Paul A. Samuelson

The Pure Theory of Public Expanditure

Классическая работа лаурета Нобелевской премии по экономике Пола Самуэльсона, заложившая основу современной теории общественных благ. В статье формулируются условия выбора оптимального объема предоставления общественного блага, ныне присутствующие в любом учебнике микроэкономики и экономики общественного сектора.

A Note on the Pure Theory of Consumer's Behaviour

FROM its very beginning the theory of consumers choice has marched steadily towards greater generality, sloughing off at successive stages unnecessarily restrictive conditions. From the time of Gossen to our own day we have seen the removal of (a) the assumption of linearity of marginal utility; (b) the assumption of independence of utilities; (c) the assumption of the measurability of utility in a cardinal sense; and (d) even the assumption of an integrable field of preference elements.. The discrediting of utility as a. psychological concept robbed it of its only possible virtue as an explanation -of human behaviour in other than a circular sense, revealing its emptiness as even a construction. As a result the most modern theory confines itself to an analysis of indifference elements, budgetary equilibrium being defined by equivalence of price ratios to respective indifference slopes. Consistently applied, however, the modern criticism turns back on itself and cuts deeply. For just as we do not claim to know by introspection the behaviour of utility, many will argue we cannot know the behaviour of ratios of marginal utilities or of indifference directions. Why should one believe in the increasing rate of marginal substitution, except in so far as it leads to the type of demand functions in the market which seem plausible ? Even on the advanced front we are confronted with this dilemma -either the argument with respect to indifference varieties is circular or to many people inadmissible (at least without further demonstration). Hence, despite the fact that the notion of utility has been repudiated or ignored by modern theory, it is clear that much of even the most modern analysis shows vestigial traces of the utility concept. Thus, to any person not

Social Indifference Curves

I. Introduction: widespread use of community indifference curves, 1. — II. Attempts to justify the use of community indifference curves, 3. — III. Proof of the nonexistence of community indifference contours, 4. — IV. Nature of Scitovskys community indifference contours, 6. — V. Problem of family preference: a parable, 8. — VI. Optimal ways of achieving income redistribution, 12. — VII. Regular properties of social indifference contours, 14. — VIII. Perfect competition and bliss, 19. — IX. Final summary, 21.

Diagrammatic Exposition of a Theory of Public Expenditure

In the November 1954 issue of the Review of Economics and Statistics my paper on ‘The Pure Theory of Public Expenditure’ presented a mathematical exposition of a public expenditure theory that goes back to Italian, Austrian, and Scandinavian writers of the last 75 years. After providing that theory with its needed logically-complete optimal conditions, I went on to demonstrate the fatal inability of any decentralized market or voting mechanism to attain or compute this optimum. The present note presents in terms of two-dimensional diagrams an essentially equivalent formulation of the theory’s optimum conditions and briefly discusses some criticisms.

Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization

Most noneconomists are fearful when an emerging China or India, helped by their still low real wage rates, outsourcing and miracle export-led developments, cause layoffs from good American jobs. This is a hot issue now, and in the coming decade, it will not go away. Prominent and competent mainstream economists enter into the debate to educate and correct warm-hearted protestors who are against globalization. Here is a fair paraphrase of the argumentation that has been used recently by Alan Greenspan, Jagdish Bhagwati, Gregory Mankiw, Douglas Irwin and economists John or Jane Doe spread widely throughout academia. Yes, good jobs may be lost here in the short run. But still total U.S. net national product must, by the economic laws of comparative advantage, be raised in the long run (and in China, too). The gains of the winners from free trade, properly measured, work out to exceed the losses of the losers. This is not by mysterious fuzzy magic, but rather comes from a sharing of the trade-induced rise in total global vectors of the goods and services that people in a democracy want. Never forget to tally the real gains of consumers alongside admitted possible losses of some producers in this working out of what Schumpeter called “creative capitalist destruction.” Correct economic law recognizes that some American groups can be hurt by dynamic free trade. But correct economic law vindicates the word “creative” destruction by its proof [sic] that the gains of the American winners are big enough to more than compensate the losers.

The Fundamental Approximation Theorem of Portfolio Analysis in terms of Means, Variances and Higher Moments

Publisher Summary The chapter presents an alternative way to relate the expected utility and mean-variance approaches. It presents proofs of the two general theorems involved in an aspect of the mean-variance model—namely, the usefulness of mean and variance in situations involving less and less risk. It describes a defense of mean-variance analysis and highlights its exact limitations along with those for any r-moment model. The mean and variance of wealth are approximately sufficient parameters for the portfolio selection model when the probability distribution of wealth is compact. In the compact case, moments of order 3 and higher are small in magnitude relative to the first two moments of the portfolio return; hence, a limiting approximation indicates that only the first two moments are relevant for optimal portfolio selection.

A Summing Up

I. The simplest Austrian and more general models, 568. — II. Why reswitching can occur, 571. — III. Reswitching in a durable-machine model, 573. — IV. The well-behaved factor-price frontier, 574. — V. Unconventional relation of total product and interest, 576. — VI. Unconventional capital/output ratios, 577. — VII. Reverse capital deepening and denial of diminishing returns, 579. — VIII. Conclusion, 582.

The Pasinetti Paradox in Neoclassical and More General Models

A machine for transferring adhesive labels from both sides of a single carrier strip to two separate streams of product items on a continuous basis. A pair of spaced continuously rotating vacuum wheels come in contact with opposite sides of the carrier strip, the carrier strip passing around a loop-forming roller adjacent each vacuum wheel to bring the label in contact with the vacuum wheel. Each vacuum wheel has holes around the periphery thereof, a vacuum being applied through the openings in a stationary sector of the vacuum wheel. As each label comes in contact with the associated vacuum wheel, it is pulled off by the vacuum and transported through the sector angle to a release point, where it is transferred to the surface of a product item.

Heckscher-Ohlin Trade Theory with a Continuum of Goods

This paper studies trade theory for the case of a continuum of goods, two factors, two countries, and Cobb-Douglas demand functions. If factor endowments are similar, factor price equalization obtains and geographic patterns of production are indeterminate; nonetheless the effects of changes in factor endowments on prices and welfare in each country are well defined. Factor price equalization does not obtain if factor endowments are far apart, and the geographic pattern of specialization is then determinate. The effects of changes in endowments on the range of goods produced in each country and on prices of goods and factors are analyzed for this case, and the elasticity of substitution in production is shown to play an important role in determining comparative static outcomes.

The Optimum Growth Rate for Population

The theory of optimum population concerned with the stationary plateau of population considers limitations of unaugmentable land and economics of scale and maximizes per capita output and consumption. In the usual version of the growth model the slower the rate of exponential growth the higher the level of steady-state consumption. The present analysis considers differentiated periods of life work and retirement and investment in capital goods and derives the conditions for an optimum intermediate population growth rate. The analysis proves by serendipity theorem that under laisse faire private saving would suffice to support this growth-rate state if necessitated by biological and cultural factors. (AUTHORS MODIFIED)