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Index
A
Acceleration, 116, 120, 121, 225
Adriaansens, H., 311
Albeda, W., 263, 311
Alm, R., 232, 242, 243, 244, 245, 246, 314
Ancot, 311
Animal spirits, 218
Annan, K., 233
Aoki, 125, 311
Arminius, 78, 80
Aronson, E., 70, 72, 107, 298, 311
Arrow, K., 27, 31, 84, 158, 159, 160, 161, 162, 163, 164, 165, 166,
168, 169, 170, 171, 172, 173, 174, 175, 176, 180, 183, 206, 234, 278,
300, 306, 311, 313, 314, 317, 319, 320
Ash, T.G., 259
Ashenfelter, O., 96, 99, 311
Ashton, 94, 96, 318
Auerbach, A., 94, 311
B
Bacon, 17
Bakhoven, A., 206, 298, 303, 311
Balkenende, J.P., 258
Barndorf-Nielsen, 78, 311
Barro, R.J., 22, 98, 100, 110, 233, 311
Barrow, J., 71, 75, 76, 278, 279, 311
Barten, A., 15, 32, 311
Basic income, 127, 138, 272, 278
Basic insurance, 110, 127
Bean, 313
Beatrix of Orange, 279
Beckerman, W., 13, 311
Beenstock, M., 94, 311
Begg, D., 311
Beld, C.A. van den, 150, 311
Bellman, R., 224, 311
Bentham tax, 45, 49, 50, 54, 55, 93, 109, 112, 115, 128, 131, 139, 140,
141, 142, 145, 146, 147, 204
Berg, P. van den, 314
Berg, R. van den, 33, 279, 301, 311
Bergeijk, P. van, 28, 187, 312
Berlin, 3, 18, 22, 31, 35, 66, 68, 197, 260, 271, 303
Bernholz, 313
Bernstein, 197, 219, 312
Besseling, P., 312
Blair, T., 56, 258, 259
Blanchard, O., 13, 28, 40, 94, 312
Blaug, M., 276, 312
Blinder, A., 218, 288
Bochenski, 82, 312
Bochove, van, 312
Booker, C., 259
Boone, J., 97
Borda, 173, 175, 177, 178, 179, 180, 181, 183, 300, 306
Borjas, G., 41, 42, 94, 95, 97, 108, 312
Bos, W., 258
Boskin, 245
Boumans, M., 15, 312
Bovenberg, L., 312
Braband, van, 319
Brandsma, A., 312
Brittan, S., 312
Britton, 318
Broeder, G. den, 96, 264, 312
Broer, P., 37, 97, 312
Bron, J., 312
Bruno, M., 28, 30, 93, 225, 237, 312
Buchanan, 14
Buitenhuis, P., 312
Buridan, 166
Burns, A., 287
Bush, G.H.W., 284
Bush, G.W., 158, 178, 254, 302
C
Cairncross, 30
Card, D., 297
Carter, J., 237
Cavalli-Sforza, L.L., 184, 185, 301
Centraal Bureau voor de Statistiek, 43, 274, 312, 313
Central Bank, 24, 59, 92, 222, 225, 237, 238, 281
Central Planning Bureau, 13, 14, 20, 28, 32, 37, 38, 40, 43, 69, 86,
94, 96, 97, 135, 138, 139, 150, 151, 158, 172, 206, 250, 251, 252, 253,
254, 255, 260, 261, 262, 263, 264, 272, 289, 298, 302, 303, 304, 311,
312, 313, 314, 315, 316, 319, 320
CEPS, 313
Chaos, 64, 81, 85, 168, 229
China, 22, 217, 234
Chirac, J., 178
Clemence, 316, 317
Clinton, W.J., 56, 288, 289, 293, 304
Cnossen, S., 186, 187, 313
Coase, R., 13, 113, 187, 239, 313
Coats, A.W., 313
Cohen Stuart, 56, 57, 62, 109, 204, 305
Colander, D., 313
Colignatus, Th., 1, 2, 13, 26, 37, 59, 70, 72, 86, 94, 99, 129, 137,
151, 156, 159, 171, 172, 179, 181, 184, 195, 206, 212, 221, 251, 254,
255, 260, 261, 262, 275, 298, 299, 300, 301, 303, 304, 313, 314, 316,
320
Competition, 41, 58, 62, 67, 68, 72, 116, 141, 149, 185, 223, 230, 239,
240, 288, 297
Computer, 69, 78, 83, 152, 181, 209, 264, 304, 309
Condorcet, 27, 165, 166, 169, 170, 173, 177, 178, 179, 180, 183
Congress, 15, 17, 130, 219, 235, 238, 279, 284
Congressional Budget Office, 97, 314
Constitution, 3, 12, 13, 14, 16, 18, 25, 26, 29, 30, 33, 35, 68, 85,
159, 160, 161, 162, 163, 165, 167, 168, 170, 171, 172, 206, 232, 256,
260, 271, 272, 277, 279, 288, 301, 304, 306, 313, 318
Consumer Price Index, 150, 218, 245, 246, 281
Cool, Th., 2, 289, 300
Council of Economic Advisers, 13, 14, 22, 24, 25, 68, 85, 110, 208,
251, 256, 282, 283, 284, 285, 286, 287, 288, 303
Cox, W.M., 232, 242, 243, 244, 245, 246, 314
Crouch, E.A.C., 197
Crowding out, 36, 122, 123, 126, 213, 236, 305
Csikszentmihalyi, M., 184
Cullis, J., 314
CWIRU, 84, 117, 118, 119, 120, 121, 122, 128, 135, 207, 218, 299, 305
D
Dahl, R., 314
Dam, M. van, 258
Danthine, 313
Darwin, Ch., 11, 78
Dasgupta, P., 12, 218, 231
Deficit, 25, 42, 67, 87, 92, 110, 113, 280, 285, 286
Definition & Reality, 3, 83, 85, 86, 198, 212, 277, 278, 306, 313
DeLong, H., 73, 314
Delors, J., 259
Depression, 3, 14, 17, 18, 19, 23, 24, 26, 30, 31, 34, 64, 66, 67, 156,
192, 224, 299, 307, 310, 317
Dewey, J., 269
Diamond, J., 184
Differential indexation, 43, 48, 56, 57, 62, 126, 132, 145, 236, 238,
305, 308
Dilnot, A., 247
Doel, J. van den,, 314
Don, F.J.H., 200, 251, 261, 314
Dopp, 314
Dornbusch, R., 13, 28, 87, 311, 314
Draper, D., 312
Drèze, J., 314
Driehuis, W., 150, 311, 315
Drissen, 207, 315
Duisenberg, W., 59, 98
Dukakis, M., 287
Dutch Disease, 149, 150
Dylan, B., 254
E
Earned Income Tax Credit, 248, 249, 250, 288, 293, 294, 295, 296, 297,
299
Eatwell, J., 196, 315, 321
Economic Supreme Court, 3, 11, 12, 14, 16, 22, 24, 25, 26, 28, 29, 31,
32, 33, 66, 72, 85, 97, 232, 234, 238, 256, 260, 264, 279, 280, 281,
288, 301, 306, 313
Economist, The, 12, 94, 130, 187, 321
Edgeworth-Bowley, 153, 189, 190, 191
Eenhoorn, 258
Ees, van, 318
Eijgenraam, C., 264
Eijk, van, 315
Eisenhower, I., 287
Enden, F. van den, 302
Epimenides, 173, 279
Equilibrium rate (ERU), 117, 118, 119
Erasmus MC, 261, 302
Erlang, 78
Euclid (geometry), 73, 75, 76, 279
Europe, 3, 18, 22, 23, 31, 35, 37, 38, 41, 45, 56, 58, 59, 60, 61, 62,
64, 66, 68, 97, 124, 125, 150, 156, 218, 220, 223, 229, 231, 234, 238,
239, 244, 246, 251, 258, 259, 260, 263, 270, 289, 303, 304, 306, 312,
313, 314, 318
Ewijk, C. van, 186, 187, 313
Executive, 3, 12, 16, 17, 25, 279, 282, 286, 287, 288, 303, 306
Exemption, 45, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 59, 62, 63,
82, 99, 108, 109, 124, 125, 126, 127, 128, 129, 130, 131, 133, 135,
137, 138, 139, 140, 141, 142, 143, 146, 202, 203, 204, 206, 215, 246,
272, 304, 305, 308, 309
F
Falsification, 72, 76, 77
Fase, M., 150, 311, 315
Federal Reserve Bank, 218, 237, 238, 281, 285, 316
Feldstein, M., 283
Ferguson, Th., 197, 315
Feynman, R., 315
Fischer, S., 13, 28, 40, 87, 94, 311, 312, 314
