H. S. Houthakker

Embracing finance, economics, operations research, and computers, this book applies modern techniques of analysis and computation to find combinations of securities that best meet the needs of private or institutional investors.

Professor Samuelson's approach' has proved to be a useful basis for deriving a considerable part of the static theory of consumer's choice. Its exisLing versions are not sufficient, however, to determine whether or not consumer's preferences can be described by a utility function of the customary type (the problem of integrability),2 except in the unrealistic case of two commodities. In this note Samuelson's fundamental hypothesis will be generalised so as to imply integrability while continuing to satisfy the methodological requirements of the revealed preference approach and without losing its plausibility. An attempt will be made to stress the logical, as distinct from the technically mathematical, aspects of the subtle problem of integrability, and to assess its importance.

FEW DATES in the history of econometrics are more significant than 1857. In that year Ernst Engel (1821-1896) published a study on the conditions of production and consumption in the Kingdom of Saxony [6], in which he formulated an empirical law concerning the relation between income and expenditure on food. Engel's law, as it has since become known, states that the proportion of income spent on food declines as income rises. Its original statement was mainly based on an examination of about two hundred budgets of Belgian laborers collected by Ducp6tiaux. Since that date the law has been found to hold in many other budget surveys; similar laws have also been formulated for other items of expenditture. With the formulation of Engel's law an important branch of econometrics took its start, though it was not until our days that consumption research was placed on a sound theoretical and statistical basis. It is proper that in this centennial year econometricians should pay tribute tzo one of their most illustrious precursors. His successful attempt to derive meaningful regularities from seemingly arbitrary observations will always be an inspiring example to the profession, the more so because in his day economic theory and statistical techniques were of little assistance in such an attempt. There can, I think, be no more fitting tribute to this enlightened empiricist than a further inquiry into the subject to which he devoted much of his life's work. There is no need to go into details of Engel's analysis and of the developments that preceded it, for these matters have recently been discussed in the scholarly article by Stigler [13]. It should be enough to note that Engel was mainly influenced by two of his older contemporaries. One was the French engineer Fred6ric Le Play, who had collected budgets from households all over Europe, mostly, it seems, from humanitarian interest. Engel had been Le Play's student at the Ecole des Mines in Paris. The other main influence was the Belgian statistician Qu6telet, who was a firm propoinent of the idea that human characteristics, at least in the average, were governed by laws as definiite as those which govern

Journal Article The Pareto Distribution and the Cobb-Douglas Production Function in Activity Analysis Get access H. S. Houthakker H. S. Houthakker Stanford, California Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 23, Issue 1, 1955, Pages 27–31, https://doi.org/10.2307/2296148 Published: 01 April 1955

American Journal of Agricultural EconomicsVolume 56, Issue 2 p. 412-418 Proceedings Papers Winter Meeting of the American Agricultural Economics Association with Allied Social Science Associations New York, December 27–30, 1973 Dynamic Demand Analyses for Gasoline and Residential Electricity H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this authorPhilip K. Verleger Jr., Philip K. Verleger Jr. Data Resources, Inc.Search for more papers by this authorDennis P. Sheehan, Dennis P. Sheehan Data Resources, Inc.Search for more papers by this author H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this authorPhilip K. Verleger Jr., Philip K. Verleger Jr. Data Resources, Inc.Search for more papers by this authorDennis P. Sheehan, Dennis P. Sheehan Data Resources, Inc.Search for more papers by this author First published: 01 May 1974 https://doi.org/10.2307/1238776Citations: 135AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume56, Issue2May 1974Pages 412-418 RelatedInformation

Compensated Changes in Quantities and Qualities Consumed Get access H. S. Houthakker H. S. Houthakker Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 19, Issue 3, 1952, Pages 155–164, https://doi.org/10.2307/2296018 Published: 01 January 1952

Journal Article The Effects of Rationing on Demand Elasticities Get access James Tobie, James Tobie Cambridge Search for other works by this author on: Oxford Academic Google Scholar H. S. Houthakker H. S. Houthakker Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Review of Economic Studies, Volume 18, Issue 3, 1950, Pages 140–153, https://doi.org/10.2307/2295974 Published: 01 September 1950

