Harvard Economic Studies

Susan Houseman’s book presents some of the first hard evidence on the economic effects of providing job security, evidence gathered during the restructuring of the European Community’s steel industry in the 1970s and 1980s. The author reviews personnel practices by the Community’s leading steel companies, basing her analysis on extensive interviews with employers, workers, and government officials in West Germany, France, Britain, Belgium, Luxembourg, Italy, and the Netherlands. Drawing on economic theory, she shows that the extent of workers’ rights to job security will affect how an industry optimally adjusts to a decline in demand and to a situation of excess capacity.

Joseph A. Schumpeter proclaims in this classical analysis of capitalist society first published in 1911 that economics is a natural self-regulating mechanism when undisturbed by “social and other meddlers.”

Based on data used by Soviet administrators in making their decisions, this book establishes for the first time in a scientifically acceptable manner the principles according to which differences in earnings in the U.S.S.R. are determined. It is also the first study to present comparable data on the inequality prevailing under capitalism.

A new Introduction portrays the genesis of this classic and analyzes how its contributions fit into theoretical developments of the last thirty-five years. A new and lengthy mathematical appendix gives a survey of the following post-1947 breakthroughs in political economy, in relation to the methodology of Foundations: linear programming and comparative statics; nonlinear programming, dynamic and stochastic; modern duality theory; the testable content of the neoclassical money model; probabilistic decision making, with new slants on the dogma of Expected-Utility maximizing; and portfolio and liquidity preference analysis by general methods that transcend mean-variance approximations.

Long respected as a classic in Europe, this translation is welcomed as the first comprehensive survey of Swedish economic history available in this country. Herein the late Eli Filip Heckscher discusses Swedish economy from the feudalism of the Middle Ages to World War II socialism.

Carl Kaysen offers a penetrating economic analysis of the issues in the civil antitrust suit brought by the United States Government against the United Shoe Machinery Corporation under Sections 1 and 2 of the Sherman Act. Kaysen, who served as clerk to Judge Charles E. Wyzanski, Jr., of the U.S. District Court of Massachusetts for this case, provides background material on the technique of shoe machinery and shoe manufacture, on the history of the United Shoe Machinery, and on the Anti-Trust Laws.

Concerned primarily with oligopoly, this work includes a general study of pricing in three different markets—perfect competition, perfect monopoly, and imperfect competition. The solutions of these markets offered by Cournot, Smithies, Chamberlin, Stackelberg, Fellner, and Robinson are presented mathematically, followed by the author’s own version of the theory of rational pricing in oligopoly.

This comprehensive discussion of international trade theories focuses on logically distinct models of international trade rather than on chronology or “schools of thought.” The author gives primary attention to the differences in the empirical implications derivable from the “Heckscher-Ohlin model” and from the simple classical comparative models of international trade. He also emphasizes the recurrence of controversy over matters of aggregation, due to the lack of a common criterion, and the rich variety of model types that result from dynamic theorizing, discrediting the search for an ultimate dynamic international trade model.

How much does a country’s commercial policy affect its economic efficiency? How would free trade change the structure of a country’s economy and foreign trade? William Penfield Travis extends the Heckscher-Ohlin trade theory and addresses it to an empirical study of these and related questions. He argues that trade flows fail to reflect relative factor endowments because protection systematically nullifies their effects, and that therefore protection must be incorporated in any positive trade theory.

Olson develops a theory of group and organizational behavior that cuts across disciplinary lines and illustrates the theory with empirical and historical studies of particular organizations, examining the extent to which individuals who share a common interest find it in their individual interest to bear the costs of the organizational effort.

Martin McGuire has written for the specialist and the concerned layman a highly original and valuable contribution to our understanding of the arms race, based upon economic theory in general and the theory of economic duopoly in particular.

In the first study in depth of this subject by an economist, the author focuses on a major problem—common to all planned economies—that has confronted the Chinese Communists: whether to centralize all controls in the hands of the planners, or to allow factory and farm managers some degree of autonomy regulated only by the indirect pressures of the market. Because the finding of a satisfactory solution has been of highest importance to Peking, this study of the issue throws light on the shifts and turns of Chinese economic policy in general and on the underlying nature and significance of the broad trends in China’s economy and society since 1949.

This unique study determines, by means of rigorous quantitative analysis, how cycles in New England cotton textile profits, output, borrowing, and capacity affected investment—and therefore industrial growth—during the nineteenth century. The firms studied were transitional forms between owner-managed companies and the modern corporation. From primary sources, Paul McGouldrick has constructed standardized balance sheets and income statements for each company year by year. A painstaking comparison with a much broader sample of companies shows that trends and cycles in profit rates for companies studied were typical of the industry.