Fitoussi, J.-P., 247
Flanning, C., 14
Folmer, H., 264, 300
Fortuyn, W.S.P., 256, 257, 258, 259, 260, 262, 301, 302
Freeman, R., 124, 311, 315
Friedman, M., 40, 94, 121, 241, 315
G
Gainous, J., 160
Galbraith, James K., 26, 27, 98, 223, 232, 235, 236, 237, 238, 239,
240, 241, 242, 281, 315
Galbraith, John K., 260, 315, 319
Gambs, J., 267, 269, 315
Gastel, L. van, 264
Gelauff, G., 28, 94, 96, 97, 98, 135, 140, 241, 315
Gill, J., 160
Gill, R., 78, 80, 81, 194, 261, 311, 315
Gillingham, J., 259
Gladstone, 277
Globalisation, 31, 37, 42, 57, 58, 61, 62, 68, 221, 236, 239, 298
Gödel, K., 164
Gogh, Th. van, 302
Gogh, V. van, 253, 302
Gomarus, 78, 80
Gorbachev, 22
Gordon, R.J., 240, 321
Gore, A., 158, 178
Gould, S.J., 11, 86, 301, 315
Graaf, T. de, 257
Graafland, J., 14, 97, 155, 241, 315, 316
Grafstein, R., 316
Grandmont, J.-M., 14, 204, 316
Graybill, F., 315
Green, J., 165, 175, 318
Greenspan, A., 238
Groot, H.de, 99, 316
Guépin, J.P., 302
H
Hadjimichalakis, M., 237, 316
Hahn, F., 311
Halberstadt, V., 93, 320
Hall, R.E., 316
Hansen, 316, 317
Harrington, 319
Harrod, R., 19
Hartog, H. den, 150, 151, 311, 315, 316
Hayek, F., 26, 83, 232, 235, 276, 277, 278, 316
Hebden, J., 40
Heck, A., 264
Heilbroner, R., 12, 219, 220, 221, 227, 230, 231, 314, 316, 319
Heinlein, R., 186
Helliwell, 316
Hendry, D., 27, 316
Hersoug, T., 97, 155, 241, 316
Herwaarden, van, 98, 317
Hicks, J.R., 13, 14, 26, 32, 83, 93, 269, 316, 318
Hillier, F., 316
Hofstra, H., 56, 109, 316
Hornby, 193, 196, 316
Hotz, V.J., 247, 248, 249, 250
Hueting, R., 156, 218, 301, 316
Hughes Hallet, 311
Huizinga, F., 97, 155, 312, 316
Hulst, H. and A. Hulst, 252
Hulst, H. en A. Hulst, 137, 254, 261, 262, 264, 300, 301, 314, 316
Hum, 96, 317
I
Ierland, E. van, 156, 301, 311, 317
ILO, 219, 241, 318, 321
IMF, 22, 65, 304
India, 217, 218, 234
Inequality, 235, 236, 238, 239, 241, 242, 256
Inflation, 14, 18, 19, 27, 31, 36, 37, 38, 39, 40, 41, 42, 48, 49, 51,
52, 53, 55, 56, 57, 58, 59, 60, 61, 62, 63, 82, 89, 90, 91, 92, 96, 97,
104, 109, 115, 116, 117, 118, 119, 120, 121, 123, 125, 126, 127, 130,
132, 133, 139, 143, 144, 146, 198, 207, 218, 219, 223, 225, 229, 230,
237, 238, 239, 245, 272, 281, 288, 289, 299, 306, 307, 308, 309, 310,
313, 314, 316, 321
Institutions, 14, 26, 86, 126, 158, 207, 220, 232, 238, 262, 263, 270,
283, 286, 298, 305, 313, 316
Insurance, 93, 107, 110, 126, 127, 135, 238, 284, 301
Interest rate, 36, 92, 121, 223, 237, 281, 316
IS-LM, 11, 13, 14, 32, 84, 87, 89, 93
J
Jackman, R., 28, 94, 304, 318
Jacobs, D., 124, 317
Janus, 79, 80
Japan, 58, 62, 67, 69, 85, 198, 239, 307
Johansen, L., 160, 317
Johnson, H. G., 245, 317
Johnson, L.B., 245, 317
Johnston, J., 317
Jones, Ph., 314
Jongen, E.L.W., 97
Jorgenson, D., 161, 317
Jospin, 56
Judiciary, 16, 29
Jupp, 78, 311
K
Kalecki, M., 26
Kam, C. de, 98, 317
Kant, I., 163
Keizer, M., 317
Kennan, G., 68
Kennedy, D.M., 17, 19, 20, 23, 317
Keuzenkamp, H., 76, 99, 316, 317
Keynes, J.M., 3, 11, 13, 14, 15, 18, 19, 20, 26, 27, 28, 32, 33, 34,
59, 63, 66, 67, 83, 95, 96, 106, 107, 142, 156, 183, 192, 197, 208,
216, 218, 219, 224, 226, 239, 241, 268, 269, 270, 276, 277, 278, 301,
307, 310, 312, 316, 317, 319, 320, 322
Keynes, M., 19, 320
Klamer, A., 317
Klein, L., 227
Klerk, R. de, 320
Klever, W.N.A., 302
KNAW, 261
Knegtmans, P.J., 317
Knight, F., 196, 197
Knoester, A., 311, 317, 318
Köbben, A.J.F., 252
Kohl, H., 223
Kok, W., 56, 156, 256, 257, 258, 260, 262, 321
Komisar, J., 267, 269, 315
Koopmans, L., 112, 317
Korliras, P., 317
Kotlikoff, L., 94, 311
Koyck, L.M., 251
Kromhout, F., 264
Krueger, A., 297
Krugman, P., 13, 14, 27, 28, 29, 66, 67, 68, 98, 156, 192, 219, 220,
221, 222, 223, 224, 225, 227, 230, 231, 235, 236, 238, 242, 254, 255,
256, 281, 314, 315, 317
Kruiderink, 22
Kuhn, T., 78, 318
Kuipers, S., 318
Kuttner, R., 29
L
Laffer, 227, 318
Laidler, 318
Lakatos, I., 318
Lambert, P.J., 102, 318
Lawrence, 227, 314
Layard, R., 28, 41, 94, 96, 304, 311, 318
Le Bras, H., 302
Le Pen, 178, 257, 258
Le Play, F., 302
Legislative, 3, 12, 16, 279, 284, 306
Leontief, W., 318
Leube, 316
Levy, S., 264, 275
Lieberman, G., 316
Lincoln, 68
Lindbeck, A., 41, 304, 318
Lindblom, 314
Lissabon Strategy (EU), 157, 300
Lomborg, B., 301
Long, H., 23, 228
Lubbers, R., 256
Lucas, R., 27, 41, 121, 122, 208, 227, 318
Luce, 160, 318
Luenberger, D., 318
M
Madison, 113, 114, 174, 217
Magaziner, I., 98, 236
Mahony, D.O, 14
Majority, 182
Mäler, K.-G., 218, 314
Malinvaud, E., 313
Mankiw, N.G., 13, 15, 17, 27, 28, 94, 95, 216, 217, 218, 219, 237, 270,
318
Marcott, C., 34
Marginal rate, 45, 54, 55, 63, 69, 94, 96, 97, 98, 99, 126, 127, 128,
129, 137, 138, 140, 141, 142, 143, 145, 146, 147, 148, 157, 202, 203,
206, 217, 222, 223, 225, 301, 308, 309
Markowitz, H., 195
Marsden, M., 246
Marshall, A., 3, 11, 17, 33, 216, 266, 268, 318
Mas-colell, A., 175, 318
Maslow, 243
McCloskey, D.N., 184, 317, 318
McCrae, J., 247
Meade, J.E., 13, 318
Meidner, R., 150
Melkert, A., 257, 258, 262
Methodology, 3, 14, 15, 33, 70, 72, 82, 83, 85, 86, 198, 206, 212, 278,
301, 302, 304, 306
Michielsen, P., 68
Milberg, W., 219, 220, 221, 230, 316
Mill, J.S., 216, 268
Milosevic, S., 22
Minford, P., 94, 96, 318
Minimum wage, 37, 38, 41, 43, 44, 45, 46, 47, 48, 50, 52, 53, 56, 57,
58, 59, 60, 61, 69, 74, 84, 88, 99, 103, 104, 105, 106, 108, 109, 119,
120, 121, 122, 123, 124, 125, 126, 130, 131, 132, 133, 134, 135, 136,
137, 141, 145, 146, 148, 149, 151, 152, 155, 199, 200, 208, 219, 227,
236, 237, 247, 253, 262, 296, 297, 305, 306, 308, 313
Mirowski, 78, 318
Mitchell, W., 268
Monetarism, 26
Monopoly, 29, 72, 239, 281
Montesquieu, 16, 17, 21, 28, 34, 234, 270, 271, 306, 318
Mooij, R.A. de, 14, 97
Mudde, C., 258
Mueller, 28, 158, 171, 318
Muller, 315, 316, 318
Mundell, R., 15, 27, 227
Musgrave, 318