Journal Article Electricity Tariffs in Theory and Practice Get access H. S. Houthakker H. S. Houthakker Department of Applied Economics, University of Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 61, Issue 241, 1 March 1951, Pages 1–25, https://doi.org/10.2307/2226608 Published: 01 March 1951

KyklosVolume 9, Issue 2 p. 181-189 ECONOMICS AND BIOLOGY: SPECIALIZATION AND SPECIATION* H. S. Houthakker, H. S. Houthakker Stanford University (U. S. A.)Search for more papers by this author H. S. Houthakker, H. S. Houthakker Stanford University (U. S. A.)Search for more papers by this author First published: May 1956 https://doi.org/10.1111/j.1467-6435.1956.tb02717.xCitations: 70 † *Text of a lecture given at the University of Tokyo, August 1955. Research done at Stanford University under Contract N6onr-25133 with the Office of Naval Research. I am indebted to my colleagues, Melvin Reder and Tibor Scitovsky, for useful comments. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Citing Literature Volume9, Issue2May 1956Pages 181-189 RelatedInformation

The Organization for Economic Co-operation and Development (OECD) countries have experienced slower economic growth and periods of discontinuity in the energy market since the 1973-74 oil embargo. A review of this phenomenon examines changes in the market during the 1960s and 70s, linkages between oil prices and economic performance, and appropriate policy responses. When price elasticities are calculated over time, recent US economic behavior appears to have both historical and cross-sountry consistency. Little flexibility is seen in the available energy-using technologies for producing goods and services, while energy-using capital has been sluggish. Dr. Nordhaus advocates high oil price and high tax policies as the best way to limit demand without slowing economic growth. (DCK)

The following is a report on various attempts to update and improve an earlier analysis of residential electricity demand (Houthakker, Verleger, and Sheehan, 1974-hereafter referred to as HVS). To understand what is new the reader should first know what has been maintained, namely: the logarithmic flow-adjustment model which estimates this year's consumption from last year's consumption, this year's price and income, and possibly (though not in HVS) from other variables, the pooling of annual time series for 48 states using the error component approach of Balestra & Nerlove, the use of a "marginal price" for electricity. The present paper may be regarded as a verification of the first of these hypotheses, and to some extent of the other two.

IN the current debate on the financing of education, estimates of the money benefits which school attendance confers on ex-students are occasionally invoked. In an effort to shed some further light on this subject, this note presents some crude and limited calculations on the relation between education and income. The approach to the estimation of life-time income chosen here is the so-called crosssectional one, which involves the analysis of incomes received by people of different ages and educational histories during a single year. Relevant data are available from the I950 Census of Population,' which tabulates total money incomes received in I949 by a 3 /3 per cent sample of the population aged I4 and over. Only males, irrespective of color, are considered in this paper.la The principal difficulty raised by this source of information 2 is that mean incomes are not stated; the table only gives the frequency distribution and the median for each educationage group. The median is clearly not the appropriate type of average for the present purpose; since the distributions are all positively skew, it is uniformly less than the (estimated) mean. Moreover the ratio of mean to median is larger at higher levels of education, indicating that the distribution is more unequal there than at lower levels. Hence a calculation based on medians would not even give the right proportions between life-time incomes for varying school attendance. It was consequently necessary to estimate the mean incomes. For every income group (irrespective of age and education) a representative income was selected by inspection of the income distribution.3 The figures used were as follows:

IT IS GRATIFYING that my paper on Additive Preferences has been the occasion for the preceding note by Samuelson, and also for an independent comment by W. M. Gorman which with characteristic modesty he has withdrawn from publication because its results were similar to Samuelson's. These admirable contributions do not call for extended comment on my part.' I take the opportunity, however, to answer an open question raised by Samuelson.2 This question concerns the existence of a nontrivial self-dual preference ordering, that is a preference ordering with a direct utility function that can be written in the same mathematical form as the corresponding indirect utility function. Writing x for the vector of quantities and y for the vector of prices (each divided by income),3 while 4 and ,G, denote a direct and indirect utility function respectively, a preference ordering is self-dual if it has a +(x) that is the same kind of function of x as at least one jGr(y) is of y. If so, the demand functions x=f(y) and the inverse demand functions y=g(x) must also have the same form. More precisely, there must be a function F such that x=F(y, A) and y=F(x, B), where A and B are sets of m parameters;4 note that Fis a single function, not a class of functions involving arbitrary parameters. Substituting the expression for y into that for x we get the functional equation

