Cost and technical change: Effects from bank deregulation

Banks were substantially deregulated during the 1980s. This altered the cost-minimizing mix between deposit interest payments and operating expenses (capital and labor for branch convenience and free deposit services). Measured bank output was relatively unaffected by these changes. The proportion of deposits receiving higher interest rates increased more rapidly than factor quantities were reduced, so unit deposit costs rose. Consumers benefited, but the measured net effects for banks were negative, averaging –0.8% to –1.4% a year in net technical change from 1977 to 1988. These influences were measured three different ways and for both equilibrium and disequilibrium factor input specifications. All three approaches—a standard time trend, a time-specific index, and shifts in cross-sectional cost functions—gave consistent results. The results were robust whether measured at the banking firm or branch office level or on the cost frontier.     

Health and development∗

The linkage between development and health is clearly spelt out in the definition of primary health care by the World Health Organisation. There is a widespread and growing disillusionment with the traditional Western approach to health care which fails to meet the real demands of the Third World situation.

This paper looks briefly at conditions in the developing world and the strategy proposed by the W H O to attempt to meet the objective of health for all by the year 2000 and refers to the South African situation.     

On the difference between the keynesian,knightian and the ‘classical’ analysis of uncertainty and the development of a more general monetary theory

Summary In this article it is shown that Keynes concept of uncertainty is not identical with that of Knight, as is often argued. The identification of Keynesian with Knightian uncertainty has contributed to the neglect of an aspect of Keynesian uncertainty that is important in understanding the functioning of a monetary economy. Therefore, it is concluded that monetary theory can benefit from the development of an analytical apparatus that incorporates all aspects of Keynesian uncertainty.I am indebted to Mr. J. de Haan, Professor J.A. Kregel, Professor S.K. Kuipers, Professor J. Pen, Dr. J. Snippe and Mr. A. van Witteloostuijn for their comments on an earlier version of this paper. It goes without saying that they cannot be blamed for any remaining errors.