Mussolini, 258
Muysken, J., 318
N
Nádas, P., 260
Nader, R., 158, 178
Nafziger, E.W., 21, 318
NAIRU (_see_ CWIRU), 84, 116, 122, 226, 227, 229, 237, 240, 241, 299
Natural rate (_see_ NAIRU), 84, 121, 122, 218, 226, 241
Negative income tax (NIT), 138, 139
Nentjes, A., 318
Neubourg, C. de, 318
New Deal, 19
New Economy, 299, 300
Newton, I., 17, 175, 271
Nibbelink, A., 97
Nickell, S., 28, 41, 94, 253, 304, 318
Nieuwenhuis, A., 140
Nishiyama, 316
Nixon, R., 287
Noguchi, A., 264, 275, 319
North, R., 259
Nypels, 317
O
OECD, 23, 37, 42, 43, 48, 62, 63, 69, 85, 98, 120, 125, 126, 127, 130,
151, 155, 200, 224, 246, 247, 300, 303, 304, 307, 308, 309, 313, 319
Oers, F.M., 97
Oil crisis, 90, 149, 150
Okroi, L.J, 319
Okun, 40
Okun, A., 24, 94, 319
Oort, 98, 131
Oplatka, A., 68
Opstal, R. van, 319
Ormerod, P., 219, 220, 221, 228, 229, 314, 319
P
Palgrave, The New, 160, 171, 196, 315, 321
Palley, Th., 235, 319
Pareto, V., 21, 57, 74, 102, 162, 182, 183, 206, 212, 215, 220, 225,
232, 309
Parks, B., 264
Parliament, 25, 29, 33, 65, 85, 98, 183, 261, 279, 280, 286, 304
Patinkin, D., 95, 319
Pearce, D.W., 160, 314
Pearson, M., 247
Pechman, J.A., 319
Pelkmans, J., 319
Pen, J., 100, 319
Perry, G., 93
Phelps, E., 28, 40, 94, 121, 122, 219, 220, 221, 222, 224, 225, 226,
227, 229, 247, 314, 319
Phillips, A.W., 40, 41, 93, 99, 121, 125, 320
Phillipscurve, 14, 38, 40, 83, 84, 90, 91, 94, 96, 97, 106, 115, 118,
120, 122, 124, 198, 221, 225, 230, 305, 308
Pigou, C., 33, 34, 96, 109
Pikkemaat, A., 319
Piore, 208, 319
Ploeg, F. van der, 312, 317, 320
Plurality, 177, 178
Political Economy, 3, 11, 12, 13, 14, 26, 34, 82, 183, 184, 198, 212,
216, 222, 231, 235, 237, 252, 266, 267, 268, 270, 289, 301, 307, 309,
311, 312, 313
Popper, K., 76
Postma, R., 259, 260
Poverty, 3, 17, 18, 21, 26, 33, 34, 37, 38, 42, 45, 56, 57, 58, 60, 61,
62, 84, 124, 125, 185, 216, 217, 220, 227, 230, 234, 243, 244, 245,
246, 247, 253, 260, 264, 265, 272, 278, 293, 295, 296, 299, 305, 306,
307, 309, 316, 318
Praag, B. van, 93, 320
President, 13, 14, 24, 25, 29, 33, 59, 68, 85, 109, 143, 158, 180, 183,
245, 251, 253, 270, 279, 280, 282, 283, 284, 285, 286, 287, 288, 289,
293, 294, 295, 314, 321
Probability, 24, 65, 80, 81, 96, 104, 116, 194, 195, 197, 215, 315, 317
Productivity, 12, 27, 37, 41, 42, 58, 60, 61, 62, 63, 89, 93, 97, 99,
100, 102, 106, 107, 116, 123, 124, 125, 126, 129, 133, 134, 135, 138,
139, 145, 150, 153, 155, 156, 198, 200, 201, 204, 213, 218, 222, 223,
227, 239, 241, 246, 275, 298, 308, 309
Progression factor, 112, 113, 114, 127
Public Choice, 12, 14, 207, 250, 305, 318, 320
PvdA, 257, 258, 312, 322
Pythagoras, 72, 73, 74, 75, 76, 78
Q
Quah, 99, 100, 320
Queen, 215, 279
R
Raiffa, 160, 318
Random, 78, 79, 80, 81, 82, 85, 118, 215, 229
Rastogi, 318
Rational Expectations, 118, 121, 191, 208
Reagan, R., 143, 156, 227, 284, 299
Reijn, van, 320
Reuten, G., 320
Ricardian vice, 82
Rijken van Olst, H., 273, 320
RIVM, 261
Robbins, L., 186, 268, 269
Roebroek, 320
Roosevelt, F.D., 17, 19, 23, 234, 246, 299
Roscher, W., 268
Rosenmöller, P., 257, 258
Roskamp, 320
Rostow, W., 320
Russell, B., 164, 173
Rutten, F., 317, 320
S
Saari, D., 175, 177, 179, 180, 181
Sachs, J., 28, 93, 225, 227, 237, 312
Sala-i-Martin, X., 100, 311
Samuelson, P., 13, 14, 15, 255, 320
Saramago, J., 254, 256
Sargent, Th., 318
Scarpetta, S., 247
Schaaijk, M. van, 150, 151, 155, 206, 212, 298, 303, 320
Scholz, J.K., 247, 248, 249, 250
Schor, J., 108
Schrijver, 320
Schröder, G., 56
Schrödinger, 78, 81, 279
Schultze, 314
Schumpeter, A., 82
Schuyt, C., 320
Scitovsky, 311
SCP, 261, 320
Segers, H., 252
Sen, A., 13, 21, 22, 158, 160, 171, 172, 174, 175, 217, 218, 232, 233,
234, 235, 278, 320
Shapiro, C., 299, 320
Shone, R., 320
Shultz, G., 285, 287
Siebrand, J., 264
Simpson, 96, 317
Skidelsky, R., 13, 19, 20, 183, 276, 301, 320
Skinner, A., 17, 320
Slesnick, D., 245
Smith, A., 11, 17, 78, 99, 109, 184, 216, 232, 233, 234, 320
Snower, D., 41, 187, 225, 318
Social Security, 36, 93, 108, 110, 139, 154, 207, 208, 219, 232, 238,
285, 298, 315
Soest, A. van, 317
Solow, R., 83, 93, 109, 226, 317, 320, 321
Speth, J.G., 20
Stagflation, 3, 18, 24, 30, 31, 36, 38, 40, 57, 93, 94, 96, 97, 106,
120, 126, 128, 135, 157, 198, 224, 230, 235, 236, 242, 250, 306, 307,
308, 309, 310, 312, 316
Standing, G., 126, 175, 321
Stappershoef, E. van, 264
Statistics, 25, 38, 44, 79, 80, 81, 82, 86, 197, 214, 235, 243, 244,
245, 285, 287, 295, 311, 315
Steuart, J., 267, 268
Stevers, Th., 321
Stiglitz, J., 29, 288
Stiphout, H. van, 321
Stockman, D., 27, 67, 288
Subsistence, 45, 46, 49, 52, 59, 106, 107, 109, 154
Sudgen, R., 321
Sulloway, F., 33, 279, 301, 321
Summers, L., 287, 321
Suppes, P., 81
Swank, O., 321
Sweden, 198, 307, 321
SWF, Social Welfare Function, 79, 151, 152, 158, 162, 172, 188, 189,
190, 207, 209, 211, 212, 213, 215
Szenberg, M., 321
T
T[.], general tax function, 45, 49, 102, 109, 111, 112, 123, 125, 128,
140, 141, 142, 143, 199
Tajuddin, I., 321
Takayama, A., 321
Tax Void, 43, 47, 48, 51, 53, 83, 138, 139, 186, 305, 308
Tax[.], special nonlinear, 45, 129, 133, 134, 137, 142, 143
Technology, 12, 31, 37, 42, 57, 58, 61, 62, 104, 135, 176, 221, 227,
231, 236, 239, 242, 298, 299
Teigen, R., 314, 320, 321
Theeuwes, J., 96, 264, 321
Theil, H., 241, 251, 321
Thorn, R., 317
Throgmorton, 34, 321
Thurow, L., 231
Tinbergen, J., 15, 32, 33, 59, 63, 67, 83, 100, 208, 216, 221, 222,
224, 233, 250, 251, 252, 307, 310, 311, 312, 313, 317, 319, 320, 321
Tintner, G., 70, 76, 82, 321
Tobin, J., 41, 106, 107, 160, 170, 254, 321
Tocqueville, de, 277
Todd, E., 302
Trevithick , J., 322
Trias Politica, 12, 14, 16, 17, 20, 21, 24, 25, 28, 30, 35, 220, 224,
225, 230, 264, 279, 301, 306, 308, 313
Tullock, G., 14, 27, 321
Tyrväinen, T., 246
U