Abstract This book puts economics to work on the daily problems faced by investors, traders, speculators, and brokers as they wrestle with increasingly diverse and complex financial markets. Drawing mainly on data direct from the financial behavior of households, corporations, and governments in the USA, the authors show how accessible but rigorous economics can help in making sense of the financial markets (including those in equities, bonds, mutual funds, options, and futures) and of the ways in which these markets are organized. The authors contend that many of the approaches that might seem random or counter‐intuitive at first sight are in fact rational and often predictable responses to events – but they also find that real markets stray from the rational economic path – financial markets make mistakes, and inefficiencies do exist. When they do, unique profit opportunities arise that the authors demonstrate throughout the book. The book differs from many works on financial markets in that it provides a systematic framework for analyzing the impact of events on security prices and trading volumes; explains how the value of a firm's assets and dividend flow will influence the prices of its securities; provides the tools to identify and manage different types of risk; discusses what protection investors can expect from financial market regulators and what happens when a clique tries to squeeze or corner a market; includes a detailed treatment of futures and their role at the core of today's financial markets, and explains why they should be of concern to more and more investors and traders; shows how to use modern corporate strategy tools in security analysis; and shows how to discover inefficiencies in financial markets and profit from them. By bringing together information on the institutional details of financial markets with the concepts and tools of economic theory, the book will be of value to practitioners and students of financial markets alike.

The Analysis of Family Budgets. By S. J. Prais and H. S. Houthakker. Second Impression, Abridged. C.U.P., 1971. xxix, 199 p. 914″. £3. (University of Cambridge, Department of Applied Economics, Monograph 4.)

The linear transportation problem consists in finding a pattern of shipments between m origins with given surpluses and n destinations with given deficits such that the total cost of transportation is minimized. The method of solution proposed here is iterative and will lead to the optimum in a finite number of steps. It involves finding a good first approximation by simple inspection and improving it by successive adjustments. The earlier stages of the proposed method are less laborious than the simplex method, but the latter has the advantage when the adjustments become more complicated. The proposed method may therefore be used as a starting approach to be followed by the simplex method if the optimum is not reached with simple adjustments only. Operations Research, ISSN 0030-364X, was published as Journal of the Operations Research Society of America from 1952 to 1955 under ISSN 0096-3984.

Journal Article Estimates of the Free Demand for Rationed Foodstuffs Get access H. S. Houthakker, H. S. Houthakker Department of Applied Economics, Cambridge Search for other works by this author on: Oxford Academic Google Scholar James Tobin James Tobin Department of Applied Economics, Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 62, Issue 245, 1 March 1952, Pages 103–118, https://doi.org/10.2307/2227176 Published: 01 March 1952

For the analysis of economic development, the principal question concerning savings is whether or not savings increase more than proportionately to income. In virtually all theories of growth, capital formation plays some part, and it is therefore important to know how it can be financed. The question is crucial for those theories — now somewhat discredited — which regard capital formation as the primary means of raising income levels, because suitable variations in the savings-income ratio are then needed to explain why some countries stay poor in the absence of foreign investment. Theories of the latter variety would be left hanging in mid-air if the savings-income ratio did not vary significantly among countries or in the long run.

An Engel curve describes how a consumer’s purchases of a good like food varies as the consumer’s total resources such as income or total expenditures vary. Engel curves may also depend on demographic variables and other consumer characteristics. A good’s Engel curve determines its income elasticity, and hence whether the good is an inferior, normal, or luxury good. Empirical Engel curves are close to linear for some goods, and highly nonlinear for others. Engel curves are used for equivalence scale calculations and related welfare comparisons, and determine properties of demand systems such as aggregability and rank.

