This paper presents a time-series analysis of the socioeconomic factors influencing the propensity of sixteen-year-olds to stay on in full-time education in England and Wales. The econometric methodology employed relies on cointegration and "general to specific" techniques. The results suggest that the main factors influencing staying on are the rate of return to education, changing social class structure, unemployment rates, and the introduction of special employment and training measures such as the Youth Training Scheme. Copyright 1991 by The London School of Economics and Political Science.
This paper constructs a consistent series for the market value of UK government debt over almost 300 years, analysing how monetary and fiscal policy affect the path of the UK price level. Specifically, it examines the interactions between debts, deficits, the monetary base and the price level. Overall, the price level has been closely related to the evolution of the base money supply. Across different sample periods, there is little econometric evidence that fiscal policy has affected the course of the price level (or of the exchange rate under the Gold Standard). Government debt has not significantly affected the base money stock, either. Copyright 2002 by The London School of Economics and Political Science
Tests for "weak-form" efficiency provide one benchmark against which the informational efficiency of a market may be judged. This article reports the results of weak-form efficiency tests of the London market for 3 percent consols for the period 1821-60, using approximately 10,000 daily price changes. The results are similar to those found in contemporary markets, suggesting that this market was efficient in the sense defined. Copyright 1989 by The London School of Economics and Political Science.
Parameters of the distribution of the value of patent rights in Britain and Ireland for the 1852-76 period are estimated, and compared with similar estimates by Schankerman and Pakes (1986) for the 1950-76 period. Market variables of the earlier period have a low ability, but those of the later period a high ability, to explain fluctuations in the value of patent rights. Aggregate patent rights have more lower-valued patents in the earlier period. In the earlier period there was no trade-off between quantity and 'quality' of patents, but in the later period there was. Aggregate value of patent rights increased relative to gross fixed capital formation, from 1870 to 1970, by approximately 100 percent. A greater amount of R&D effort helps to explain many of the differences found between the two periods. Copyright 1994 by The London School of Economics and Political Science.
The purpose of this paper is to show how many Scottish companies were formed in each year in the second half of the nineteenth century, what they sought to achieve, how long they lived, why they passed out of existence, and just how much capital was involved. In addition, an attempt has been made to determine the magnitude of one mode of Scottish overseas investment and the possible relationship between the size, length of life and growth of the incorporated firm.
Explores the money adjustment process, drawing on a monetary data base and using recently developed econometric techniques. Discusses the money adjustment process, gives the estimation technique used, and subjects the obtained specification to a variety of diagnostic tests. Addresses interest and income elasticities and the unsettled issue of the stability of the demand for money.-from Authors
Discusses Hirsch and Hausman's explanation of the movement in labour productivity in the South Wales coalfield during 1874-1914. Suggests that this relied on the coalminers labouring under a money illusion, and that falling productivity and financial prosperity were probably linked. It is possible, therefore, that both owners and miners benefitted from lower productivity.-after Author
Specifies and estimates an empirical model of labour productivity in coalmining, and provides some suggestive evidence regarding the performance of entrepreneurs in this major industry. The results provide added insight into the determination of labour productivity during this period, lending support to those who argue that the failure of British entrepreneurs has yet to be proved, while providing mixed evidence regarding conclusions drawn by economic historians. -from Authors Univ. North Carolina at Greensboro, USA.
This comprehensive new study gives a full account of the formulation of British economic policy in the twentieth century, drawing on the most recent research based on documents made available under the thirty-year rule to give detailed insight into policy-making in the 1950s and bringing the narrative right up to the end of the 1980s. The book offers both a lucid narrative description of the evolution of policy from the turn of the century through the First World War, recovery, the Depression, the Second War and its aftermath, the `Keynesian Revolution', and the shifts and about-turns of more recent decades, and a coherent analysis of these processes. Covering both macro and micro issues, the text is structured in such a way as to give due weight to all the various influences at work: institutional aspects, such as the changing role of policy-making ministries, as well as political debate and economic theory.
Nicholas Kaldor1 resembled Keynes more than any other twentieth-century economist because of the breadth of his interests, his wide-ranging contributions to theory, his insistence that theory must serve policy, his periods as an adviser to governments, his fellowship at King’s and, of course, his membership of the House of Lords. It is impossible in a short article to do full justice to Kaldor’s extraordinary achievements, so I shall concentrate on aspects of his theoretical contributions.2 To put them in perspective at least two things must be remembered. First, while Kaldor was a highly original theorist, full of ideas of his own and making important modifications to and criticisms of the theories of others, he was also fortunate in his mentors, as he generously acknowledged. Second, Kaldor’s contributions to theory fall into three distinct stages.
This study estimates the effective marginal rates of taxation levied during the period 1919-1970 on receipts by United Kingdom investors from (a) dividends and (b) interest on bonds (quoted fixed interest securities). The estimates make allowance for the diverse marginal rates of income tax and surtax (supertax) payable by different categories of recipients, namely the various personal income groups and certain types of institution. The procedure is to distribute a marginal ?1 of dividend/interest in each year among the relevant categories according to their estimated proportions of the total holding of all shares/bonds and (after tracing distributions to institutions notionally to the ultimate personal recipients) to calculate a weighted average of marginal rates. Such an average estimates the tax effectively borne by a security with a representative pattern of ownership. No individual security is likely to be distributed according to such a pattern, but it is hoped that the averages provide reasonable overall values of marginal taxation for use in aggregative studies of savings, portfolio selection and the cost of capital. The results also have some bearing on the management of public revenue and on policies affecting the distribution of wealth and income. It should be borne in mind that the rates of taxation considered in this paper do not apply to capital gains, nor do they include corporate income taxes. In addition to the overall weighted averages, marginal rates are given for particular sectors, including a weighted average for the personal sector as a whole. The main results are set out in Table 1, which shows overall weighted averages of marginal tax rates for dividends and bond interest in each year as well as the standard rate of income tax. Section I of the paper discusses the classification of holders of shares and bonds according to their tax characteristics. Section II describes the methods of calculating marginal tax rates for the various categories. Section III gives
This paper shows that addition of a long-term unemployment variable substantially improves estimates of the wage equation in interwar Britain. Long-term unemployment did not have a damping effect on wage growth whereas short-term unemployment did reduce wage inflation. The results imply that, during the 1930s, the nonaccelerating inflation rate of unemployment rose as the composition of the stock of unemployed altered. Both insider-outsider arguments and employer perceptions of low productivity characteristics among the long-term unemployed are likely explanations for the results in the paper. Copyright 1989 by The London School of Economics and Political Science.