Unemployment, 3, 14, 15, 18, 19, 22, 23, 26, 27, 31, 34, 35, 36, 37,
38, 39, 41, 42, 43, 44, 47, 48, 53, 56, 57, 58, 60, 61, 62, 63, 64, 65,
66, 68, 70, 74, 80, 84, 86, 89, 90, 92, 93, 95, 96, 97, 98, 99, 103,
104, 105, 106, 109, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124,
125, 126, 133, 138, 139, 141, 149, 150, 151, 152, 155, 156, 186, 187,
198, 199, 200, 201, 203, 204, 205, 206, 207, 208, 211, 212, 213, 214,
218, 219, 220, 221, 225, 226, 227, 229, 230, 231, 234, 236, 237, 238,
239, 240, 241, 244, 247, 250, 251, 252, 253, 254, 256, 259, 262, 264,
285, 288, 289, 298, 299, 300, 301, 303, 304, 305, 307, 308, 309, 310,
312, 313, 314, 315, 316, 317, 318, 319, 320, 321
Uno, 321
US Federal Reserve Bank, 238, 285
US, USA, 3, 13, 14, 15, 17, 22, 23, 25, 27, 37, 38, 58, 61, 62, 67, 69,
98, 108, 110, 124, 125, 129, 158, 212, 218, 219, 231, 235, 236, 238,
239, 241, 242, 246, 248, 249, 251, 255, 279, 281, 282, 283, 288, 289,
297, 299, 303, 304, 305
V
Value Added Tax (VAT), 53, 54, 127, 135, 204, 308
Varian, H., 275, 299, 319, 320, 321
Veblen, Th., 268
Velthoven, B.C.J. van, 314, 321
Verdoorn, P.J., 251
Verkade, E., 320
Verkerk, D., 264
Visscher, G., 321
Volcker, P., 237, 285, 299
Vromans, M., 264
W
Walras, L., 202, 241, 277
Wanniski, J., 227
Weddepohl, H., 264
Wemelsfelder, 322
Whinston, M., 175, 318
Wilson, R., 197
Winden, F. van, 207, 315
Wolff, P. de, 251, 270
Wolfram, S., 264, 322
Wolfson, D., 322
Workswick, D., 322
World Bank, 65, 233, 304
Z
Zalm, G., 251, 258
Zijlstra, J., 320, 322
Zoon, C., 254
Zwan, A. van der, 150, 315
Zwezerijnen, 315, 316, 318
End notes
[1] Greek ‘oikos’ = ‘estate, house’, ‘nomos’ = ‘law, custom’ and
‘polis’ = ‘city, community’. The Dutch word for ‘political economy’ is
‘staathuishoudkunde’ - with ‘kunde’ = ‘theory and art’ and ‘huishouden’
= ‘home maintenance’ (with ‘huishoudster’ = ‘cleaning lady’). See
chapter 7 below and the appendix on the definition of ‘economics’.
[2] Gould (1980) recalls that Charles Darwin was also inspired by Adam
Smith.
[3] An example is the debate between Heilbroner and Dasgupta, see P.
Dasgupta (1998). Heilbroner regards ‘economics’ as Political Economy
only, and hence neglects the other fields of economics. Dasgupta
emphasises the validity of normal economics, and replies: “Economics
does not encompass the whole of the social and moral sciences.” His
argument apparently is that science arises from cutting up knowledge in
specific approaches. But this neglects the problem of integration.
[4] The Economist February 19 2000 (p74) gives a review of Mancur Olson
“Power and prosperity” (2000) that develops the same line of thought.
[5] Though I might remark that ‘management’ itself already implies some
influence of some people on others - it is a recipe for stress if there
would be responsibility but no influence.
[6] Holland: Centraal Planbureau (Central Planning Bureau, CPB),
France: Commissariat du Plan, Germany: Sachverständigenrat. The UK
apparently relies on the Treasury.
[7] Keynes here most likely borrowed Einsteins distinction between the
special and general theory of relativity. See also Skidelsky
(1992:487).
[8] Though see Hicks (1983:374).
[9] Remarkably, also the JEL codes have ‘Keynesian’ next to
‘neoclassical’.
[10] Vide Keynes’s very definition of ‘effective demand’: what
businesses expect to sell and thus are willing to currently produce,
after taking account of already available stocks. ‘Effective demand’
thus is another word for ‘production’. Key Keynesian is seeing
production as an expectational variable.
[11] It must be recalled that more economists in the early 1900s turned
from comparative statics to dynamics. A key figure is Tinbergen, who
used the calculus of variations in his thesis and who presented the
first macro-economic model that the world has seen (see e.g. Boumans
(1992) and Barten (1988)). It may be noted that Tinbergen’s first
national model does not contain a monetary sector. In a sense
understandable, since the model was for Holland, and Holland was on the
gold standard at that time, and we know - with Mundell, who refers to
Tinbergen’s ‘instrument argument’ - that monetary policy in that case
is ineffective. Anyway, Tinbergen clearly was more of a ‘real business
cycle’ analyst, while Keynes had the feeling for monetary issues.
Keynes’s approach appeared more important, primarily since money is a
generic policy instrument for the whole (world) economy.
[12] An illustrative example of the statics vs. dynamics issue, and of
the problems that economists continue to have in making this
distinction, is page 125 of Gregory Mankiw’s 1998 “Principles of
economics” edition. Concerning the payroll tax and the distribution of
its burden over firms and workers, and using a diagram of elastic
demand and supply, he states: “This division of the tax burden between
workers and firms does not depend on whether the government levies the
tax on workers, levies the tax on firms, or divides the tax equally
between the two groups.” Referring to a US Congress effort to allocate
the burden he concludes: “This example shows that the most basic lesson
of tax incidence is often overlooked in public debate.” Well, this
conclusion is only valid for the static analysis, but in dynamics, take
home pay is directly affected by regulations, while wage contracts are
adjusted by quite different bargaining processes. The US Congress may
well have taken a right decision for the medium run.
[13] I will take the position that definitions (and thus tautologies)
can be very important too. I tend to think that Samuelson in fact would
not disagree if the point would be formulated as such. Indeed,
Samuelson has remained more of a theorist himself, and is less known
for work on collecting data and estimation.