Introduction The Place of Financial Markets in the Economy The Supply of Securities The Demand for Securities Stock Trading and Market Efficiency The determination of Equity Prices Security Analysis Options on Option Pricing Futures Contracts and Futures Markets Regulation of Financial markets Future Prices

Preliminaries.- and Overview.- Demand Theory Under Review.- Quantile Regression: A Robust Alternative to Least Squares.- Analyses of Data from BLS Consumer Expenditure Surveys.- Description of Data Used from the Ongoing BLS Consumer Expenditure Surveys.- Stability of U.S. Consumption Expenditure Patterns: 1996-1999.- Price and Income Elasticities Estimated from BLS Consumer Expenditure Surveys and ACCRA Price Data: Some Preliminary Results.- Estimation of Theoretically Plausible Demand Functions from U.S. Consumer Expenditure Survey Data.- An Additive Double-Logarithmic Consumer Demand System.- Quantile Regression Analysis of Asymmetrically Distributed Residuals.- CES Panel Dynamics: A Discrete-Time Flow-Adjustment Model.- Engel Curves for 29 Categories of CES Expenditure.- Summary of Cross-Sectional Results.- Analysis of Time-Series Data from National Income and Product Accounts.- Analysis of Time-Series Data on Personal Consumption Expenditures from the U.S. National Income and Product Accounts.- Quarterly PCE Models.- Annual PCE Models.- Discussion of the Time-Series Results.- Comparison of Time-Series and Cross-Sectional Elasticities.- Overall Assessment of CES and PCE Elasticities.- The Dynamics of Personal Saving.- Miscellaneous Studies of Income Distribution and Weak Axiom of Revealed Preference.- The Stationarity of Consumer Preferences: Evidence from Twenty Countries.- Notes on Thick-Tailed Distributions of Wealth.- Conic Distributions of Earned Incomes.- Final Evaluation.

(1953). Electronic Computation in Economic Statistics. Journal of the American Statistical Association: Vol. 48, No. 263, pp. 414-428.

Journal Article Grondslagen en Techniek van de Marktanalyse Get access Orondslagen en Techniek van de Marlctanalyse. By P. J. VERDOORN. (Leiden : Bedrijfseconomische Monographieen, Deel XVI, 1950. Pp. xi + 667.) H. S. Houthakker H. S. Houthakker Department of Applied Economics, Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 61, Issue 243, 1 September 1951, Pages 610–611, https://doi.org/10.2307/2226501 Published: 01 September 1951

This article owes its inspiration to one of Tinbergen’s most original contributions to economic theory [9], in which he endeavours to derive the distribution of labour incomes from the choice of occupation by individuals. This is also the aim of the present paper, which, however, uses somewhat different techniques of analysis and has a more limited scope. Whereas Tinbergen relied heavily of the differential calculus, I use mostly linear inequalities and integration in order to take account of the fact that most individuals have only one job at a time and to permit analysis of what has become known as a ‘continuum of traders’. Unlike Tinbergen, moreover, I shall not consider individuals’ non-monetary preferences concerning different types of work.

This chapter presents some of the contributions made by the economists to the logic of preference and choice that appear worthy of the attention of philosophers. The term preference refers to certain features of a person's state of mind and the term choice refers to a person's overt act of a certain type. Preference is a potential choice. The chapter discusses the interpretation of the axiomatics of preference and choice in the economics of consumer demand. The problem is to find a theoretical framework for the analysis of consumers' expenditure. Such a framework should be formulated in terms of the data to which the theory is applied. In the case of consumer demand, these data are observations on the prices and quantities of various commodities. The main purpose of the theoretical framework is to translate propositions about preferences into propositions about prices and quantities. The theory refers mostly to a single individual even though the applications of ultimate interest are to the aggregate behavior of large groups of people.

Journal Article National Incomes and International Trade: a quantitative Analysis Get access National Incomes and International Trade: a quantitative Analysis. By H. Neisser and F. Modigliani. (Urbana, Illinois: University of Illinois Press, 1953. Pp. 396. $7.50.) H. S. Houthakker H. S. Houthakker Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 65, Issue 260, 1 December 1955, Pages 674–676, https://doi.org/10.2307/2227939 Published: 01 December 1955

