Lise Salvas-Bronsard and Pierre-Yvon Ouellet

pp. 299–321

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Abstract
The object of this paper is twofold: 1) to introduce the disaggregated legal tax rates into a macroeconometric model containing disaggregated marginal propensities to consume; 2) to simulate variations of tax rates in order to study the relative efficiency of individual tax rates for economic stabilization and to look at the stability of the model with respect to the progressivity of these tax rates.

J. D. May and M. Denny

pp. 322–336

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Abstract
The purpose of this paper is to establish a relation between the empirical estimates of productivity and technical change. Few studies have tended to give estimates of that relation. The measuring of productivity involves the use of an implicit production function. Moreover, measures of productivity are estimates of the rates of change of Hicks-neutral technical change.The paper suggests that non-sophisticated measures of technical change may be replaced since they offer inadequate description of temporal change in technology. Finally, it would be useful to continue to develop econometrics models of technical change.

Clément Lemelin and Jean-Claude Otis

pp. 337–354

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Abstract
In their choice of a field of study, students are assumed by the "neoclassical" theory to be rational, well informed, flexible, and to react to changes in monetary variables. Data from a survey are used to show that students are economic men and women only in a weak sense: 1) they appear to be more interested in job availabilities and other job characteristics than in earnings associated with a particular field of study; 2) if their information can be said to be good with respect to forgone earnings and starting earnings of their chosen occupation such is not the case with respect to future earnings; 3) however, their expected rates of return on their studies seem plausible and show all the usual properties of rates of return derived from more conventional computations.

Abraham Assayag and Yves Rabeau

pp. 355–362

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Abstract
The provincial decree applying to the construction industry in Quebec has created a situation of bilateral monopoly in that segment of the labor market (unions on the supply side and entrepreneurs on the demand side). If negotiations are undertaken at a time where business conditions are booming, then the unions have a very powerful negotiating power. Since contracts are signed for a three year period, wage increases do not afterwards reflect market conditions. Since wages are fixed by the provincial decree, there is then a quantity adjustment in the construction sector. In this paper, we have specified and estimated a model that allows us to measure the bilateral monopoly impact of wage increases and to compute quantity adjustments in the construction market. It is shown then that the provincial decree adversily affects the competition position of the construction industry in Quebec and that restauring this position involves a severe recession in the construction industry.

Monique Frappier-Desrochers, Ieuan Morgan and Louise Ouellet

pp. 363–375

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Abstract
In this paper, we compare three methods presently used to split up the Gini index in order to evaluate the contribution of one particular factor (for example, age) to the value of this index: the B-M-P decomposition*, Paglin's measures and Love & Wolfson indexes. The problem with the decomposition of the Gini index is that it is impossible to cut it in two parts, one, representing the value of inequality attributable to the factor analysed and the second, inequality due to other factors. We also have to include the value of overlaps. This is clearly shown by Bhattacharya and Mahalanobis.By using a very simple example for which we can forecast the results, we can compare the reaction registered by each method when we introduce a change in the distribution of income and consequently evaluate the lightness of these methods. We confirmed our convictions by decomposing two other measures which can be separated in the two parts mentioned above: Theil's entropy and the square of the coefficient of variation.We conclude that the indexes used in the B-M-P decomposition are exact. Paglin's age-Gini index is accurate, but not his residue, the Paglin-Gini's index. And, Love and Wolfson's index did not behaved as expected to our modifications.We also showed, by using the B-M-P decomposition, that overlaps is an important component. Finally, we noted that our indexes changed in value when we changed the number of groups analysed (example: if, to analyse the effect of age we divide our population into 5 or 10 age groups). So, it is important in a longitudinal study always to use the same group definitions to obtain comparable results.* Bhattacharya, Mahalanobis and Pyratt.

F. R. Casas

pp. 376–383

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Abstract
In the framework of a two-good, two-factor model it is evident that the pattern of trade can be inferred from the change in commodity prices resulting from the opening of trade. Thus, if trade increases the relative price of a commodity, we expect that commodity to be exported, while the good whose relative price decreases will be imported.Under certain circumstances however, it may be possible to observe a country importing a commodity even though its free trade relative price is higher than under autarky.The purpose of this paper is to point out that a similar paradox can be established even if we rule out distributional effects of changes in commodity prices on the demand for goods attributable to different tastes. In particular, we focus our attention on a simple three-good, two-factor model with fixed production coefficients. It is well known that when the number of goods exceeds the numbers of factors, a basic indeterminacy exists in the relationship between output levels and relative commodity prices. Our interest lies in establishing that one application of this indeterminacy is that technological characteristics—in particular, the factor intensity ranking of commodities and a country's factor endowment—may result in the reversal of the expected pattern of trade.

Raymond Théoret

pp. 384–401

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Abstract
This paper reviews the principal theories on disequilibrium, from Walras to Barro and Grossman. There is a certain tendency in most of these theories to consider equilibrium and disequilibrium as independent phenomenons: at the end of a disequilibrium period, equilibrium in the neoclassical sense reappears, i.e. a paretian optimum. Disequilibrium is at most an adjustment period. But Glower is opposed to this methodology. Equilibrium periods are very influenced by preceding disequilibrium periods. For example, Clower considers unemployment as a situation of equilibrium. This is a nonsense for a neoclassical economist for whom equilibrium is an ideal state. Clower attacks veritably the traditional economic analysis which attributes to the equilibrium of perfect competition certain ideal properties. Finally, we emphasize that the theory of disequilibrium may arrive to explain stagflation.