[14] Western economies suffer since the early 1970s from mass
unemployment and the threat of inflation. This bad mix of bad
ingredients is called “stagflation” for short. “Stagflation” in fact is
a concatenation of “stagnation” and “inflation”. The word was coined
around 1970 when national income growth stagnated and brought along
unemployment. Since then growth has somewhat recovered, and stagflation
has been redefined and now is properly understood as a bad ‘trade-off’
of both inflation and unemployment. See below.
[15] Note that Kennedy (1999) in his first six pages prominently refers
to Keynes (1919).
[16] UN-WIDER Press Release “40 International Experts and Scholars Meet
in Helsinki to Discuss the Wave of New Emergencies, 6 - 8 October 1996,
at Hotel Marski”.
[17] Interview with Kruiderink, “Progress ? No, it is a black hole.”
Volkskrant Oct. 16 1999
[18] Barro also discusses the relationship between the quality of the
US CEA and US growth.
[19]
http://europa.eu.int/comm/employment_social/employment_analysis/eie/
eie2004_stat_annex_en.pdf
[20] Participation is taken here as the employment rate (employment in
% of the population in the age bracket 15-64) plus the unemployment
rate (age 15+).
[21] Kennedy (1999:241) describes the threat of Huey Long: “Roosevelt
shared that assesment. ‘Long plans to be a candidate of the Hitler type
for the presidency in 1936,’ he told William E. Dodd, his ambassador to
Germany. ‘He thinks he will have a hundred votes in the Democratic
party and put in a reactionary Republican. That would bring the country
to such a state by 1940 that Long thinks he would be made dictator.
There are in fact some Southerners looking that way, and some
Progressives are drifting that way… Thus it is an ominous situation.’
[note] ” Also, the US already had a disputable policy with regards to
its Black population, and no doubt they could be made scapegoats like
the Jews in Europe.
[22] Hayek discussed ‘knowledge’ and ‘constitutional reform’, so that
the current line of thought is not alien to economics - though see the
appendix on Hayek.
[23] There exists still one matter to settle though. Krugman suggests
that Supply-siders were no serious economists. Similarly, Mankiw
(1998:29) calls it ‘fad economics’. But after they got their respective
Nobel Prizes, both Lucas and Mundell told the press that they were such
Supply-siders.
[24] The two major recent revisions in the US, the chained price index
and the redefinition of software as investment (and thus growth), are
just examples.
[25] If the Court would be scientific but would be only an island in an
ocean of neglect, the Court would already be an improvement over the
current situation - but less than optimally so. A wise parliament also
provides for funds for independent research bodies with related
objectives, that then will provide a critical working environment.
[26] The term ‘existing theory’ will be used in this volume for the
tradition of research and results indicated by these references. In
the light of the abundance of schools and attitudes it is a bit
difficult of course to apply that term. However, those who have studied
Krugman’s books and above references, should be senstive to this
suggestion. As a next step, I will present a novel analysis below, that
leaves much of existing economic theory intact, and only supplements
it with some ‘missing links’. With this supplement it becomes even
easier to recognise the ‘existing economics’.
[27] Note that this book quotes Keynes a lot, and in particular the 60
year old _General Theory_, and only refers to modern authors. Some
readers might find this out of balance. However, in the light of the
main argument, about the Trias Politica and the Economic Supreme Court,
I found it rather natural to proceed like this. I think that it
emphasises the enduring quality of economics per se. That, admittedly,
is a matter of taste.
[28] Robert Kuttner, “Peddling Krugman”, American Prospect, 9.96 gives
a nice example: “(…) Joseph Stiglitz, chair of the Council of Economic
Advisors and author of a recent report that, in very delicate wording,
computed that most newly created jobs were in occupations or industries
that had historically paid “above median wages.” This, of course, did
not mean that the newly created jobs actually paid above-median wages.
Stiglitz, threading his way between the administration’s need to paint
a rosy election-year picture and his own professional integrity,
allowed as much.” See http://members.home.net/copernicus/28kutt.html
[29] Note that labour could (actually should) be aggregated with wage
weights, but this normally isn’t done.
[30] Keynes and Tinbergen were both first-borns. Sulloway’s theory
suggests that Keynes’s General Theory is a ‘conservative revolution’.
It gave a theoretical base to existing ideas, helping save capitalism
from the communist threat. Similar for Tinbergen. Tinbergen’s brother
Nico had more radical ideas about ethology. Such interpretations are
hazy of course.
[31] With the necessary proviso that they will not easily sail over the
edge of the world.
[32] Taken from Craig Marcott’s site, who refers to Pigou (1932) “The
economics of welfare” 4th ed. Macmillan 1932; preface. His site is also
advisable for his applications of _Mathematica_ to economics:
http://milkweed.econ.stthomas.edu/~csmarcot/index.html.
[33] See chapter 34 on the notion of a ‘moral imperative’.
[34] This analysis is taken from Colignatus (1990a) and (1994a), and
since then more years have past. CPB researchers Broer c.s. (1999)
recently write: “The high level of unemployment in OECD Europe remains
one of the puzzles of empirical macroeconomics. (…) This is somewhat
surprising in view of the considerable policy effort that has been made
(…) ” See the OECD site: http://www.oecd.org around 1999-2000 contains
such data on stagnation and slow improvement. One assumes the same in
2004.
[35] Taxes in this book are generally inclusive of welfare state
premiums.
[36] Data: US Bureau of Labor Statistics and The Netherlands Central
Planning Bureau. The US is more useful here than Europe, since it has
consistent time series on a single economy.
[37] The Netherlands had a wage explosion in the early 1950s after a
period of wage restraints, but this still allowed a quick return
afterwards to the favourable lower left region.
[38] Data The Netherlands Central Planning Bureau. ‘Not working’
involves the Dutch programs ZW+AAW+WAO+IOAW+IOAZ+WW+Vorstverlet+ABW
(sick leave, disability from birth or later, workers and independents,
welfare relief and unemployment). Welfare relief was intended to be
temporary but can be permanent, for example for the 55+ workers who do
not have to apply for jobs any more.
[39] On p358 they discuss the Lucas supply function _y = _ (_p - p_*)
for GNP _y _and inflation _p_, and remark that this is also Lucas’s
explanation of the Phillipscurve. In chapter 10 they discuss some
‘useful models’, of which in p542-555 the Phillipscurve, starting out
with Tobin’s 1972 discussion of price and wage dynamics.
[40] The ‘insider-outsider theory’ (Lindbeck & Snower (1988)) has the
similar effect that the decisive group shifts the burden. But there the
emphasis is on union membership.
[41] Borjas also states: “(…) the demand for unskilled workers
declined perhaps because of technological change which favors skilled
workers or because of the internationalization of the U.S. economy.”
(p467)
[42] Of course, not all unemployment is caused by the minimum wage. The
25% in the graph is a result of simplifying assumptions. But it is an
acceptable presentation, since Dutch official statistics grossly
underestimate unemployment (and reduce the labour force).
[43] Money is denoted as _MX_. Perhaps unfortunate, but it keeps our
formulas readable.
[44] _B_ for Dutch “Bestaansminimum” (subsistence). English Basic Net
Income or Benefit.
[45] Relation (13.1b) gives the Bentham tax function, that has
exemption _x _and marginal rate _r. _We will write _Bentham_[_y_] for
the Bentham tax, _Tax_[_y_] for a special nonlinear function, and
_T_[_y_] for a general function.
[46] Welfare states commonly distinguish the minimum earning wage and
the minimum on benefit. In Holland the latter is 70% of the former,
thus some _S_ = 0.7 _B_. But then there are subsidies that apply to
people on benefit - and the poverty trap discussion starts. Here it
suffices to take _S _=_ B_. Chapter 39 deals with the argument in
reduced form fashion.
[47] In chapter 28 we will develop the formula for the influence of
indexation on minimum wage _M._
[48] This graph gives the theoretical values for the Dutch minimum
wage, if indexation since 1951 had been rigorously applied with
inflation for exemption and net average income for subsistence. The
actual minimum wage however was different, but within range. OECD
(2000:40) Chart 2.1 graphs the observed real minimum with 1975 = 100
with for example {1970, 77}, {1978, 108}, {1996, 85}.
[49] Common themes in tax theory are merit versus demerit goods and
that one would tax the less mobile factor labour rather than capital.
