Short-run Period Research Articles

A Revenue-Function Approach to the Measurement of Output-Substitution Possibilities in Agriculture

The purpose of this article is to calculate Hicksian and Marshallian estimates of output-substitution possibilities in an agricultural industry. The Hicksian elasticities or net substitution possibilities are measured within a revenue-maximizing framework holding input levels constant. The Marshallian elasticities that encompass both net substitution and expansion effects are measured within a profit-maximizing framework allowing both output and input levels to vary. The results are empirically reasonable and consistent with the duality theory for revenue and profit maximizing behavior. A notable empirical result is that, in the very short run or market period with input levels held constant, there exists considerable scope for changing the output composition between crops and cattle on cattle farms.

Dinorwig pumped-storage scheme

The Dinorwig scheme, which is one of the UK's largest construction projects, was designed with minimum impact on the environment. The station consists of 6 × 300 MW generators with the turbines capable of both generating and pumping. In addition, the units have the facility of spinning at no load, giving rapid response times between zero and full load. The flexibility of the plant enables it to be cost effective, replacing high-cost oil or low-efficiency coal plant, particularly for short-run periods

Fiscal Policy in a Small Open Economy with Unemployment and Capital Accumulation

A two-sector model of a small open economy with wage rigidities and a variable capital stock is presented in this paper. The short- and medium-run effects of government expenditure policies are analyzed, and the results are contrasted with those of previous models which either ignore investment or restrict it to the case of intersectoral reallocation of capital. I. Introduction Theoretical studies of the small open economy have tended to deal either with a short-run period in which the stock of capital in each sector of the economy is fixed while employment is variable, or with a period in which capital stocks can change but full employment is assumed to prevail. Several recent contributions, however, have analysed the behaviour of economies in which sectoral capital stocks can change whilst wage rigidities prevent the adjustment to full employment, adopting the position that medium term resource allocation will be substantially affected by rigidities stemming from the current distribution of income between capital and labour. Amongst these have been papers by Helpman (1976), Brecher (1978) and Kouri (1979, 1982). The only explicit analysis of the medium-run effects of fiscal policy is carried out by Helpman. He employs the Heckscher-Ohlin model of international trade theory which postulates that changes in sectoral capital stocks occur through the movement of physical capital between sectors. This assumption of intersectoral capital mobility is often considered by trade theorists as the long-run analogue to short-run models with sectorspecific capital, as in e.g. Mayer (1974), Mussa (1974), but the present

Federal Reserve Control of the Money Stock: Comment

IT IS WIDELY BELIEVED that the money stock of the United States, somehow defined, should play a central role in the conduct of Federal Reserve monetary policy. In particular, it is believed that the Federal Reserve should publicly announce a target time path for the money stock and then try to make the actual stock follow that path closely. The analytical basis for this approach to Federal Reserve policy, however, is seriously deficient. Unfortunately, moreover, debate about this approach seldom focuses on the important, controversial issues about which views can justifiably differ. Instead, the debate often becomes mired in confusion and false issues. One important source of confusion is an inadequate analysis of the operating procedures through which the Federal Reserve implements its policy from one short-run period to the next. A second source is a widespread misperception of the economic processes determining the money stock. Most noneconomists, and even many economists, seem to believe that the Federal Reserve can straightforwardly cause the money stock to follow a target path closely month by month provided only that the Federal Reserve conscientiously tries to do so. A third source of confusion is a poor understanding of the two-stage decision process implicit in the

The Behaviour of the Australian Forward Exchange Market

The efficiency of the Australian official forward exchange market is tested for the period September 1974 to June 1981. The results indicate that while the 90-days US dollar forward rate was an unbiased predictor of the future spot rate for the period as a whole, substantial differences between the two rates have been evident over prolonged short-run periods. Such evidence raises some important policy questions about the existing arrangements in the forward exchange market.

Destabilizing impacts of price and quantity adjustments to relative supply and demand

The static theories of the firm and household rest their practical validity on an assumption that disequilibrium conditions will rapidly be eliminated through price and quantity adjustments. This paper develops a model of stock management by producers to explore the time paths of production adjustment to disequilibrium. Model results suggest that typical corporate policies for responding to inventory and order backlog levels lead to continuing fluctuations in production and employment around equilibrium values. Moreover, fluctuations are acceptuated when price impacts on output and consumption decisions are included. Following Samuelson's Correspondence Principle, the results imply that equilibrium analyses for models containing equilibrium assumptions) have little explanatory power, especially over a short-run period of several years. Further, proper dynamic analysis requires comprehensive interrelating of stocks and flows, not merely incorporation of lagged adjustments to theoretical equilibrium conditions.

Use of Markov Processes in Predicting Dairy Farm Size Distribution Changes

During the past several decades, a number of research publications have used Markov chain processes to predict changes in number of farm firms, the average size of farms and labor resource productivity in farm production (Conneman, Harris and Wilson, Judge and Swanson, Kottke, Seyala, Willett and Saupe, Wysong and Seyala). The Markov method assumes that the pattern of change exhibited in the past will continue into the future. This method provides information on historical changes by frequency distribution categories as well as for the whole cohort, and allows for projection of these changes into the future. Previous studies have used mainly short-run periods of up to 5 years as the primary data base. This study has considered the use of longer-run base periods of 10 to 20 years combined with periodic updating of sample data in projecting long-term trends in numbers and sizes of dairy farms and revising such projections through time.

