Trade, Stability, and Macroeconomics

Trade, Stability, and Macroeconomics

Essays in Honor of Lloyd A. Metzler

1st Edition - January 1, 1974

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  • Editors: George Horwich, Paul A. Samuelson
  • eBook ISBN: 9781483267487

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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

Product details

  • No. of pages: 576
  • Language: English
  • Copyright: © Academic Press 1974
  • Published: January 1, 1974
  • Imprint: Academic Press
  • eBook ISBN: 9781483267487

About the Editors

George Horwich

Paul A. Samuelson

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