Au cours de ces derni?res ann?es, M. HOUTHAKKER a fait principalement porter ses recherches sur les ph?nom?nes de consommation et plus particuli?rement sur les courbes d'Engel exprimant les rapports entre la demande et le revenu. Dans les pages qui suivent, l'auteur proc?de ? l'analyse des circonstances gouvernant l'apparition ou la disparition des divers biens parmi ceux qui entrent dans la composition des budgets individuels. Cette ?tude, ? la fois g?n?rale et cependant tr?s r?aliste, constitue manifestement une ?tape importante vers une meilleure connaissance des courbes d'Engel. Tout en permettant de pousser plus avant la solution du probl?me, le choix d'une forme quadratique ne risque pas, ? notre avis, de nuire ? la g?n?ralit? de la pr?sentation. C'est ? des pr?occupations assez voisines que nous avons ob?i en r?digeant notre propre ?tude, puisque nous avons tent? d'y expliquer aussi l'apparition de nouveaux biens r?pondant ? des niveaux d'existence croissants ; mais ? la diff?rence de M. HOUTHAKKER, nous y avons consid?r? des groupes de biens et non des biens particuliers. Ces deux m?thodes, loin de s'exclure, doivent, nous semble-t-il, se compl?ter pour approfondir nos vues en mati?re de consommation. R. R.

Since the Pennsylvania oil rush of 1859, petroleum has quickly become the dominant fuel of industrial society. The “Peak Oil” debate focused on whether or not there was an impending production crunch of cheap oil, and whilst there have been no shortages across the globe, a shift from conventional to unconventional oil liquids has occurred. One aspect of this shift was not fully explored in previous discussions–although of some importance in a low-carbon energy transition context: the extent to which the net-energy supply of oil products is affected by the use of lower quality energy sources. To fill this gap, this paper incorporates standard EROI (energy-return-on-investment) estimates and dynamic decline functions in the GlobalShift all-liquids bottom-up model on a global scale. We determine the energy necessary for the production of oil liquids (including direct and indirect energy costs) to represent today 15.5% of the energy production of oil liquids, and growing at an exponential rate: by 2050, a proportion equivalent to half of the gross energy output will be engulfed in its own production. Our findings thus question the feasibility of a global and fast low-carbon energy transition. We therefore suggest an urgent return of the peak oil debate, but including net-energy issues and avoiding a narrow focus on ‘peak supply’ vs ‘peak demand’.

AbstractIt is well known that Charles Darwin's work on evolution, according to his own statement, was partly inspired by Malthus' theory of population. To this extent economics may therefore count itself among the sources of modern biology. Apart from this initial link, however, economics has had less contact with biology than with almost any other major science. With the physical sciences, particularly classical mechanics and thermodynamics, economics at least has some conscious affinity of method, and with the social sciences it shares the subject matter (though little else), but with biology it appears to have nothing in common. It would be presumptuous for an economist to argue that closer relations between economics and biology would benefit the other field. All I want to point out here is that economists may derive some useful insight from observation of the non-human living world. This is particularly true for that much-neglected but centrally important chapter of economics: the division of labor, or specialization as it may be more appropriately called in the present context. Specialization, as we shall see, is closely, connected with what biologists call speciation, or the formation of species…

Abstract Purchasing power parity (PPP) is re-examined in models with trade impediments and intermediate products that are not traded. A distinction is made between ‘local consumption PPP’ and ‘total consumption PPP’. These are tested on several data sets, with largely negative results.

Abstract Most financial markets are highly competitive – there are hundreds or thousands of active traders and at any time and place prices vary only within a narrow range – the bid‐ask price spread. Regulation is usually associated with monopoly; it might seem, therefore, that regulation of financial markets is unnecessary. After an introductory section on the ethics of finance and the economic function of financial markets, the second section of this chapter explains why that conclusion is unwarranted. The third section discusses the various levels of US federal regulation (the exchanges, the regulatory commissions and the courts); the fourth looks at federal regulation of trading in corporate shares and bonds by the Securities and Exchange Commission; the fifth shows how futures markets are federally regulated in the US; and the sixth is a case study of an important regulatory failure – the silver manipulation of 1979–80 in the USA. The final section looks at regulation in the UK.

