INFLATION INEQUALITY IN THE UNITED STATES

Different spending patterns across households and differences in price increases across goods and services lead to unequal levels of inflation faced by different households. In this paper we measure the degree of inequality in inflation across U.S. households for the period 1987–2000. The broad picture that emerges from our results is that over our whole sample period there are substantial differences in the inflation experiences across U.S. households. We find that the cost of living increases were generally higher for the elderly, in large part because of their health care expenditures, and that the cost of living of poor households is most sensitive to the, historically large, fluctuations in gasoline prices. Still, when looking at the whole population, we find that individual households that are confronted with high inflation in one year do not generally face high inflation in the subsequent year as well.     

PUBLIC SECTOR STATISTICS FOR THE UNITED KINGDOM

This paper describes the composition of the public sector in the United Kingdom and traces the development and contribution to the economy of the three main sub-sectors-central government, local government and public corporations—over the past thirty years. Relevant data for output, employment, fixed capital formation and national wealth set the public sector into perspective with the economy as a whole and illustrate how its share of human and other resources has changed over the years. While all four measures show the public sector share of the total to have been around 30 percent in 1980, historically the changes have moved very differently. The slow, but fairly steady, increase in the share of employment and output contrasts with very marked changes in the other two measures. Although public sector fixed investment nearly doubled in real terms between 1950 and 1980 its share of total investment declined from 48 to 31 percent, a much smaller share being taken by dwellings, electricity supply and the railways. In terms of the share of national wealth the public sector moved from a state of indebtedness to the rest of the economy in the fifties and sixties to a position of holding nearly one third of the value of tangible and financial assets in the late seventies. A small part of the paper considers the international dimension, but because few other countries use the concept of a public sector, this section examines only the relationship between total tax revenue and GDP in a number of countries and employment in general government. The problems of determining the boundary of the public and private sectors occurs most frequently at the interface between public corporations and private enterprises; the rules for deciding classification are set out in so far as they can be specified. The last sections of the paper put the statistics into their policy context and consider the value of public sector aggregates. The conclusion is that a general case cannot be made to justify assembling public sector aggregates for all countries; the need will be determined by the economic policies being pursued in a particular country. Although the United Kingdom gives considerable prominence to a public sector financial aggregate, the Public Sector Borrowing Requirement, the functions of the public corporations and the rest of the public sector are so disparate that consolidated accounts for the public sector are no longer prepared.     

COOPERATIVE RURAL ELECTRIFICATION IN THE UNITED STATES

A most impressive work has been accomplished during the past few years in the United States both by the Federal Authorities and by local bodies in the domain of electrification. Their example might advantageously be followed by the Governments bf many other countries. An essential part of this work is concerned with rural electrification, which presents a most original feature in the considerable rôle allocated to a new organ, the cooperative of rural electrification, whose establishment and operation are given every encouragement by the public authorities.
A very exhaustive and remarkably clear account of the whole system adopted, its practical realisation, and the extent of the work already achieved, has been published by the Pan American Union, Division of Agricultural Cooperation (Washington, D.C.), in its "Series on Cooperatives", No. 15. It is the work of Mr. Udo Rall. It will be of the greatest interest to the readers of the Annals of Collective Economy to have this masterly survey brought before them.
We desire to express our gratitude both to the Division of Agricultural Cooperation and to Mr. Udo Rall for their kindness in allowing us to reprint it.     

THE IT REVOLUTION ACROSS THE UNITED STATES

In this paper we study the geography of the IT revolution in the U.S. economy. By relating the intensity of IT production and diffusion to labor productivity growth for the United States, we find three main results. First, states with above-average production intensity of IT manufacturing show more growth acceleration than other states. Second, the same applies to states with above-average IT diffusion. Yet, while the result for IT-producing states is strong, the result for IT-using states is somewhat smaller and less robust across specifications. Third, we also reconcile our state-wide pieces of evidence with previous industry and aggregate evidence. Accelerating productivity growth in IT-producing states stems from both IT-producing and IT-using industries in those states and is not a manifestation of the exclusive importance of IT production. Moreover, the less robust evidence for IT-using states is due to lower growth contributions from IT-producing and other industries in these states, not a symptom of a missing effect of IT usage.     

FAMILIES, TIME AND MONEY IN CANADA, GERMANY, SWEDEN, THE UNITED KINGDOM AND THE UNITED STATES

Using microdata from the Luxembourg Income Study, we assess "time crunch" for families with children in Canada, Germany, Sweden, the U.K. and the U.S. Both theory and empirical evidence suggest that both time and money are important inputs to the well-being of parents and children. We present cross-country comparisons of "total available adult hours" under different assumptions about the varying time needs of families of different size. We also present estimates of "time shortages." In all cases, we provide separate estimates for families located at different points in the country income distributions, since being short of both time and money is likely to be particularly problematic. Although paid work hours are highest for high-income families, we nonetheless find significant numbers of lower-income families in which parents work very long hours in the paid labor market; this is particularly the case in the U.S.     

