where we now are, but the cumulative result remains preposterous nevertheless. Our unit of account—our pervasively used measure of value, analogous to units of weight and length—is whatever value supply and demand fleetingly accord to the dollar of fiat money. If balance between demand for and supply ofthis fiat medium of exchange is not maintained by clever manipulation of its nominal quantity at a stable equilibrium value of the money unit, then any correction ofthis supply-and-demand imbalance must occur through growth or shrinkage of the unit itself Money’s purchasing power— the general price level—must change. This change does not occur swiftly and smoothly. Money’s value must change, when it does, through a long-drawn-out, roundabout process involving millions of separately determined, though interdependent, prices and wage rates. Meanwhile, until the monetary disequilibrium has been finally cor

The level of world inequality: how much can one say?

Abstract: This paper constructs estimates of income and consumption inequality for the world (124 countries), using various measures of inequality. It then goes on to examine the possible effects of various sources of error in the estimates, and attempts to set rough limits to the size of such effects. Among the sources of error examined are purchasing power parities used for currency conversion, systematic errors in estimates of per capita incomes, differences in age structure, government tax and expenditure policy, and lifetime income effects. The paper concludes that, although the level of uncertainty in the estimates is too great to permit conclusions about, for instance, trends over time, it is clear that the level of world inequality is extreme, and that it is primarily due to differences in average incomes across countries rather than to intra-country inequality.

Economic Consequences of Military Spending

Abstract: The great success of the nuclear freeze referendum in the recent elections can fairly be interpreted as popular support for winding down military spending. At the same time, there obviously also exists an effective consensus in the United States for significant, sustained increases in military spending. An increase or decrease in military spending involves a shift among government programs or a transfer between public and private purchasing power. In all cases the changes will inevitably absorb some idle resources, bid others away from alternative uses, and leave idle yet others now in use. This is so because any economic activity requires a distinct combination of labor skills, of manufacturing and service sector infrastructure, of dependence on imports like specific minerals, and so on. Particular menus of public spending, coupled with implicit or explicit industrial and trade policies, have a direct impact on such aspects of the "quality" of life as the amount and types of work that need to be done and the nature of educational and training requirements. Even in the absence of deliberate long-term economic policy, the structure of our economy will change in the future as it has in the past. During this century the composition of the American labor force has shifted, individual sectors have grown and declined, and the importance and composition of trade have changed with the transition from agriculture to

The New Deal Farm Programs: What They Were and Why They Survived

Abstract: Fifty years ago President Franklin D. Roosevelt asked the Congress to pass legislation that would "increase the purchasing power of our farmers and the consumption of articles manufactured in our industrial communities." He said: "I tell you frankly that it is a new and untrod path, but I tell you with equal frankness that an unprecedented condition calls for the trial of new means to rescue

Real Product and Price Comparisons for Latin America and Other World Countries

Abstract: Latin American prices and purchasing power parity (PPP) comparisons with the United States, with Europe, and with other developing countries are undertaken in this article. While comparing Latin American price structures and the purchasing power of its currencies with those of the rest of the world, estimates of gross domestic product in real terms are derived for the Latin American countries. These are then compared with the U.S. real GDP and with those of countries in Europe, Asia, and Africa. This is done using the results of an effort by ECIEL to undertake such comparisons in Latin America;' and by the U.N., the World Bank, and the University of Pennsylvania to compare these concepts for a set of developed and developing countries in different regions of the world.2 During the early stages of the latter project (ICP), an understanding was reached with Brookings and the corresponding ECIEL project by which the results of the world comparisons and of the Latin American comparisons could be linked. This was accomplished by joint work on the U.S.-Colombia comparisons, which were included in the ICP project, and its use as a bridge for comparing the rest of Latin America to the United States. Apart from this collaboration, the two studies were conducted independently. The methodologies followed were quite similar though. The comparisons in this article refer only to total gross domestic product and its main components: private consumption, public consumption, and investment. Both the prices and purchasing power for total gross domestic product are considered, and their structure at the level of these three categories is explored. From the intercountry GDP purchasing powers, the PPP rates are calculated. The same exer-

Equity And Energy: Rising Energy Prices And The Living Standards Of Lower Income Americans

Abstract: Arguing that the energy price policies of the 1970s represented a major equity/efficiency trade-off and led to a deterioration in the living standard of lower income households, the authors present a data-based assessment of the plight of these households from 1973-83. After a general review of the recessionary and inflationary impact of rising energy prices on the national economy, they assess three trends with adverse effects on lower income households: the rising share of energy expenditures as a percentage of household income and the failure of income transfer programs to offset losses in purchasing power; the rapid increase in energy-related operating costs and the decline in housing quality; the rapid increase in energy-related operating costs of local governments which led to a cutback in serivces and a shift toward regressive taxes. The authors conclude that the need for effective policy responses is greater now than in the first decade of the energy crisis. 246 references, 35 figures, 48 tables.