Engel’s Law states that the share of food in total expenditures is inversely related to the household’s income (or some other measure of its total resources). This implies that the income elasticity of food expenditure is less than one. Of all empirical regularities observed in economic data, Engel’s Law is probably the best established; indeed it holds not only in the cross-section data where it was first observed, but has often been confirmed in time-series analysis as well. Like most economic laws, however, it holds ceteris paribus prices, among other things, are assumed constant. There is also evidence that the income elasticity of food, like the budget share, is inversely related to income; the elasticity may be as high as 0.8 or 0.9 at very low income levels, and close to zero for high incomes. As Engel himself emphasized, his law has profound consequences for economic development. Food is the main product of agriculture; therefore a declining share of food in aggregate consumption implies a declining share of agriculture in aggregate production. ‘Balanced growth’, in which all sectors grow at the same rate, is impossible. A full analysis of the effects of Engel’s Law would require explicit consideration of relative prices and of productivity in the farm and nonfarm sectors; foreign trade may also have an effect. Under plausible assumptions the number of farmers and farm workers will decline not only relatively but also absolutely, and population will flow from rural to urban areas. If these adjustments do not occur quickly enough, per capita income in the farm sector will fall behind its nonfarm equivalent. In developed countries this phenomenon is known as the ‘farm problem’. It can be shown (Houthakker 1967) that the severity of this problem depends on the growth rate of farm productivity: by becoming more efficient farmers tend to work themselves (or more precisely their less efficient competitors) out of a job. The root cause, however, is Engel’s Law, which is peculiar to food; attempts to demonstrate similar laws for other categories of expenditure have had less success. It should be added that when applying to agricultural development the decomposition of the expenditure elasticity into a quantity and a quality elasticity is relevant. The reason is that, by and large, agriculture produces quantity, while food processing and trade produce quality. In the case of total food Bunkers and Cochrane (1957) have shown that the quantity elasticity is much less than the expenditure elasticity.

IN 1977, the merchandise trade accounts of the United States recorded the largest deficit to date-$31.4 billion. Viewed in historical perspective, any U.S. trade deficit is an unusual occurrence: until 1971, the U.S. trade balance had been in surplus throughout the twentieth century. In 1977, the United States had a deficit of 1.7 percent of the gross national product, or 11.5 percent of the combined value of merchandise exports plus imports. (By comparison, Italy's trade deficit in 1974 was 10.3 percent of trade value; the deficit of the United Kingdom was 4.7 percent in 1967 and 12.1 percent in 1974.) The U.S. invisibles account showed a substantial surplus, however, so that the estimated current-account deficit in 1977 of $19.3 billion was 7.1 percent of the value of merchandise trade. The present U.S. trade deficit is particularly conspicuous because the balance has declined precipitously since late 1975. In 1975:4, the trade balance (seasonally adjusted annual rate) was an $8.9 billion surplus; one year later it had become a deficit of $14.4 billion, and by 1977:4, the deficit had grown to $35.5 billion. This change in the trade balance resulted from a slow growth in the value of U.S. exports (an increase of 7.1

After arguing for a computational approach to the theory of international trade the paper presents an algorithm for solving a generalized Ricardian two-country model. The algorithm focuses on the ‘critical exchange ratios’ at which the pattern of specialization changes. In the absence of barriers to trade there is one exchange ratio (defined as the value of one country's labor in terms of the other country's labor) at which production of a good moves from one country to the other. With barriers to trade there are two critical ratios for each good, between which it is not traded. Taking the critical ratios in sequence the trade balance can be calculated as a discontinuous function of the exchange rate; where the balance equals zero (or some given transfer) the problem is solved. The method works with arbitrary demand functions and can handle intermediate products.