THE STANDARD OF LIVING IN THE UNITED STATES

A common approach to the evaluation of the standard of living is based on a function of real income. In the United States this often takes the form of CPI-deflated mean household income. Material well-being is more appropriately evaluated using a consumption-based index. Using data from the Consumer Expenditure Surveys we find that real mean income provides an inaccurate representation of the level and trend of the standard of living relative to real per equivalent total expenditure in the postwar United States. The differences between real income and real total expenditure per household equivalent member are found at all levels of aggregation.     

THE DEMAND FOR ENERGY IN THE UNITED KINGDOM

Interfuel substitution, a priori , seems to be of considerable importance in the economy of the United Kingdom. Consequently, an appropriate model is developed and estimated. All energy sources are demonstrated to be substitutable. Coal is the most price responsive with natural gas, oil and electrical following. The results are not inconsistent with other studies of energy substitution. Moreover, when the issue of the stability of the demand for energy types is considered, the suggestion that the demand for coal, oil, natural gas, and electrical energy have remained virtually constant over the past three decades.     

THE NATIONAL BALANCE SHEET OF THE UNITED KINGDOM

The paper discusses national balance sheets in the light of the proposals for their inclusion in the revised SNA. The author uses his own estimated national balance sheet of the United Kingdom as a basis for discussing the problems encountered in the compilation of national balance sheets, and the greater part of the paper is concerned with questions of valuation, classification and statistical source material. The concluding section deals briefly with the structure of the national balance sheet of the United Kingdom and compares its structure with that of the national balance sheet of the United States. Provisional national balance sheets of the United Kingdom for each of the five years 1957 to 1961 are presented.     

CORRUPTION AND INCOME INEQUALITY IN THE UNITED STATES

In this study we analyze the effects of corruption on income inequality. Our analysis advances the existing literature in three ways. First, instead of using one of the corruption indices assembled by various investment risk services, we use an objective measure of corruption: the number of public officials convicted in a state for crimes related to corruption. Second, we minimize the problems which are likely to arise because of data incomparability by examining the differences in income inequality across the United States. Finally, we exploit both time series and cross‐sectional variation in the data. We find robust evidence that an increase in corruption increases income inequality. (JEL D31, D73, I32)     

REGIONAL SOCIAL ACCOUNTS FOR THE UNITED KINGDOM1

Estimates of gross domestic product have been produced by various writers or agencies for Scotland, Wales, and Northern Ireland, and for Wales there are estimates of expenditure also; but only a very tentative attempt has hitherto been made at estimates for the English regions, mainly because the data present difficulties. In the present investigation, in which the estimates in the Bluebook on National Income and Expenditure are partitioned between regions, item by item, a production method was first explored, but this was replaced by use of Inland Revenue data on employment and self-employment income, and production and miscellaneous sources on profits etc. Estimates of expenditure raise particular difficulties in regard to private capital formation and, for different reasons, some parts of public current expenditure. The estimates have been used to throw light on interregional variations in income produced per head and earnings per head, and their relation to activity rates and industrial structure. The flows of property income, and of public transfers of purchasing-power and benefits between regions are also explored, along with regional current balances and evidence bearing on differences in pressure of demand. Finally, the scope for the development of regional social accounting in the United Kingdom is discussed.     

FOREIGN TAKEOVERS AND NEW INVESTMENTS IN THE UNITED STATES

This study is unique in several respects. First, it reviews the characteristics of the top 10 industries targeted for foreign direct investment (FDI) activity in the United States between 1979 and 1987. It analyzes both overall FDI activity and new plant and expansion FDI activity. The study summarizes and tests alternative hypotheses regarding the determinants of FDI in the United States by all countries, by the United Kingdom, by the European Community, by Japan, and by Canada.
Large and growing product markets in an expanding economy have attracted FDI in the United States. Exchange rate movements have prompted opportunistic decisions to invest in U.S. production facilities. Investors' superior management skills appear to have prompted takeovers, while efforts to realize technological advantages of new physical capital and of relatively large operating plants have fostered plant and expansion investments.
Evidence exists that a desire to circumvent current—but not potential—trade restrictions has motivated foreign direct investment. FDI activities are not associated with concentrated or heavily unionized industries. Highly protected industries have attracted heavier equity FDI by Japan and heavier new plant FDI by all sources and Canada. No evidence exists that FDI in the United States by Japan or anyone else is targeted to undercut union-dominated firms or to arrest the spread of protectionist trade policies.