A note on money and the consumer in Eastern Europe

Abstract: IT is usually said that in centrally planned economies, consumer goods, unlike means of production moving within the state sector, are real commodities and subject to market rules. This view was held both by Stalin in his Ekonomicheskie problemy sotsializma v SSSR and by Brus in his Og6lne problemy. . . . Brus added that money plays an active role on the labour market and the consumer goods market under the centralized model, while its role is passive in inter-enterprise relations. He allows for rationing, for prices at which supply cannot meet demand, and consequently also for shortages and special shops for privileged groups. At the same time he stresses that these phenomena are not inherent in the centralized model. Whether or not that is the case will not be considered here. What we wish to stress is that there are significant differences in the relative role of bureaucratic distribution and of money flows in the sphere of consumption among East European planned economies. In some CMEA countries the role of money is quite restricted, while in others money has a relatively active role in the allocation of consumer goods.2 In Eastern Europe there are two groups among the items of consumption partly or fully excluded from free distribution according to consumer's preferences and purchasing power. The reasoning concerning one group is just the opposite of that concerning the other. Housing and holiday accommodation (except abroad) are allocated administratively according to non-market preferences, with the justification that they are of prime importance for each member of the community.3 On the other hand, the possession of cars and summer cottages and tourism abroad (in some countries to the West only) are considered luxuries, in the sense that one can live without them, and access to them is limited to a minority of the population and is also allocated administratively (or semiadministratively).

Food Stamps as Money and Income

Abstract: Food Stamps represent nearly $11 billion of personal income in the United States. The coupons that are issued to represent the purchasing power available to recipients are also reserves for the commercial banking system.This study asks how closely these coupons are substitutable for what is usually considered as money, and how well Food Stamps function as a fiscal stabilizer (whether they increase consumption more than does ordinary income). The results, based on estimates for 1959-1981, suggest that Food Stamp coupons are perfectly substitutable for Ml, and a revised money-supply series including "Food Stamp Money" is included in an Appendix. Estimates of consumption functions indicate that the MPC out of income in the form of Food Stamps is higher than that out of ordinary income. Taken together, the results suggest that the Food Stamp program is an automatic fiscal and monetary stabilizer -- under its provisions, both the money stock and disposable income are increased during a recession.

Personnel-Related Management Tools in Municipal Administration

Abstract: For public organizations, municipalities in particular, the issue of personnel costs has taken on more significance as administrators are faced with diminishing sources of revenue and an overall loss in purchasing power. Public managers must therefore face the challenge of this new era of government and develop appropriate strategies for effectively utilizing their human resources. One such set of strategies is the use of formal management tools.

A comparison of pound sterling‐australian dollar purchasing power parities for selected population sub‐groups in australia and the united kingdom1

Abstract: This paper utilizes Household Expenditure Survey and Consumer Price Index data supplemented by private survey data in an attempt to compare the purchasing power parities of the pound sterling and the Australian dollar for a range of population sub-groups in the United Kingdom and Australia. In spite of the close political, economic, social and cultural ties that exist between these two countries, there have been no attempts to measure differences in living costs and real expenditures. Further, Australia has not been a party to the International Comparisons project of the Statistical Office of the United Nations. This study derives purchasing power parities which explicitly account for variations in expenditure patterns of different population sub-groups. For example, a household living in London intending to move to Sydney will find it useful to have a comparison of cost-of-living between households living in these two cities which takes into account explicitly the general expenditure patterns in these two cities. Due to the nature of the data, it was necessary to employ a new index number method derived by one of the authors.