W E shall not know for many months if AVIV~the introduction of direct controls over wages and prices in late 1971 was followed by a significant slowdown in the trend of price and wage increases. Even if inflation will moderate somewhat, as is likely, economists will still be debating for years whether this can be attributed to the controls or whether it is simply the delayed result of considerable slack in the economy. But whatever the outcome of this future academic debate, some form of direct control is likely to be with us for some time. The establishment of direct controls on August 15, 1971 was popular among the public at large and subsequent opinion polls indicate that this program, despite its uncertain performance to date, has not become a political liability. The controls are only likely to be abandoned if they seriously hurt some important pressure group without visible offsetting benefits elsewhere, but this has not happened so far. Although some discontent among West Coast longshoremen gave most of the labor representatives on the Pay Board a pretext for walking out, most union members, and even the departed leaders themselves, are apparently quite willing to live with continued controls. The Price Commission has so far managed to avoid widespread criticism, except on the issue of food prices over which the Commission has only limited jurisdiction. Aside from public reaction, another reason for thinking that controls will not disappear soon is that inflationary pressures are likely to become more intense as the economy comes closer to capacity operation. If there is a case for controls when unemployment is around 6 per cent, it will be even stronger if unemployment drops to a more sustainable level. Unlike the control programs imposed in wartime, the present program has no natural termination point. The view that the present controls will be effective mainly by bringing about a reversal in inflationary psychology is not likely to be substantiated unless inflation can be curtailed much more drastically than official pronouncements suggest. A reduction in the inflation rate from 4 per cent to 3 per cent, while welcome, will scarcely allay widespread apprehension about large budget deficits and rapid monetary expansion. In fact, the belief that sheer psychology, as opposed to expectations based on experience, plays an important role in the inflationary process does not appear to be supported by any evidence. Unless real output can be made to grow at a much higher rate than has so far been achieved, the rapid growth in the money supply combined with the usual lags virtually guarantees the preservation of inflationary pressures well into 1973, if not longer.1 A recent Brookings study (Schultze et al. 1972, especially chapter 13) suggests that the Federal budget will not be a restraining influence either. If this prognosis for controls is correct, the question is what they will actually achieve. Even if attained, the modest reduction in the inflation rate officially set as a goal provides only weak justification for this drastic departure from our generally successful economic traditions. There is some indication that the Pay Board and Price Commission will serve less as a means of curtailing inflation than as watchdogs over big business and big labor. The three-tier classification of business firms by the Price Commission is one indication in this direction, and it has been further reinforced by the recent exemption of most small enterprices from price and wage controls. The Pay Board and the Construction Industry Stabilization Committee already spend most, if not all, of their time on organized labor. There is indeed a case for better supervision of the labor unions. In the last few years we

Journal Article Social Choice and Individual Values Get access Social Choice and Individual Values. By Kenneth J. Arrow. Cowles Commission Monograph No. 12. (New York : Wiley (London : Chapman and Hall), 1951. Pp. xi + 99. 20s.) H. S. Houthakker H. S. Houthakker Department of Applied Economics, University of Cambridge Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 62, Issue 246, 1 June 1952, Pages 355–358, https://doi.org/10.2307/2227013 Published: 01 June 1952

As most of you will recognize, the title of this address is second-hand. It is a variation of one used nearly two decades ago by one of the leaders of our profession, whom the Econometric Society is proud to count among its earliest Fellows. When Paul Douglas gave his Presidential Address to the American Economic Association, he was able to point to a large body of evidence in support of the production function that has made his name a household word among us. And twenty years later it appears that subsequent experience with this function has amply justified the faith of its originatiors in the possibility of establishing simple quantitative laws in economics.

Abstract

Rapid construction of transoceanic fiber optic cables and the successful establishment of private satellite companies with inter-regional or global coverage have fundamentally altered the environment in which international telecommunications capacity is provided. This article presents industry data and discusses market developments which document substantial competition that has emerged in international facilities-based telecommunications. Intelsat, historically the largest provider of international telecommunications capacity, has seen its market position decline rapidly for all services and all major geographic market areas worldwide.

Journal Article MR. NEWMAN ON REVEALED PREFERENCE Get access H. S. HOUTHAKKER H. S. HOUTHAKKER Stanford University Search for other works by this author on: Oxford Academic Google Scholar Oxford Economic Papers, Volume 9, Issue 2, June 1957, Page 234, https://doi.org/10.1093/oxfordjournals.oep.a042283 Published: 01 June 1957

Introduction. The Fitness maximized by the Classical Canonical Economy: a Theme from Houthakker and R.A.Fisher P.A. Samuelson. Income and Price Sensitivity in Consumer Demand Analysis A.B. Barten. Cross-Section Engel Curves, Expenditure Distributions and the 'Law of Demand' B. Grodal, W. Hildenbrand. Tests of Dynamic Specification and Homogeneity in a Demand System J. Muellbauer, P. Pashardes. Specification and Estimation of Dynamic Demand Systems R.A. Pollak, T.J. Wales. Remarks on the Power of Non-Parametric Tests of Consumer-Theory Hypotheses R.R. Russell. Brain Structure and Consumption Dynamics L.D. Taylor. Corners in Organized Futures Markets L.C. Telser. Oil Futures and Strategic Stocks at Sea P. Mollgaard, L. Phlips. The Effect of Income and Prices on Protection and Rent Seeking in the U.S., 1950-1986 S.P. Magee. Introduction: Four Unpublished Papers by Hendrik S. Houthakker: Are there Laws of Consumption? H.S. Houthakker. The Dynamics of Total Consumption and Savings H.S. Houthakker, S.D. Tendulkar. On a Class of Dynamic Demand Functions H.S. Houthakker. Proposed Technique for Estimating Demand Functions for Time Series H.S. Houthakker. Publications of Hendrik S. Houthakker.

