Book contents
- Frontmatter
- Contents
- List of contributors
- Foreword by Arthur Brown
- Preface by Robert Leeson
- Part I Bill Phillips: Some Memories and Reflections
- Part II The Phillips Machine
- Part III Dynamic Stabilisation
- Part IV Econometrics
- 36 The Bill Phillips legacy of continuous time modelling and econometric model design
- 37 The published papers
- 38 The influence of A.W. Phillips on econometrics
- 39 An appreciation of A.W. Phillips
- 40 Some notes on the estimation of time-forms of reactions in interdependent dynamic systems
- 41 Cybernetics and the regulation of economic systems
- 42 The estimation of parameters in systems of stochastic differential equations
- 43 Estimation, regulation and prediction in interdependent dynamic systems
- 44 The Walras-Bowley Paper
- 45 Estimation of systems of difference equations with moving average disturbances
- 46 The estimation of continuous time models
- 47 Estimation in continuous time series models with autocorrelated disturbances
- 48 Efficient fitting of rational spectral density functions and transfer functions
- 49 The Lucas Critique: did Phillips make a comparable contribution?
- 50 Models for the control of economic fluctuations
- 51 Statistical estimation for the purpose of economic regulation
- 52 The last paper: a foreshadowing of the Lucas Critique?
- References
- Index of names
- Index of subjects
40 - Some notes on the estimation of time-forms of reactions in interdependent dynamic systems
Published online by Cambridge University Press: 04 May 2010
- Frontmatter
- Contents
- List of contributors
- Foreword by Arthur Brown
- Preface by Robert Leeson
- Part I Bill Phillips: Some Memories and Reflections
- Part II The Phillips Machine
- Part III Dynamic Stabilisation
- Part IV Econometrics
- 36 The Bill Phillips legacy of continuous time modelling and econometric model design
- 37 The published papers
- 38 The influence of A.W. Phillips on econometrics
- 39 An appreciation of A.W. Phillips
- 40 Some notes on the estimation of time-forms of reactions in interdependent dynamic systems
- 41 Cybernetics and the regulation of economic systems
- 42 The estimation of parameters in systems of stochastic differential equations
- 43 Estimation, regulation and prediction in interdependent dynamic systems
- 44 The Walras-Bowley Paper
- 45 Estimation of systems of difference equations with moving average disturbances
- 46 The estimation of continuous time models
- 47 Estimation in continuous time series models with autocorrelated disturbances
- 48 Efficient fitting of rational spectral density functions and transfer functions
- 49 The Lucas Critique: did Phillips make a comparable contribution?
- 50 Models for the control of economic fluctuations
- 51 Statistical estimation for the purpose of economic regulation
- 52 The last paper: a foreshadowing of the Lucas Critique?
- References
- Index of names
- Index of subjects
Summary
The need for quantitative knowledge of economic reactions
In dealing with questions of economic policy it is necessary to form some judgement about the magnitudes and time-forms of the responses of individuals or groups of individuals to changes in certain of the conditions confronting them. We may take as an example the problems facing a government which is pursuing a policy of keeping employment at the highest level consistent with the maintenance of free convertibility, at a fixed rate of exchange, between its own currency and that of another major country, it being the policy of the other country to keep its own employment at the highest level consistent with the maintenance of stable product prices.
Let us assume that some change, say an increase in the desire of home firms to invest in new capital equipment, leads to an increase in production and in the demand for factors of production, and that as a result factor prices begin to rise more rapidly than the secular rise in productivity, so that product prices rise. Because of the higher home demand and rising costs and prices, imports will gradually rise and exports decline, the consequent deficit in the balance of payments being met by drawing upon reserves of foreign currency. The government will take action to correct the adverse balance of payments by reducing home demand, either through a reduction in its own expenditure or, more likely, by increasing taxes, or reducing the quantity of money and raising interest rates, in order to induce private individuals and firms to reduce their expenditure.
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- Information
- A. W. H. Phillips: Collected Works in Contemporary Perspective , pp. 370 - 384Publisher: Cambridge University PressPrint publication year: 2000
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