Opponents of flexible exchange rates have stressed their volati lity during the 1930s, while advocates of flexible exchange rates have stressed their relationship to fundamental economic variables. The author reconciles the two views, allowing that although exchange rates did move to preserve pruchasing power parity in the long run, there could be substantial deviations from purchasing power parity in the short run. For the pound-dollar rate, the source of the large fluctuations in the early 1930s lay in the asymmetric response of foreign-exchange markets to fluctuations in Britain and America while the latter adhered to the gold standard. Copyright 1987 by The Review of Economic Studies Limited.
Under an Act of 1926, a 'public interest' corporation, the Central Electricity Board, was empowered to build a national transmission grid and rationalize U.K. electricity generation. A constrained cost model estimates the gains from this reregulation of the electricity generating industry. The new regime reduced costs by one-third, radically improving the utilization of capital and boosting the average scale of operations. It did so by persuading private and municipal enterprises to accept central direction of the extent and timing of their electricity generation. This voluntarism saved on enforcement costs, but perhaps one-half of the industry cost reduction the Central Electricity Board actually achieved by 1937 was apparently forgone. Copyright 1997 by The London School of Economics and Political Science
The purpose of this paper is to estimate the impact of variations in the economic environment on allocatively inefficient behavior by public enterprises, and to measure the implications of both allocative and technical inefficiency for the firm's costs and factor use. Empirical results for the Belgian railroad company suggest the importance of unemployment and the pressure experienced by managers to reduce the deficit as explanatory variables of allocative inefficiency. The implications of inefficiencies for factor use are found to be substantial, although the associated costs are quite small. Copyright 1993 by The London School of Economics and Political Science.
problems of efficacy and timing of instrumental changes in tax practice. Although the model was overtly based on the work of Irving Fisher, the particular formulation is sufficiently distinctive to warrant a separate name; and we shall refer to it as the Jorgenson model. Few econometric analyses dealing with aspects of the post-war British economy are available. In 1968, a study sponsored by the Brookings Institution (, ch. 1) was compelled to acknowledge the absence of any econometric investigation of the British system of investment incentives. In the following sections, this omission is remedied and some empirical results are tabulated for two models applied to data derived for one decade of the post-war British economy.3 These models explicitly include variables representing three types of capital allowances and a variable representing a composite tax-rate. The latter takes account of Income Tax, Profits Tax and a number of other special levies. The Jorgenson model provided a convenient starting point in the process of building these models, although its translation to a different economy involved the rejection of Jorgenson's specification for the system of tax allowances chargeable against gross income as defined for tax purposes. An alternative specification was substituted, and there are marked differences between the expression for the "user-cost" of capital services derived on the basis of the Jorgenson model and the corresponding expressions derived for our alternative models. All of these models share deficiencies in the final expressions for desired capital services arising from the use of the Cobb-Douglas characterization of
In the leasing industry, the risk of loss on sales at the end of the contract term, as well as pricing are critically impacted by the forecasted resale price of the asset (residual value). We apply the Hedonic methodology to European auto lease portfolios, in order to estimate the resale price distribution. The Hedonic approach estimates the price of a good through the valuation of its attributes. Following a discussion on Hedonic prices, we propose an operational model for the automobile resale market. The model is applied to four European countries (France, Germany, Spain and Great Britain), and distributions are calculated on two vehicle versions (Audi A4 & Ford Focus) allowing a comparison of market depreciation patterns and residual value risks.
growth. In Section I the "Paish hypothesis" is discussed. In Section II a distributed-lag accelerator is discussed, and in Section III a sparecapacity variable is introduced into a capital stock adjustment model. In Section IV the relationship between investment and spare capacity is discussed, and in Section V the results of various models (estimated by the method of ordinary least squares) are compared with one another and with those of a naive predicting model. Finally, the policy implications of the analysis are considered.
The paper studies the realignments induced by inflation within an endogenous growth monetary economy. Accelerating inflation raises the ratio of the real wage to the real interest rate, and so raises the use of physical capital relative to human capital across all sectors. We find cointegration evidence for the US and UK economies consistent with a general equilibrium, Tobin-type, effect of inflation on input prices and capital intensity, even while the growth rate of output is reduced by inflation. Copyright The London School of Economics and Political Science 2003.
This paper examines the market for teachers in the UK from 1960 to 2002 using six graduate cohort data-sets. We find that, while there is no strong evidence that teachers are underpaid, the relative wages in teaching compared with alternative professions have a significant impact on the likelihood of graduates choosing to teach. This wage effect is strongest at times of low relative teachers' wages, or following a period of decline in those wages. It is also strongest for those individuals who have more recently graduated, and for men. Copyright (c) The London School of Economics and Political Science 2006.