M y assignment is to speak about the regulation of financial futures markets, but in this respect the differences between financial futures and the traditional commodity futures are comparatively minor. Most of what I have to say, therefore, will apply to the regulation of futures markets in general. Towards the end of my remarks I shall say something about the problems that are particular to financial futures.

Peak Loads and Efficient Pricing: Further Comment Get access H. S. Houthakker H. S. Houthakker Stanford University Search for other works by this author on: Oxford Academic Google Scholar The Quarterly Journal of Economics, Volume 72, Issue 3, August 1958, Pages 463–464, https://doi.org/10.2307/1882235 Published: 01 August 1958

Previous articleNext article No AccessBook ReviewsToward a New Iron Age? Quantitative Modeling of Resource Exhaustion. Robert B. Gordon , Tjalling C. Koopmans , William D. Nordhaus , Brian J. Skinner Hendrik S. HouthakkerHendrik S. Houthakker Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmail SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 98, Number 2Apr., 1990 Article DOIhttps://doi.org/10.1086/261688 Views: 3Total views on this site Citations: 1Citations are reported from Crossref Copyright 1990 The University of ChicagoPDF download Crossref reports the following articles citing this article:Robert D. Cairns On Gray’s Rule and the Stylized Facts of Non-Renewable Resources, Journal of Economic Issues 28, no.33 (Jan 2016): 777–798.https://doi.org/10.1080/00213624.1994.11505582

American Journal of Agricultural EconomicsVolume 58, Issue 2 p. 259-269 Proceeding Do We Need a National Food Policy? H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this author H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this author First published: 01 May 1976 https://doi.org/10.2307/1238976AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Volume58, Issue2May 1976Pages 259-269 RelatedInformation

Journal Article Rejoinder Get access H . S. Houthakker, H . S. Houthakker Search for other works by this author on: Oxford Academic Google Scholar James Tobin James Tobin Search for other works by this author on: Oxford Academic Google Scholar The Economic Journal, Volume 62, Issue 248, 1 December 1952, Page 939, https://doi.org/10.2307/2226561 Published: 01 December 1952

Previous articleNext article No AccessBook ReviewsFolded, Spindled, and Mutilated: Economic Analysis and U.S. v. IBM. Franklin M. Fisher , John. J. McGowan, Joen E. Greenwood Hendrik S. HouthakkerHendrik S. Houthakker Search for more articles by this author PDFPDF PLUS Add to favoritesDownload CitationTrack CitationsPermissionsReprints Share onFacebookTwitterLinkedInRedditEmailPrint SectionsMoreDetailsFiguresReferencesCited by Journal of Political Economy Volume 93, Number 3Jun., 1985 Article DOIhttps://doi.org/10.1086/261321 Views: 2Total views on this site Citations: 2Citations are reported from Crossref Copyright 1985 The University of ChicagoPDF download Crossref reports the following articles citing this article:, David M. Byrne, , Stephen D. Oliner, , Daniel E. Sichel How Fast are Semiconductor Prices Falling?, Finance and Economics Discussion Series 2017, no.005005 (Jan 2017).https://doi.org/10.17016/FEDS.2017.005Christoph Engel Giving the German Cartel Office the Power of Divestiture - The Conformity of the Reform with Constitutional Law, SSRN Electronic Journal (Jan 2007).https://doi.org/10.2139/ssrn.1075046

American Journal of Agricultural EconomicsVolume 53, Issue 5 p. 762-766 Policy Issues in International Trade and Economic Development Domestic Farm Policy and International Trade H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this author H. S. Houthakker, H. S. Houthakker professor of economics Harvard UniversitySearch for more papers by this author First published: 01 December 1971 https://doi.org/10.2307/1238076AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinkedInRedditWechat Volume53, Issue5December 1971Pages 762-766 RelatedInformation