These themes have less priority than the tax void. The main reason that
remains for a VAT (or a profit tax) is that the government wants to
monitor the economic process.
[50] These are virtual subsidies only: while handed out, they are
immediately cashed in under the tax rule.
[51] Note the bureaucratic mind-set: There is a tax system and thus
people are supposed to pay taxes. Benefits are established at a net
level but are recalculated to a gross level so that the Ministry of
Finance is happy again that it can levy taxes. By consequence it also
seems as if much more is paid on benefits.
[52] In general http://econwpa.wustl.edu. More specifically Colignatus
(1996a, c) at http://econwpa.wustl.edu/months/get/9604.html, and
Colignatus (1998a) at
http://wueconb.wustl.edu/eprints/get/papers/9808/9808002.abs
[53] The OECD (1998) “Employment Outlook” Table 2.3 gives an
international comparison of the level of the minimum wage in relation
to the median wage. The situation in the Netherlands may be a yardstick
to interprete these data. The table shows that the minimum wage in the
Netherlands (in 1997) was 55.9% of full-time median earnings (excluding
overtime and bonusses). Applying that rate to the 2002 values in Table
3 gives an estimate of the 2002 median of € 27,975. However, the proper
subsistence wage should rather be € 12,516, i.e. net of taxes and
premiums. The ratio thus is rather 44.7% than 55.9%. The rate could
even be lower when we consider VAT and other taxes and the possibility
of some employment subsidy, so that 30% could well be attainable. With
this yardstick, the OECD levels of the minimum wage are strikingly
high.
[54] The analysis in chapter 13 holds in theory for full time workers.
In reality, only part of this Tax Void Unemployment will be on benefit,
since a part will substitute for part-time work (at a wage lower than
full-time subsistence). A practical question is also whether the tax
statute really must, and if so can, distinguish properly between
full-timers and part-timers. These questions need to be answered, and
definitely so when a practical run is done with a general equilibrium
model.
[55] This was actually developed in Colignatus (1992b, 1995a). Dutch
readers will benefit from Colignatus (1994b).
[56] See also the appendix on this book.
[57] This was known before, and in fact it is a good hypothesis that
much of Euclid’s geometric knowledge had already been developed in
ancient Egypt. The Greek contribution appears to be the notion of
‘proof’.
[58] Stephen Levinson - interview in NRC-Handelsblad, December 18 1999
[59] See also the appendix on this book.
[60] My understanding of quantum mechanics benefitted much from the
papers on the site of Richard Gill, at
http://www.math.uu.nl/people/gill/ and Gill (1996, 1997a & b), and
Barndorf-Nielsen, Gill and Jupp (1998).
[61] Rutherford seems to have said: “If you need statistics, then you
have the wrong model” (or something to this effect).
[62] Physicists might object to my use of the word ‘understanding’.
Their modern method is to describe the mechanism or process, and to
stay far from other ways of understanding. This is considered to be an
advancement compared to earlier methods, where they apparently lost a
lot of time trying to understand ‘force’ instead of simply modeling and
measuring. But if this is understood, there is no reason to avoid the
word ‘understanding’.
[63] See chapter 34 for deontic logic on this. Note that ‘God on Earth’
would be a situation of for some _T, _with _x_ the vector of
allocations to the agents, both observed and the optimal SWF point.
Since there is no objective SWF, the concept of eternal bliss hangs in
the air as well, though.
[64] There appears to exist a strange miscommunication between physics
and mathematics. Gill quotes Suppes: “For those familiar with the
applications of probability and mathematical statistics in mathematical
psychology or mathematical economics, it is surprising indeed to read
the treatements of probability even in the most respected texts of
quantum mechanics. ... What is surprising is that the level of
treatment in both terms of mathematical clarity and mathematical depth
is surprisingly low. Probability concepts have a strange and awkward
appearance in quantum mechanics, as if they had been brought within the
framework of the theory only as an afterthought and with apology for
their inclusion.” (P. Suppes, 1963). Gill suggests that this is still
the case in 1998.
[65] I would also advice quantum physicists (or journalists) to abstain
from gibberish descriptions of ‘quantum states’. A statement like
“Schrödinger’s cat is both alive and dead, or in a superposition of
life and death, and only collapses to either of these once you open the
box” is nonsense, basically already in terms of logic, but for certain
with the scientific predisposition to determinism.
[66] The NRC-Handelsblad April 4 2000 reports about research by Lene
Hau. The so-called Bose-Einstein Condensation arises at zero Kelvin:
when speed is zero, and thus is known, then apparently atoms ‘merge’
into ‘one amorf collective’, the BEC. Hau says that she can actually
see it, and she uses it to slow down light to human speeds. She
explains that her results are not statistical but ‘honest raw data’.
This approach seems on the right track.
[67] I found, to my surprise, that Hayek has a similar approach. See
the appendix on Hayek.
[68] The importance to recognise a ‘regime switch’ cannot be emphasised
enough. Perhaps the Edmund Burke statement can help here: “Though
nobody can draw a line between the boundaries of day and night, it is
still possible generally to distinguish light and dark fairly well.”
(quoted in Gould (1980) - translated back from the Dutch again).
[69] Real transfer income _TRF_ will later be taken as _B/P U_. In
practice there are also non-unemployment transfers.
[70] Later chapters will re-use _S _for some general supply function.
[71] Note that _M_ is the minimum wage. Our formulas are better
readable this way.
[72] Note that _Y _ is nominal GDP if _NX_ = 0.
[73] Then _LE_ follows from _LE = Y / W, _ and _KE _follows from {_LE,
YR _and the production function}, and _PK_ follows from {_KE _and _KE =
_(1_ - _ )_ Y / _(_i PK_)}.
[74] For example as follows. Regard _LE = Y / W _of above. Substitute
_Y = P YR,_ and rework: _P_ = (_W LE_) / (_ YR) = W _ if labour and
output are proportional.
[75] This means that causality runs from money to inflation, to
unemployment, to the wage.
[76] The short run is defined as the period in which there is no
capacity effect from investments on the stock of capital. After a year
there generally is such an effect. The medium run is about 5 years, and
the long run might be taken as 10 years or more.
[77] This relationship now is dropped from the model, however. While
Graafland & Huizinga (1999) include the marginal tax rate, Broer c.s.
(1999) don’t, and only use the average tax rate. From a personal
conversation with Broer, I understand that this is because their
relationship is to be used in a smaller model that will be used for
policy simulations (and that has to drop some variables in order to be
smaller). This again shows that some choices can be irrational even
though circumstances may make them seem rational.
[78] (I) Professor Oort is indeed related to the discoverer of the
astronomical “Oort cloud”. Perhaps we might speak about an “Oort Cloud”
in economics too: big misconceptions and misunderstandings flying about
in professorial minds, occasionally hitting Earth to great disaster.
(II) A member of the Oort commission was professor dr. C.A. (Flip) de
Kam, who was also an assistant to the social-democratic fraction in
Parliament at the time of the ‘Duisenberg Disaster’, see chapter 14.
Around 1997 we had a chat, and he still didn’t understand the issue -
and thus it doesn’t help to explain it. De Kam is now at the OECD, it
seems in an important position. I highly appreciate some his work, like
De Kam & Van Herwaarden (1989), and I regret his misunderstanding.
Should he once understand it, he would become a welcome and powerful
ally in explaining matters to a larger audience. Still, De Kam’s
omnipresence reminds one of Ira Magaziner’s, vide Barro (1996:xii),
Krugman (1994b:298) and Galbraith (1998:201), to apparently similar
destructive effect.
[79] We don’t perform a statistical test though. We just plot these
graphs, and are satisfied by a rough lognormal approximation. For real
tax experiments, we would use the original income class data.
[80] Lambert (1985:31) mentions that a Pareto distribution - close to
the lognormal - has a nice property with regards to taxes. This should
be investigated.
[81] An alternative interpretation of _ms _and _md _is to take them as
the minimal levels for which the density shows positive values. The
table then remains the same - though of course with a different
interpretation.
[82] Borjas (1996:167) notes that the US minimum wage may have a
noncompliance of 40%.
