Trade, Stability, and Macroeconomics - 1st Edition - ISBN: 9780123567505, 9781483267487

Trade, Stability, and Macroeconomics

1st Edition

Essays in Honor of Lloyd A. Metzler

Editors: George Horwich Paul A. Samuelson
eBook ISBN: 9781483267487
Imprint: Academic Press
Published Date: 1st January 1974
Page Count: 576
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Trade, Stability, and Macroeconomics: Essays in Honor of Lloyd A. Metzler provides information pertinent to the fundamental aspects of trade, stability, and macroeconomics. This book covers a variety of topics, including nontraded and intermediate commodities, prices, production, exchange rates, and wages. Organized into five parts encompassing 22 chapters, this book begins with an overview of the theory of international trade and the effect of a tariff or export tax on domestic prices. This text then defines the supply of the international commodities as a function of their prices and of the output of the domestic commodity. Other chapters consider the Stolper–Samuelson analysis of the effects of protection of the distribution of income. This book discusses as well the theory of external–internal balance or the assignment problem as related to macroeconomic policy in an open economy. The final chapter deals with the dynamic allocation of scarce resources. This book is a valuable resource for economists.

Table of Contents

List of Contributors


Part I International Trade Theory

The Metzler Tariff Paradox: Extensions to Nontraded and Intermediate Commodities


I. The Metzler Analysis in the Traditional Case

II. Nontraded Goods: The Home Country Reaction

III. Nontraded and Intermediate Goods: The Elasticity of the Foreign Offer Curve

IV. Concluding Remarks



The Transfer Problem Once Again

I. Introduction

II. General Formulation

III. The Case of Single-Valued Supply Functions: Some General Results

IV. The Case of Pure Exchange

V. The Transfer Problem with Production

Appendix A. The Three-Factor Case

Appendix B. The Effect of a Transfer on the Relative Prices of the Two Domestic Commodities

Appendix C. Classes of Utility Functions That Satisfy the Hypothesis of Neutral Tastes


The Welfare Economics of Reversed International Transfers


I. The Cobb-Douglas Utility Function

II. Reversed Transfer, Case 1: Transfer Specified in Domestic Product

III. Reversed Transfer, Case 2: Transfer Specified in Foreign Product

IV. Summary of Results

V. Time Preference and Reversed Transfers

VI. A Geometrical Explanation and Extension of the Results

Appendix I. Some Numerical Results

Appendix II. A Postscript


Some Problems of Stabilization Policy under Floating Exchange Rates

I. Introduction

II. Policy Considerations for a Single Country

III. The "n-1" Problem

IV. Conclusion


Devaluation and the Balance of Trade under Flexible Wages



I. A Macromodel of an Open Economy

II. The Component Markets

III. Devaluation

IV. Comparison and Synthesis

V. Summary and Conclusions


On the Analytical Framework of Tariffs and Trade Policy

I. Introduction

II. Basic Model

III. Domestic Distortions

IV. Nontraded Commodities


Part II Mathematical Economics

Stability Independent of Adjustment Speed

I. Introduction

II. Real Characteristic Roots of Products of Positive Diagonal and P-Matrices

III. Some Notes on Connected Sets

IV. Location of Characteristic Roots of Matrices

V. Constancy of the Inertia of a Matrix

VI. Conditions That DX and D Have the Same Number of Characteristic Roots with Zero Real Part

VII. A General Class of Matrices for Which the Inertia of DX Is Equal to That of D


A Class of Generalized Metzlerian Matrices


Hysteresis of Long-Run Equilibrium from Realistic Adjustment Costs

I. Introduction

II. Assumptions, Notation, Conclusions

III. Example 1

IV. Example 2

V. Example 3

VI. Final Remarks

Appendix A. Derivation of Optimal Trajectories for Individual Firm or Industry

Appendix B. Speculative Pricing


Stability in an Economy with Production

I. Production and Gross Substitutes

II. The Economy

III. Stabilizing Income Effects

IV. On an Arrow-Hahn Conjecture

V. The Leontief Model


Stability of Markets with Public Goods: A Case of Gross Substitutability


Marx as Mathematical Economist: Steady-State and Exponential Growth Equilibrium


I. Two Claims to Fame

II. Simple Reproduction

III. Balanced Expanding Reproduction

IV. A Digression on Morishima's Alternative to Marx

V. Marx as Advancer of Mainstream-Economics Analytical Technique

VI. Living in Marx's Skin: Numerical Examples Generalized

VII. Handling Marx's Underlying Technology

VIII. Indeterminacy of Wage and Distributive Shares?

IX. The Number One Issue in Appraising Karl Marx's Theoretical Innovations

X. Final Summing Up



Part III Inventory Fluctuations

Aggregate Inventory Behavior: A Critical Study of a Class of Models


I. The Basic Model

II. A More Complete Model

III. A Preliminary Test for Consistency

IV. Conclusion


Inventories and the Generalized Accelerator

I. Introduction

II. Data

III. Demand Forecasts

IV. Buffer Stocks

V. Materials and Supplies

VI. Conclusions

Appendix. Definition of Variables


Monetary Policy and the Inventory Cycle


I. The Model

II. Dynamic Properties of the Deterministic Model

III. The Optimal Simple Rule: Deterministic Case

IV. Stochastic Complications

V. Summary and Conclusions


Part IV Macromonetary Theory

IS-LM as a Dynamic Framework


I. The Hicksian IS-LM Analysis

II. Financial Underpinnings

III. Disequilibrium in the Financial Markets

IV. IS-LM Dynamics

V. Summary



The Dynamics of Interest Rate Adjustment in a Keynesian Macroeconomic Model


I. The Postulates, Nontâtonnement Dynamics, and Walras' Law

II. Structure of the Model

III. Comparative Statics, Stability, and Dynamics

IV. Summary

Appendix A. Walras' Law for Flows

Appendix B. Derivation of Equation (38)


The Theory of Money and Income Consistent with Orthodox Value Theory


I. The Theory of Money Consistent with Orthodox Value Theory

II. The Theory of Income Determination Consistent with Orthodox Value Theory

III. Conclusion


Monetary Theory and Economic Consolidations


Part V Growth

Money, Growth, and the Propensity to Save: An Iconoclastic View


I. Financial Structure and Monetary Policy

II. The Saving Function

III. A Harrod-Domar Growth Model with a Variable Propensity to Save

IV. Concluding Notes and Empirical Observations


Economic Growth and Stages of the Balance of Payments: A Theoretical Model


I. The Production, Consumption, and Trade Relationships

II. The Characteristics of the Steady State

III. The Dynamic Behavior of the System

IV. Conclusions

Appendix. Derivation of Time Paths of Net Holdings of Foreign Securities and the Capital Account


On the Dynamic Stability of Economic Growth: The Neoclassical Versus Keynesian Approaches

I. Introduction

II. Basic Assumptions of the Neoclassical Growth Theory

III. Dynamic Equilibrium of the Neoclassical Model

IV. The Neoclassical Theory of Monetary Growth

V. A Keynesian Theory of Economic Growth

VI. Keynesian Growth under Full Employment

VII. Concluding Remarks


Author Index


No. of pages:
© Academic Press 1974
Academic Press
eBook ISBN:

About the Editor

George Horwich

Paul A. Samuelson

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