Private funds for highway improvements (abridgment)

Abstract: Public works finance has become a topic of increasing concern to officials at all levels of government. Fiscal restraint has become a national objective that has severely affected the ability of government to finance improvements from tax revenues. A review of the expenditures for highway projects indicates that increases in construction and maintenence costs have substantially diminished the purchasing power of current funding levels. There is general agreement that current funds from traditional sources are much less than the amount needed to even preserve existing performance levels in the future. One potential source of new or additional funds for highway improvements is the private sector. A number of techniques have been employed, primarily by local governments, to obtain private financial assistance for highway projects. These techniques and their success in securing private funds have varied widely. Several approaches are linked to land use regulation and the approval process for new development. Other mechanisms are based on innovative tax proposals. A brief description is provided of a number of examples of the use of private funds for highway improvements. A preliminary evaluation of techniques to obtain private funds indicates that incentive zoning, special-benefit assessments, and dedicated property taxes may offer the greatest potential for widespread application. Obstacles to the wider use of private funds may include legal restrictions and the financial burden imposed on developers. Several conclusions on the current status of private funding of highway improvements are offered. Although it is clear that a significant volume of private participation already occurs, there is little or no attempt to account for it. Thus, it is difficult to estimate the contribution that private funding can make to highway finance. The strength of the development market is a key factor in the private sector's willingness to pay for public works improvements. More research is needed to identify the opportunities for increased use of private funding sources in the future. (Author)

Allocating nuclear power plant costs over time

Abstract: The nuclear generating plants coming into service in the 1980s have book values amounting to several billion dollars, doubling the rate bases of the owner utilities in some instances. The impact that this is producing on electric rates is of concern to consumers, regulators, and utilities alike. A review of the basic nature of a productive asset, the purpose of depreciation accounting, and the composition of interest rates leads to a method of constructing capital-recovery schedules which has come to be termed economic depreciation. This methodology departs from conventional methodology only in that it accepts inflation as a fact of life. This article indicates that application of the procedure to an actual nuclear reactor provides benefits for all classes of ratepayers in that initial capital-recovery costs to ratepayers are substantially lower and, in terms of dollars of constant purchasing power, the total amount paid by customers for return on investment is substantially the same. For the utility, whereas initial capital recovery is lower, total capital recovery is somewhat greater, and the utility is no worse off if it must raise some working capital in the capital markets. 6 references, 4 figures, 2 tables.

Equalizing regional cost differences in the distribution of state education aid

Abstract: State education aid plans do not ensure attainment of horizontal equality defined as equal real purchasing power across regional districts. Adjustment is proposed primarily for demand factors with supply factors completely ignored. This paper focuses on the feasibility of adopting a real resource standard, specifically (1) how to define and quantify differences in real purchasing power, (2) how to incorporate these regional differences into a state aid plan, and (3) what to expect as the necessary aid adjustment. The measure of real resource inequality is limited here to regional differences in the supply price of teacher services in Wisconsin. The transformation of an education aid formula to incorporate these differences does, however, generalize to all general education aid programs. The adjustment of state the to account for regional differences in supply prices would lead to greater state aid for suburban and intermediate-size units relative to aid adjustment for urban and rural units. The aid adjustment for selected districts in Wisconsin is presented.

The Implications of the California Coastal Commissions for the Effective Implementation of Regulatory Policy

Abstract: The 20th century has witnessed a vast expansion of governmental activity designed to correct market deficiencies in the areas of environmental and consumer protection, worker safety, and racial discrimination through the creation of agencies charged with regulating A’s behavior in order to minimize his adverse effects on B. This growth of governmental regulation in the United States has been repeatedly criticized for its adverse effects on the freedom of regulated groups, the efficient allocation of resources, and the purchasing power of lower- and moderate-income people (through raising consumer prices).

Inflation and Labour

Abstract: Inflation can be defined as a situation in the economy where the volume of money purchasing power persistently exceeds the supply of goods and services, inducing a continuous rise in the price level and a consequent decline in the value of money. In the context of different economic systems, it is useful to make distinctions between different types of inflation.

A Different Perspective of Pakistan's Economy: The Structure of Expenditures and Prices, 1975-81

Abstract: This paper presents comparisons of the purchasing power of the Pakistani rupee in 1975 with those of the currency units of 33 other countries in the same year, based on the UN International Comparison Project and examines relative price structure in Pakistan compared to those in other countries Pakistan's price level and structure are similar to those of many developing countries, although the prices of investment goods were unusually high The paper also updates the results to 1982 and finds that the decline in the purchasing power of the rupee is fairly consistent with relative inflation rates