A Reply To Perrin and Kalinowski

I BELIEVE that most readers will easily see through Franklin Kalinowski's misstatement of the arguments in my article. For example, Kalinowski consistently restates my analysis as if it were made from a viewpoint of teleological determinism, which is a position I explicitly reject in the text. On the other hand his interpretation of ecological constraints is based on an implicit assumption of teleological determinism in that it assumes an ecological crisis is inevitable. I make it clear in an extended footnote that we are neither justified in assuming the inevitable failure of technology and political forces to solve the current ecological problems nor justified in assuming their inevitable success. Whether or not the problems will ultimately be solved is an empirical question which can only be answered in the future. At this point in time the choice between the optimistic and pessimistic views can only be made on normative grounds. The present available evidence does not logically entail acceptance of the pessimistic view for the short-run period with which my analysis is concerned. My analysis makes no conclusions about what will occur in the long run. Both ecological collapse and a successful proletarian revolution are possibilities, but neither is asserted as a certainty. One of my central points is that in the short run we are highly unlikely to see a successful proletarian revolution. In the meantime the radical cause is best served by efforts aimed at developing interim radical goals and strategies. This is beyond the scope of the present article, but it is a task on which many radicals are currently working. Ronald Perrin's comments explicitly assume that conditions are now ripe for a proletarian revolution. His conclusions are based on a different interpretation of Marxian thought than the one I used in the analysis of the New Left. The hidden premise in Perrin's argument is the assumption that only his interpretation of Marxian thought is correct. On the other hand I explicitly acknowledge that more than one interpretation is possible. That raises the question of whether Perrin's or my interpretation represents the The answer to that question is that I do not know, nobody else does, and it doesn't really matter anyway. Interpretations of are almost as numerous as interpretations of Christianity. Trying to determine the substance of the Marx is as fruitless a task as trying to determine the Plato, the Machiavelli, or the Rousseau. Because of the controversy surrounding all these figures, many scholars have spent decades trying to give the definitive word on their nature. Differences of opinion always remain, however, because it is necessary in each case to make basic assumptions about motivation, missing data, and conflicting data. There is always more than one plausible assumption which fits the data. Differences in these assumptions color the rest of the analysis. In the analyses of controversial thinkers this typically results in two or three plausible interpretations of their true nature and what they really mean to say. In the case of there is a holistic interpretation which sees a Hegelian and revolutionary theme throughout the writings, and there are dichotomous interpretations which either differentiate an early Hegelian from a later scientific or a democratic from a revolutionary Marx. Because the underlying data on is neither complete, especially in regard to motivations, nor free of conflict, it is impossible to give a definitive answer as to the nature of the An alternative approach to that of vainly searching for the Marx on which to base one's argument is to select one of the plausible interpretations which

On the prediction of consumer durable demand

This study examines how well the recent demand for various categories of consumer durables can be predicted for the short-run period. Two main types of model specification are computed. The first is based on traditional economic determinants, whereas the other uses new variables derived from surveys measuring households' financial expectations. It is found that this latter model explains and predicts the observed demand series as efficiently as the more popularly utilised type of equation. The rapid availability of expectations information renders this data potentially useful in generating short-term predictions of typically volatile demand series.

Evaluation of two contrasting types of screening programs

Two quite different approaches have been taken to the evaluation of screening programs in the Health Insurance Plan of New York (HIP). In one, a highly specific end result is at issue. The central question in this project is whether periodic screening with mammography and clinical examination of the breast results in a reduction in mortality from breast cancer in the female population. The project is being conducted as a randomized clinical trial with study and control groups selected from the enrolled population of HIP. Of 31,000 study group women contacted, 20,200, or 65% participated in at least one examination. The other study is concerned with whether the impact of a multiple array of services, automated multiphasic health testing, and follow-up paramedical and medical services, on health status and health care behavior is greater among the poor than the rest of the population. The results of the breast cancer study provide clear evidence that over the short run period of 5 years of follow-up, the study women have about one-third lower mortality from breast cancer than the controls. Reduction in breast cancer mortality was found at ages 50 and over but not at ages 40–49 years. In the multiphasic health testing study, preliminary analysis of the data confirms one of the initial assumptions of the study, i.e. that a significant gap exists between the poverty and nonpoverty groups in the occurrence of health problems. A higher proportion of the poverty group reported a health complaint or specific condition. The study indicated that this group was also likely to report these problems with greater frequency and greater severity of the complaints.

Further Evidence on Short-Run Results for New Issue Investors

In a recent article, Professors Stoll and Curley (hereinafter referred to as S–C) examined results for new issues during a short-run period and over long-run periods. The authors concluded that, “investors in new small issues floated under Regulation A in 1957, 1959, and 1963 experienced lower long-run rates of return than if they had invested in a portfolio of large stocks represented by the Standard and Poor's Industrial Average.” It was pointed out that these long-run results were consistent with the results of similar studies. Alternatively, regarding short-run results it was concluded that “ in the short run , the stocks in the sample showed a remarkable price appreciation.” In fact, “short-run price appreciation was, however, considerably greater than the index appreciation.” They refer to this short-run performance as “.… perhaps the most interesting and certainly the most puzzling phenomenon encountered in the study.”