In the United States during the early years of this century, there were considerable seasonal variations in the balance of trade, primarily caused by the annual agricultural cycle. This intensive examination of the New York money market during the period demonstrates that the frequent fluctuations in monetary conditions were caused by these variations in the trade flows rather than by capital movements by banks. Some of the criticism of the structure of the banking system by contemporary economists, which encouraged the adoption of the Federal Reserve System, is shown to have been misplaced.

In India the high cost of savings makes the efficient use of investable resources crucial. Robert Repetto’s empirical study of selected Indian development programs shows that efficiency in investment depends largely on the effective management of time and on success in accelerating the benefits of investment projects.

This volume makes available the first English version of L’Économie mondiale et les frappes monétaires en France, 1493–1680, Frank C. Spooner’s original and distinguished contribution to economic and monetary history. Generously illustrated with maps and graphs, and abridged by the author, this study introduces the English-reading audience to the methodological approaches of the modern school of French economic history. In this edition, Spooner covers an additional forty-five years not included in his original work: the period 1680–1725 which marks the prelude to the great monetary reform and consolidation of France in 1726.

The service sector represents a smaller share of the national economy in the Soviet Union than in other countries at similar levels. This gap is found in trade, in private and business services, and, surprisingly, in public administration. Gur Ofer provides a twofold examination of this phenomenon. He uses cross country comparisons to study the “normal” relationships between the size of the service institutions and economic development. At the same time he investigates specific factors operating in Socialist and Soviet countries, thus uniting the special Soviet case with general development theory.

Why should manufacturing firms in many national industries maintain multiple small scale plants when they might produce the same output at a lower unit cost in a single large establishment? What specific benefits are attained through the operation of multiple plants? To address these questions, the authors conducted 125 in-depth interviews with businessmen actively involved in plant size and multi-plant operating decisions. They investigated the experience of twelve industries in six countries (West Germany, France, the United Kingdom, Sweden, Canada, and the United States).

A consultant with McKinsey & Company surveys the international aluminum industry and asks why its various activities are divided among firms in the way that they are. These components include the minding of bauxite, its refining into alumina, aluminum smelting, fabrication, and manufacture of the final product. What is it about this industry that encourages joint ventures in some cases, long-term contracts in others, and vertical integration and merger in still others?

This important contribution to tax analysis presents seven related theoretical essays that examine the effects of capital income taxation on the behavior of firms. It is divided into three sections, focusing on optimal tax design, firm financial policy, and inflation. Taken together, the essays demonstrate the powerful role taxes play in shaping the behavior of American corporations, and also provide insights into the difficult task of tax reform.

The Law of the Sea (LOS) treaty resulted from some of the most complicated multilateral negotiations ever conducted. Difficult bargaining produced a remarkably sophisticated agreement on the financial aspects of deep ocean mining and on the financing of a new international mining entity. This book analyzes those negotiations along with the abrupt U.S. rejection of their results. Building from this episode, it derives important and subtle general rules and propositions for reaching superior, sustainable agreements in complex bargaining situations.

What determines the rate of growth, the distribution of income, and the structure of relative prices under capitalism? What, in short, makes capitalist economies tick? This watershed treatise analyzes the answers to these questions provided by three major theoretical traditions: neoclassical, neo-Marxian, and neo-Keynesian.

This book examines, in rigorous, quantitative detail, the structure of trade between Japan and the United States, tracing the evolution of trade interdependence and the causes of its increasing intensity. It also looks at sectoral differences in interdependence—at the patterns behind changes in the composition of trade and the complex factors that determine how individual sectors of each economy respond to economic change in all the others.

This book assesses the effects of spatially concentrated programs for housing and neighborhood improvement. These programs provide direct assistance to low–income property owners in an attempt to arrest neighborhood decline and encourage revitalization.

Perry Mehrling tells a story of continuity around the crucial question of the role of money in American democracy, a question associated generally with the Progressive tradition and its legacy, and more particularly with the institutionalist tradition in American economic thought. In this story, which he tells through the ideas and lives of three prominent institutionalists—Allyn Young, Alvin Hansen, and Edward Shaw—progress is measured not by the swings of fashion between two polar traditions of monetary thought—quantity theory and anti-quantity theory—but rather by the success with which each succeeding generation finds its footing on the shifting middle ground between the two extremes.