There are numerous contributions to the literature on the relationship between various government intervention schemes and the rate of inflation. However, it seems that the policy of direct price support to consumer goods has not been analyzed in the professional literature, despite the fact that such policies are proposed in various countries in conjunction with anti-inflationary measures. For example, the British government proposed in July 1975 to increase food subsidies, among other measures to attrack inflation.

Economists seem to be aware of the questionable value of subsidies in the fight against inflation. Subsidies have to be financed by the government, and therefore they may cause larger deficits, thus contributing to the inflationary process. On the other hand, subsidies may affect income distribution in favor of certains groups, and be of political value.

We undertake a rigorous analysis of consumption subsidies and their relation to inflation and income distribution. The model employed for this purpose is Samuelson’s overlapping generations model (Samuelson, [1958]), in its simplest form. There is just one good, and fiat money; inflation is measured by the change of the money price of the consumption good from period to period.

Critics of the labour theory of value have recently pointed out that a value determination procedure based on input-output equations will lead, in the case of joint production, to contradictory results such as negative values and a negative rate of exploitation in economically viable systems (STEEDMAN (1975)). These paradoxical results follow directly from Sraffas findings on negative employment multipliers in joint production systems (SRAFFA (1960), §70) and seem to undermine any attempt at giving a picture of an economy in terms of embodied labour, at least as long as quantities of embodied labour are determined by means of input-output equations. On the other hand it has been shown by Morishima (MORISHIMA (1973); MORISHIMA (1974)) that it is possible to reformulate the labour theory of value in terms of linear programs based on inequality restrictions in such a way that the paradox of negative values disappears. Before going into the discussion of the linear programming approach to value analysis it might be interesting to state the reason why the paradox of negative values can be avoided by substituting input-output equations with inequality restrictions.

Pour pallier les effets de l’inflation, certains milieux ont préconisé la mise en place d’une politique d’indexation de l’épargne. L’argumentation est la suivante: l’inflation réduit la valeur réelle des actifs monétaires et pénalise les créanciers. Elle encourage ainsi l’investissement et même le surinvestissement ; elle stimule la consommation, l’achat de biens durables et d’actifs immobiliers avec, pour corollaire, une relance de l’inflation. Le transfert de richesses s’opère aux dépens des petits investisseurs pour lesquels la gamme des possibilités d’investissement est limitée ; par contre, les pouvoirs publics remboursent leurs dettes en monnaie déprécée, bénéficient de rentrées fiscales accrues et peuvent augmenter le stock monétaire dans la mesure où les ménages désirent maintenir le niveau de leurs encaisses réelles. L’indexation des actifs monétaires éviterait de trop grandes distorsions dans l’affectation de l’épargne, réduirait les avantages indus des emprunteurs, encouragerait une plus grande sélectivité des investissements, contraindrait l’Etat à plus de vigilance dans la lutte contre l’inflation et faciliterait la gestion des institutions financières qui accordent des prêts non indexés à long terme au départ de dépôts à court terme.

This paper briefly presents and analyses the behaviour of the different sectors of the Belgian economy during the period 1965-1978. Special attention is paid to the influence of the 1974 oil crisis on sectors of the Belgian economy. It is shown that the 1974 shock had different consequences according to the energy components of the sectors.

Measured in 1970 prices, the real production of all Belgian sectors together had an average, annual growth rate of 4.32 % between 1965 and 1978. This 13-year period, however, was marked by an important shock in 1974 and the growth rates over the period 1974-1978 were substantially lower than those observed before 1974.

Although the average growth rate was 5.5% during the period 1965-1978, it was below 2% (1.79%) between 1974 and 1978. This important reduction illustrates the set-back of activity in most sectors and especially in the industrial sector; the average growth rate of industry dropped from 6.81% between 1965 and 1974 to 0.85 % from 1974 to 1978. The energy sector was also affected by the 1974 crisis, only conserving a moderate growth rate of 1.74% during the period 1974-1978 against 6.77% previously. On the contrary, services resisted the crisis better and maintained a growth rate of about 4 % until 1978.

Ce sont Berle et Means (1962) qui furent les premiers à tenter de confirmer empiriquement et systématiquement l’idée que les fonctions de management sont dissociées de la propriété dans les grandes sociétés.

Leur vision contraste avec celle des modèles classiques et néo-classiques : ils perçoivent l’entreprise comme une organisation dont le centre de décision a cessé d’être le lieu d’un interêt commun, celui du propriétaire.

Cette séparation entre la propriété et le contrôle des grandes entreprises aboutit à l’énoncé d’une pluralité d’objectifs au sein de l’organisation ainsi redéfinie, cette pluralité n’étant que la conséquence de la confrontation d’intérêts a priori divergents.

Le modèle de maximisation du profit peut dès lors ne plus se révéler valable; dans certains cas il convient plutôt d’élaborer un modèle où le profit n’est plus considéré que comme l’un des arguments de la fonction d’objectif ou comme une contrainte minimale à respecter.

In a recent note Latham and Peel (1974) showed, in the context of a model in which labour adjustments are costly and the capital stock is fixed, that any positive value of the returns to labour parameter is compatible with present value maximization. The use of a Cobb-Douglas production function in that paper meant that the presence of increasing, constant or decreasing returns to labour was datum. More recently Gaudet (1977) shows how production in the increasing returns range of the production function may be compatible with competitive equilibrium in a model in which there are two factors of production, labour and capital, and there are costs incurred in adjusting the capital stock. However, Gaudet used a Cobb-Douglas production function with diminishing returns to each factor of production.

The purpose of this note is to show that a firm operating in perfectly competitive markets but facing costs of adjustment to its sole variable input (labour) may well prefer to operate in a region of the production function in which the output elasticity of labour is greater than unity (i.e. increasing returns to labour).