Volume 55, Number 2, avril–juin 1979

EN:

A conceptual framework is provided by the "states of the world" approach (reviewed in section 1). The powerful normative analysis of individual decision-making under uncertainty extends the theory of consumer choice under certainty into an adequate specification of individual norms of behavior (section 2). But the link with observable market phenomena would require the existence of a complete set of insurance markets, one for every commodity conditionally on every state of the world. Although some disagreement persists on this point, the author feels that the insurance and asset markets which exist in western economies fall substantially short of offering trading opportunities comparable to those implied by a complete set of insurance markets. Consequently, consumer preferences are incompletely revealed by market prices. And business firms lack the information required to reach decisions by mere arithmetic comparisons of alternative profit levels (section 3). Management under uncertainty and incomplete markets acquires genuine significance. What norms of managerial behavior should be assumed for positive economic analysis is a disputed issue. From a normative viewpoint, managerial decisions must be viewed as group decisions, with consequences affecting many individuals—and the theory of such decisions is by necessity more complex (section 4).

Deprived of the powerful clarification introduced by the competitive markets lamppost, the economic analysis of uncertainty must fall back on the elementary principle that all risks are ultimately borne by the individual economic agents, in their triple capacity as consumers, workers and investors. Alternative policies by firm managers or public officials must be evaluated in terms of their consequence for individuals on these three levels. The absence of market references and of reliable positive models causes difficulties in eliciting these consequences. A major concern of policy makers should be to understand better what forms of uncertainty are most costly to bear for individuals, so as to design institutions and policies aimed at transforming these into less costly alternatives (section 5).

EN:

Samuelson's statement about Marx being a minor post-Ricardian from the viewpoint of pure economic theory leaves one perplexed. Is theoretical welfare economics a part of pure economic theory? This paper shows that theoretical welfare economics is the foundation of the theory of economic policy and intervention. Marx also sets forth a theory of intervention based on economic arguments. Therefore, Marx should be studied within the broader scope of theoretical welfare economics. Moreover, Marx's system contains not only analytical devices but also important value judgments and the theory of welfare economics aims to study the interrelations between value judgments and economic interventions. Methodological contradictions are shown in, and removed from, the theory of welfare economics in order to show the framework of Marx's entire system. The system as a whole is far beyond the realm of Ricardian economics, for it can be consistent and scientific although it contains value judgments. Samuelson's narrow approach and fuzziness in the methodological foundations of welfare economics hindered an appreciation of the full value of Marx's approach.

EN:

In this article we want to verify if Bank of Canada's actions on the availability of credit were efficient from 1967 to 1976. During this period, the interest rate was chiefly used to maintain balance of payments equilibrium and the Bank of Canada was trying to affect internal credit conditions (here banks' loans) through its effect on the chartered banks' liquid asset ratio. However, this ratio is an imperfect indicator of the availability of banks' credit. Chartered banks have in fact many techniques to obtain liquidities: the whole of these constitutes their liability management mechanism. By this way, they can immune themselves from a restrictive monetary policy which operates via the liquid asset ratio. The degree of accommodation of loans is also another factor to consider when studying the impact of the Bank of Canada on banks' loans. It is evident that a high degree of accommodation of loans is a serious obstacle to monetary policy: liquidity management is probably pushed very far in this case. Our theoretical model takes into account these considerations. And the estimation of this model shows that loans have little reacted to Bank of Canada's actions. The degree of loans accommodation was high and consequently banks checked the Bank of Canada's policy by their liquidity management mechanism.

EN:

The aim of the study is to explain Quebec major credit union's deposit market by way of integrating its public demand function with the institution's rate-setting operation. The demand for Caisses' deposits is specified as a dynamic stock adjustment model. On the other hand, the intermediary's rate-setting reduced form is derived from a risk-return portfolio balance model in which the managers maximize the expected utility of reserves. The two models are integrated by means of a liability composite rate.

Econometric estimates of the integrated model provide us with interesting policy insights. For instance, the Quebecois public views chartered banks' deposits as a weak substitute for Caisses' deposits; it is also more responsive to nonrate arguments, such as loan eligibility or the institution's ethnic appeal. On the supply side, competitive liability rates are more important than returns on assets when the Caisses set its deposit rate. Finally, the impact growth imbalance between loans and deposits is well captured by a flow variable, without infringing on the steady determination based on rates.

EN:

This study attempts to estimate the productivity of inputs to Quebec agriculture. It makes use of two Cobb-Douglas production functions: one aggregate, for Quebec as a whole, and the other regional, covering the farming regions 04 and 11, using 1976 data. From the results obtained, marginal productivities of inputs and returns to scale are determined and interpreted. The principal conclusions of this research are: while returns to scale are increasing for Quebec in general, they are constant for the regions 04 and 11. It ensues that, if there is no breakthrough in technology, there is no reason to change the scale of agricultural production in regions 04 and 11; the productivity of machinery is higher in Quebec than in the regions 04 and 11; livestock productivity is high everywhere; as for land and buildings and other inputs, their productivities are low in Quebec as well as in the farming regions 04 and 11. With respect to labor, its productivity is quite high in Quebec and in the regions 04 and 11. However, labor productivity in region 04 is superior to that in region 11.

EN:

In this paper, the author describes and criticizes the theory of non-competitive groups.

According to this theory, the non-competitivity of social groups refers to the existence and the reproduction by heredity of a bi-univocal correspondence between the hierarchy of social groups and the hierarchy of employments. Such a relation comes from the fact that the social origins determine the level of education, the distribution of inborn qualities, and the preference functions of individuals. It is also the result of the demographic reproduction pattern of social groups. In such conditions, the incomes hierarchy is the result as well as the means of the hereditary reproduction of social structure and of non-competitivity.

Two basic criticisms can be formulated. First, this theory is unable to justify most of the relation underlying the analysis. Second, the proposed explanation model is unable to account for the contemporary ways of non-competitivity such as indicated by the statistics on social mobility.