Introduction The transformation function for two‐sector production models has been used extensively in the international trade and general equilibrium literature. It has been derived both graphically and mathematically from individual sector production functions that are assumed to be linearly...

According to independently developed hypotheses by Michael Darby (1975) and Martin Feldstein (1976) nominal interest rates will increase during an inflationary period by an amount which is greater than the expected rate of inflation. This occurs in order to compensate lenders for the expected...

During the 1984 political campaigns, the public was deluged by requests from candidates and campaign managers for contributions to aid in their quest for political victory. Many contributions come from private citizens who support the views of the candidate. Contributions also come from special...

In this paper we describe and explore a simple macroeconomy with a progressive income tax and with both ad valorem and unit taxes on commodities. Despite the prevalence of such taxes in real‐world economies, in most theoretical macroeconomic models, both static and dynamic, direct taxes are...

A firm is technically efficient when it produces the maximum level of output for a given level of input on the assumption that technology is fixed. Although the above definition of technical efficiency has been around for decades, economists have, for the most part, been estimating average...

A mainstay of conventional trade theory, the Heckscher‐Ohlin theorem, dates back to an article published in 1919 by the Swedish economist Eli Heckscher. Bertil Ohlin, a student of Heckscher's, developed the ideas in greater detail in 1933. A footnote in an article by Stolper and Samuelson...

Instability in the export proceeds of developing countries has been discussed and lamented for many years in the general literature on economic development. It is relatively recently, however, that detailed empirical research has been undertaken to illuminate the causes and effects of export...

Growing dissatisfaction with the record of discretionary monetary policy in the United States in the past decade has led to interest in alternative monetary arrangements to restore price level and real output stability, and to allow the economy to grow to its potential, unfettered by macro...

Many texts display circular indifference curves. The rationale for such curves typically requires that goods become bads — that is, their marginal utilities become negative — over some range (e.g., Baumol [1], p. 199). In this note we develop what seems to be a far more general and...

“Velocity of money is a ‘purely statistical concept’ of no causal significance, which varies automatically with changes in the quantity of money in relation to total expenditure,” as concluded in the late 1950s by the well‐known Radcliffe Committee in Great Britain (Kaldor, p. 19)....