[83] From discussion with others I understand that Juliet Schor has
made an issue of the high Dutch percentage of parttime work, presenting
it as a social advancement. It likelier comes from the distortions of
the tax system and social laws that force people into less working
hours and lower wages. I have not read Schor, so my comment here is
only a hypothesis, something to be surely checked.
[84] See Barro (1996:96-98) for some entertaining pages. That chapter
also throws some useful light on the US CEA. Curious his statement
however: “(…) we are still waiting for the first sighting of the
Keynesian demand multiplier.” (p111), i.e. curious in the light of the
structure of macro-economic models.
[85] This indeed seems to be happening in Holland 1990-2005.
[86] I have considered to use the word ‘stable’ instead of ‘constant’,
as so many authors write ‘stable inflation’. But again, as
‘accelerating inflation’ is not correct, so is ‘stable’ not correct. A
constant rate of inflation can be the only constant in a sea of
instability. To allow for a later definition of a ‘stable rate’, it is
advisable to pronounce CIRU and CWIRU as KIRU and KWIRU, and not as
SIRU and SWIRU.
[87] In a dynamic setting _u_[-1] will have a greater weight. The
equation used here can be regarded to some extent as a longer run
relation.
[88] Use _* = _, solve (28.2) for _f_[_u_] and solve (28.3) for
_f_[E[_u_]]; and the rhs’s are equal.
[89] Remember that _ = * _in the final equation, and then use (28.1).
[90] Conceivably even, the government uses its instruments such as to
create some surprise element deliberately. However, a statement like
this is a typical result of modeling. Reality is full of surprises, so
the need for governments to create some more does not seem realistic.
The literature on ‘credibility’ similarly has a high academic content.
[91] Which is a nice spot to again emphasise the limitations of the
linear assumption.
[92] In empirical analysis we might approximate demand by next period’s
employment, but then we must be aware that this already includes some
crowding out effect.
[93] Please be aware of the intellectual risk that I am taking here: I
only know (a) the Dutch situation, (b) the OECD (1986) report on
indexation practices, (c) that European minimum wages are quite high
and that the US has more poverty. The rest is a matter of logic and
economics. From this I forecast the foreign situations and these
stylized facts: and it will be fun to hear others confirm these.
[94] Chapter 27 uses _q _for natural public goods, but for lack of
symbols we re-employ _q _here.
[95] See the note above on the Oort Commission: They created this;
though many Dutch nowadays think that it has been around ‘forever’.
[96] In terms of Table 7, we now interprete _ms _and _md_ as the first
values for which the densities have a positive value. Note: we need not
add that _M _ 0 since obviously _B _ 0.
[97] Proponents for the NIT generally don’t understand that home
partners _produce_ something, and could be taxed for that.
[98] My thoughts this were stimulated by Ate Nieuwenhuis’s research on
oligopoly.
[99] Note that this ‘dynamic _M’_ concept differs from the ‘dynamic
marginal’ concept. Note too that these concepts are only defined for
_M_.
[100] Holland provides an empirical example. The real wage index rose
from 1 in 1950 to 3.7 in 1980, and has been stagnant since then. But
there have been tax reductions since 1990.
[101] It is to be noted though that director C.A. van den Beld read
about the vintage approach in a German article, and asked Den Hartog to
further investigate it, already in the years before. The model choice
was not propelled by the Oil Crises, and, indeed, the theoretical link
is weak - if not to say ‘nonexistent’.
[102] Higher fuel costs also translated into a higher CPI and thus
higher wage demands, giving another reason to be worried about wage
costs. But this is another chain of reasoning.
[103] Much of the wage of high salaried persons will derive from custom
and bargaining skill, but there will also be a serious part
‘productivity’.
[104] It is essential to read Hueting (1980) and Van Ierland et al.
(2001) for a proper understanding of the issue of growth.
[105] Vide the ‘proof of God’ paragraph in chapter 19.
[106] This is not without problem, since there are many logics, such as
standard, threevalued, fuzzy, intuitionistic logic, and my own scheme
of ‘the logic of exceptions’ (that I use to solve the liar paradox, and
Russells and Gödels problems). However, here it suffices to presume
standard logic. Note that the earlier version of this chapter (article)
used a ‘quantor free logic’, where the use of a _variable_ indicates
the ‘for all’ quantor, and a _constant _indicates the ‘there is’
quantor. A subtlety is that this distinguishes between “Not _p_ _q_”,
that is equivalent to “_p_0 & ~_q_0”, and “~(_p_ _q_)”, that is
equivalent to “_p_ & ~_q_”.
[107] If we were to put the question to Arrow, my bet is that he likely
prefers incompleteness to inconsistency.
[108] That there should be at least 3 topics is actually an axiom that
we have taken for granted.
[109] Discussion (evaluation and thus eventual publication) of (1990c)
was blocked by the CPB directorate with the comment ‘this issue exceeds
the CPB intelligence’ - which was inconsistent since I worked there.
The EER referee reports of (1997b) are nonsense too.
[110] Thus there is a subtle distinction between:
(A) _The risk,_ that is single (i.e. non-plural), and gives the
expected value of the valued risks
(B) _The risks,_ that thus is plural and gives the list of the the
_oi_ that are losses. For a single outcome, we would have the
difference between _o_ and {_o_} (element and singleton). With a list
of outcomes _O_ = {_o1, o2, ..., on_} we also have lists of prices _P_
= {_P1, P2, ..., Pn_}, and probabilities _Pr_ = {_p1, p2, ..., pn_},
and a utility function _u_. (Continued next page.)
The money valued risks are _X_ = {_x1, x2, ..., xn_} = _O * P_ = {_ P1
o1, _, ..., _Pn on_}.
The utility valued risks are _U_ = {_ u_(_o1_)_,_ .., _ u_(_on_)}. The
expression _U*_ = _u_(_o1_, .., _on_ ) is less appropriate since the
outcomes are mutually exclusive. However, since one might consider
cases where one has some utility about ‘the whole situation’, the _U*_
might still be useful.
[111] Thus stands for the expected value and for the standard
deviation (spread), and the risk. Then, use _R_ for the coefficient
of correlation. Note that the use of ‘spread’ facilitates translation
from learned journals to popular audiences that are less familiar with
‘standard deviation’. Authors that use the word ‘spread’ for the
difference between a futures and a spot price, should relabel to ‘time
premium’.
[112] In a personal discussion, Richard Gill (University Utrecht, KNAW)
had doubts about my shorthand notation, and preferred E[_x_ *
_Ix_<0[_x_]] where _IA_[_x_] is the indicator function with value 1 if
_x A_ and 0 else. Gill’s notation no doubt increases definitory
clarity, but the shorthand is not bad and has the advantage of being
short.
[113] Alternatively, relative risk can be seen as proportional to
another level. What is important in the present discussion is the
distinction with conditional risk.
[114] For (relative) risk we don’t want to use the conditional
distributions. For example, if there would be a small loss with a small
probability _p_, the conditional might turn this in a large ‘risk’,
since 1/_p _is would be a large number. So for risk we have a proper
measure in the ‘probable value’ (loss * probability).
Risk is concerned with one’s _worry_ that bad information _might_
arrive while it may not arrive. The conditional applies only if indeed
new information arrives that the returns will remain below that target
level. (Though the conditional might remain hypothetical.)
[115] If people would work on welfare, we would speak about workfare.
Workfare generally is more efficient, since people on benefit will not
have the utility of idleness.
[116] In a purely mathematical tract, the Lemma would be the theorem,
and the Theorem would be a corrollary.
[117] This is a strong claim of course. Policy makers are overloaded
with data, and they have a hard time turning this into information. But
this is often used as a cheap excuse too. They say ‘I didn’t know’
while they should have said ‘I hired an assistant who knew that he had
to keep sensitive information from me so that I could later say ‘I
didn’t know’.’ The crux of the argument is that policy makers are
responsible, by definition, for structuring the information process
such that they know the relevant facts. It is up to the jury whether
they can be excused for real human mistakes and external errors.
[118] This is a crucial part of the Definition & Reality methodology.
In mathematical economics the theorems depend on axioms that are only
hypothetical. In Political Economy that concerns reality, we also
accept facts. On availability, see also the appendix on the
presentation of the analysis for the US National Press in Washington
1993.
