Consumer's surplus and income redistribution

In reformulating consumer's surplus analysis, Hicks focused on a single household. The present essay extends the analysis to many households in a manner that seems not yet to have been explored systematically: by integrating consumer's surplus with the social welfare function. This is done in a general, as distinct from the usual partial, equilibrium context. A resulting formula, relating the community's gain from a resource reallocation in a novel way to the associated changes in volume and distribution of income, inclusive of surpluses, may facilitate applications. The analysis may also clarify some recurring issues regarding consumer's surplus.     

Notes on the production function in Soviet postwar industrial growth

The comparative results of different econometric inquiries into the sources of postwar growth of Soviet industrial production are explored. In view of limitations in the underlying data and occasional marked divergences in results, the validity of the obtained estimates is problematic. A priori grounds point to the same conclusion. The econometric inquiries serve, nevertheless, to alert us to a wide range of possibilities regarding the parameters. However, the comparison of the technical progress achieved by the USSR and various Western countries is not critically affected by the precise magnitude of one key parameter, the elasticity of factor substitution.     

Social choice and welfare economics under representative government

In his Impossibility Theorem, Arrow demonstrated logically that certain a priori conditions cannot all be satisfied by a rule of social choice. Those conditions, however, are admittedly value judgments, and how ethically impelling they are remains in dispute. To appraise that matter, the theorem is properly seen in a political context, and Arrow himself has seen it so, but he focuses in effect on ‘direct democracy.’ Further clarification may result from reference instead to different forms of ‘representative government.’ The same inquiry may also illuminate another still controversial matter: the import of the theorem for welfare economics.     

INDEX NUMBERS AND THE COMPUTATION OF FACTOR PRODUCTIVITY1

For purposes of analyzing the nature and meaning of index number formulas to be used in the calculation of factor productivity, a distinction is made between interetemporal comparison of factor productivity for a single country and contemporaneous comparison of factor productivity in two different countries. In the former case, the country in question is supposed ideally to be realizing fully its production possibilities, and the concern is seen as appraisal of shifts in such possibilities over time due to the advance of technological knowledge. Following Moorsteen such an advance is taken to be represented by the change in capacity to produce a standard mix of outputs per unit of a standard mix of inputs. Any mix might be standard, but those actually realized at the times in question are of particular interest. The index number formulas to be applied then depend on the assumed shape of the functions representing production possibilities. The conventional practice of aggregating output arithmetically and inputs geometrically, for example, is in order where production possibilities are given by an elaborated Cobb-Douglas function, but achieves only more or less approximate results otherwise. The analysis necessarily bears also on the prices at which inputs and outputs are to be valued. For the case of contemporaneous comparison of different countries, technological knowledge is taken ideally to be the same in the countries considered. Hence the concern is to gauge differences in production efficiency, i.e., realization of production possibilities. With production capacity understood to reflect any shortfall from possibilities, and hence production inefficiency in that sense, the analysis proceeds much as before, but given the fact of inefficiency determination of suitable prices for valuation of inputs and outputs becomes relatively difficult. Alternative expedients, none entirely satisfactory, are explored.     

Die Deckungsvorsorge der Versicherungsvermittler nach der EU-Versicherungsvermittlungs-Richtlinie

Insurance intermediaries being obliged to be registrated in Germany due to the directive have to comply with severe provisions concerning cover provisions (i. e. Deckungsvorsorge). A third-party liability insurance is virtually compulsory for insurance brokers and insurance agents charged by several insurance companies (i. e. Mehrfach-Agent), other kinds of equal alternatives for them do not exist practically. Concerning exclusively charged insurance agents (i. e. Ausschließlichkeits-Agenten), as well as in a side job, an indemnity clause of their insurance company giving the third party full rights may be a an alternative complying with the directive. The minimum covering funds being prescribed by the directive of € 1 million per event of damage and the minimum annual covering sum of € 1.5 million are appropriate to third party liability risks of an average insurance broker on the German market, for almost all of the insurance agents on this market without a permitted covering provisions, with regard to their very little third party liability risks, they are too high. Nevertheless, the German legislator is not entitled to deviate from them to lower sums for lack of an authorization rule in the directive. German legislator should transform the rules of the directive into national ones as soon as possible in favour of the interests of the consumers worthy of protection, using the existing national regulations on lawyers, notary publics, tax consultants and accountants concerning minimum contents of compulsory cover provisions and agreed exclusive clauses.