[119] If ‘animal spirits’ is not properly explained, it generates
confusion. As this confusion exists, perhaps I need to provide this
explanation here as well: Medieval philosophy distinguished between
dead matter, plants and objects with a spirit - and the Latin word for
spirit/mind is ‘animus’. So Keynes’s reference is not to wild beasts,
though Mankiw suggests such with his mention of ‘irrationality’ and
‘arbitrary changes in attitude’. As I understand it, Keynes entertains
the consideration that beings with a mind by definition develop
conceptions about reality, and act and take decisions in a state of
uncertainty.
[120] Krugman though allows for a temporary adverse development in
technology. This chapter was basically written as the paper Colignatus
(1997a), and since then Krugman has seen more scope for the technology
argument.
[121] I can understand your misgivings about having to read five books
before allowed to continue. Personally, I already knew most of what
Krugman is writing about, and this may also be the case for you. But it
was a useful refresher, lots of fun reading, and when everybody reads
them then there is some common ground.
[122] That is, most economists don’t know yet, but I do, and thus ‘the
economics profession’ knows it. In the same way, if a murderer knows
that someone in the room knows that he is the villain, he is tempted to
kill all in the room. This someone is going to tell !
[123] It is good to see that James Galbraith (1998) takes up this issue
too. See below.
[124] Note that the reason why I am quite certain about my own approach
is that I have given a mathematical theorem and proof based upon
readily acceptable premisses. I also use a reduced form, but, deduction
beats econometric testing.
[125] In 1997 I also wrote “(…bargaining…) has more to do with the
level of wages than the (inflationary) rate of change.” I have to
retract that statement. I temporarily forgot my very own analysis on
the Phillipscurve ! Yes, I must have been irritated.
[126] And indeed, it must be feared that mainstream economists will not
be interested much in inequality, so that they will also miss out on
the interesting ‘tract’. We may presume, however, that Galbraith will
take another occasion to repair that error.
[127] Palley is assistant director of Public Policy for the AFL-CIO,
and author of a book “Plenty of Nothing”, that I have not read yet but
that seems like a good buy.
[128] Galbraith does not refer to Bruno & Sachs (1985), but it is
useful to note that this B&S analysis would be a major part for the
explanations of the ordeal in the 1970s - which analysis apparently was
insufficiently understood by Carter and Volcker. Also, a reference for
the Volcker years is Hadjimichalakis (1984).
[129] Also Paul Krugman remarks, and expresses regret, that many of the
poor become the victims of the Fed’s anti-inflation policy: but he
doesn’t add that policy can be different.
[130] In May 2004 my employment concerned a cost-effectiveness analysis
of population based screening for cervical cancer and its precursors:
which indicates the job flexibility required.
[131] There were problems of bankruptcy of the distributer Gopher
Publishers during most of 2003-2004, though interested readers could
get the PDF of DRGTPE from my website.
[132] Saramago’s new book speaks about a town where 83% of the
population decides, silently and without any voiced protests, to vote a
blank. The number 83% is a masterly stroke since it sounds much more
realistic than 80% or 75% or 51%. But, is there any link with Fortuyn’s
17% result or is it just coincidence ?
[133] “niet gewoon rechts, maar extreem rechts”
[134] “Hij gaat een grens over die je niet mag passeren. Nederland,
word wakker !” and “Je wordt wakker, en je ziet Le Pen. Je wordt wakker
en je ziet Fortuyn.”
[135] “een gevaarlijk man”
[136] “het leiderstype-Mussolini”
[137] “buitengewoon minderwaardig mens”
[138] “haat en tweedracht te zaaien”
[139] “(…) kan worden gedocumenteerd dat Fortuyn door politici als
Melkert, Rosenmöller en Zalm werd gedemoniseerd.”
[140] In the same way, Tony Blair had his responsibility of leadership
towards Iraq. Where Blair saw danger, he was right to warn for it and
take some action. But Blair said “there are WMD” while he should have
said “I wholeheartedly believe that there are or will be WMD, even
though the current evidence shows there aren’t and will not likely be
there in the future as well”.
[141] A theory laden question, since in Marx’s original theory
socialism required internationalism, while it was the ‘great theorist’
Lenin who dropped that, creating ‘Marxist-Leninism’.
[142] A recent paradox of greater fun is that Queen Beatrix, Dutch Head
of State and Head of the Dutch government, recently stated: “The lie
governs.” She thought of newspapers and obviously did not intend to
refer to herself, but her choice of words allow this interpretation.
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To professor Michael S. Hart
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Concerning: grant of rights
March 2 2005
Dear Project Gutenberg,
I am the sole copyright holder for the book: Thomas Colignatus,
"Definition & Reality in the General Theory of Political Economy", 2nd
edition, Dutch University Press, January 2005, ISBN 90-3619-172-6.
Please note that "Colignatus" is my preferred name in science. It gives
me pleasure to grant Project Gutenberg perpetual, worldwide,
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format of the text under those conditions may also be referred to as
the "etext" format.
People might remove this header. Since I want to place additional
restrictions (such as no commercial use or resale), I follow your
advice of putting these at the start of the etext as well. Included in
the etext are these additional conditions:
"This text is made available by the copyright owner as an etext for the
Project Gutenberg. The PG header specifies under what conditions the
book may be distributed while associated with the Project Gutenberg
trademark. Additional conditions are: (a) No commercial use or resale
of the etext is allowed, (b) Hardcopy prints are to be acquired at the
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designated partners. Please note that the etext uses RTF so that the
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Allow me to express my compliments to you and all the volunteers for
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Yours sincerely,
Thomas H.A.M. Cool (Thomas Colignatus)
Scheveningen, The Netherlands
http://www.dataweb.nl/~cool
cc. Mr. Auke van der Berg
Dutch University Press / Rozenberg Publishers / Thela Thesis
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Book Cover Text
ECONOMICS – POLITICS – LAW
This book explains why the world economy enjoyed a golden period in the
years 1950-1970 and what went wrong since then. Europe in 2005 has a
(hidden) unemployment of 10% and relies on an extensive benefit system
to prevent poverty. The US has less unemployment but at the price of
more poverty – making Europe reluctant to adopt that model. The world
as a whole is a political and economic mess with much and extreme human
suffering. Policymakers explain developments by causes such as
globalisation, technology and welfare state sclerosis. Those
explanations are not convincing however since trade and technology are
sources for welfare, while the only answer to poverty is a well managed
welfare state. This book provides an explanation based upon a new
approach.
When democracies fail to care for their citizens, the cause must be
looked for in the political system. The cause for the present failure
can be found in the Trias Politica structure of national decision
making – the separation of powers of the Executive, Legislative and
Judiciary branches of government. This structure gives too much room
for political elites and bureaucrats to neglect the basic rights of the
population at large. This approach provides an extension and follow-up
to the "General Theory" of John Maynard Keynes. Inclusion of economic
decision making into the analysis gives a truly General Theory of
Political Economy. The theory shows that a constitutional amendment for
an Economic Supreme Court is required – for logical reasons, for the
experience of the whole 20th century, and for an actual improvement of
real democracy which is so much needed for the 21st century.
An example of the policy failure is the curious phenomenon of the Tax
Void. The tax void is the income range between the net and gross
minimum wage. Since people may not work below the gross minimum, those
affected don’t earn income and don’t pay taxes. The taxman intends to
collect taxes in that range, but since there are no earnings there, he
doesn’t collect anything. The tax code only drives up the gross minimum
wage, causing unemployment and the associated benefit burden.
Abolishing that tax code would, since there are no revenues, not cost
anything either – and create jobs. During 1950-1970 net minimum wage
workers were hardly taxed and such taxes were gradually introduced.
Policy makers have been oblivious to this issue and have actually been
neglecting sound economic advice on it.
Historical description of the last decades – Novel contributions to
economics, politics and law – Mathematical theorems and proofs –
Empirical data and charts – Explanations for a larger public – Solution
to Arrow’s Theorem on social choice – Methodological exposition –
Results related to other authors.
Colignatus is the scientific name of Thomas Cool (1954), an
econometrician who has worked at the Dutch Central Planning Bureau
(CPB) where he developed this theory. He has an extensive web site at
http://www.dataweb.nl/~cool. The discussion in this book can be
combined with his _Mathematica_ software, available on that site.
Dutch University Press
ISBN 90-3619-172-6