Principles of econometrics. Principles of Economics (8th ed.) 2019-01-27

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Using Eviews for Principles of Econometrics by R. Carter Hill

principles of econometrics

The relations of many ancient Greeks and Romans with the slaves of their households were genial and humane. History in general, and especially the history of socialistic ventures, shows that ordinary men are seldom capable of pure ideal altruism for any considerable time together; and that the exceptions are to be found only when the masterful fervour of a small band of religious enthusiasts makes material concerns to count for nothing in comparison with the higher faith. Among its conspicuous elements are such things as the factory and the business plant of a manufacturer; that is, his machinery, his raw material, any food, clothing, and house-room that he may hold for the use of his employees, and the goodwill of his business. This measurement presents however some special difficulties, the study of which must be postponed. Such estimates are latent in almost every stage of his argument: he cannot conclude that one cause or group of causes has been overridden by another without making some implicit estimate of their relative weights. They are hypothetical only in the same sense as are the laws of the physical sciences: for those laws also contain or imply conditions. In England, as well as on the Continent and in America, Economic studies are being more vigorously pursued now than ever before; but all this activity has only shown the more clearly that Economic science is, and must be, one of slow and continuous growth.

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Using Eviews for Principles of Econometrics by R. Carter Hill

principles of econometrics

And thus the law just given may be worded:— The marginal utility of a thing to anyone diminishes with every increase in the amount of it he already has. The economic conditions of modern life, though more complex, are in many ways more definite than those of earlier times. It is to be hoped that these two schools will always exist; each doing its own work thoroughly, and each making use of the work of the other. But whenever we can penetrate to the inner life of a crowded population under primitive conditions in our own time, we find more want, more narrowness, and more hardness than was manifest at a distance: and we never find a more widely diffused comfort alloyed by less suffering than exists in the western world to-day. We need a term that does not imply any moral qualities, whether good or evil, but which indicates the undisputed fact that modern business and industry are characterized by more self-reliant habits, more forethought, more deliberate and free choice.

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9781305585126

principles of econometrics

German economists often lay stress on the non-material elements of national wealth; and it is right to do this in some problems relating to national wealth, but not in all. According to the labour theory of value could not explain fluctuating values for different kinds of labour, nor did it explain how found goods could be more valuable than extracted goods. But he must not decry competition in general, without analysis: he is bound to retain a neutral attitude towards any particular manifestation of it until he is sure that, human nature being what it is, the restraint of competition would not be more anti-social in its working than the competition itself. Thus gravitation tends to make things fall to the ground: but when a balloon is full of gas lighter than air, the pressure of the air will make it rise in spite of the tendency of gravitation to make it fall. This illustrates one peculiarity which economics shares with a few other sciences, the nature of the material of which can be modified by human effort. After many more generations have passed, our present ideals and methods may seem to belong to the infancy, rather than to the maturity of man.

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Principles of Econometrics

principles of econometrics

This is often the case with regard to clothes and other things which are worn out gradually, and which can be made to serve a little longer than usual under the pressure of high prices. In 1864 however many found themselves unable to wait longer; and a good deal more cotton was entered for home consumption in that year, though the price was then much higher, than in either of the preceding years. Another distinction to which some prominence has been given, but which is vague and perhaps not of much practical use, is that between consumers' goods called also consumption goods, or again goods of the first order , such as food, clothes, etc. They watch carefully the conduct of a whole class of people, sometimes the whole of a nation, sometimes only those living in a certain district, more often those engaged in some particular trade at some time and place: and by the aid of statistics, or in other ways, they ascertain how much money on the average the members of the particular group, they are watching, are just willing to pay as the price of a certain thing which they desire, or how much must be offered to them to induce them to undergo a certain effort or abstinence that they dislike. Material goods consist of useful material things, and of all rights to hold, or use, or derive benefits from material things, or to receive them at a future time.

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Using Eviews for Principles of Econometrics by R. Carter Hill

principles of econometrics

Of two parents who are, so far as we can tell, equally affectionate, one will suffer much more than the other from the loss of a favourite son. There are however many varieties in detail; arising chiefly from the fact that there are some commodities with which people are easily satiated, and others—chiefly things used for display—for which their desire is almost unlimited. In the second place, the problems, which are grouped as economic, because they relate specially to man's conduct under the influence of motives that are measurable by a money price, are found to make a fairly homogeneous group. The current prices of meat, milk and butter, wool, tobacco, imported fruits, and of ordinary medical attendance, are such that every variation in price makes a great change in the consumption of them by the working classes, and the lower half of the middle classes; but the rich would not much increase their own personal consumption of them however cheaply they were to be had. If ever we want to use it in a different sense, we must say so: for instance we may speak of labour as productive of necessaries, etc. Speaking broadly therefore, although it is man's wants in the earliest stages of his development that give rise to his activities, yet afterwards each new step upwards is to be regarded as the development of new activities giving rise to new wants, rather than of new wants giving rise to new activities.

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9781305585126

principles of econometrics

It has been already argued that desires cannot be measured directly, but only indirectly by the outward phenomena to which they give rise: and that in those cases with which economics is chiefly concerned the measure is found in the price which a person is willing to pay for the fulfilment or satisfaction of his desire. In backward countries there are still many habits and customs similar to those that lead a beaver in confinement to build himself a dam; they are full of suggestiveness to the historian, and must be reckoned with by the legislator. On the other hand, demand is, generally speaking, very inelastic, firstly, for absolute necessaries as distinguished from conventional necessaries and necessaries for efficiency ; and secondly, for some of those luxuries of the rich which do not absorb much of their income. It is deliberateness, and not selfishness, that is the characteristic of the modern age. But, even if we confine our attention to mere physical pleasures and pains of the same kind, we find that they can only be compared indirectly by their effects. And, starting from simple considerations of this kind, economists go on to analyse the causes which govern the local distribution of different kinds of industry, the terms on which people living in distant places exchange their goods with one another, and so on: and they can explain and predict the ways in which fluctuations of credit will affect foreign trade; or again the extent to which the burden of a tax will be shifted from those on whom it is levied, on to those for whose wants they cater; and so on.

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Principles of Econometrics by R. Carter Hill

principles of econometrics

But if the efficiency and energy of industry are the same, the true interest of a country is generally advanced by the subordination of the desire for transient luxuries to the attainment of those more solid and lasting resources which will assist industry in its future work, and will in various ways tend to make life larger. The above are the main questions with which economic science has to deal directly, and with reference to which its main work of collecting facts, of analysing them and reasoning about them should be arranged. We desire to obtain, if possible, a series of prices at which different amounts of a commodity can find purchasers during a given time in a market. In all these cases there is great difficulty in allowing for the time that elapses between the economic cause and its effect. He estimates the incentives to action by their effects just in the same way as people do in common life.

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Principles of Econometrics, 4th Edition

principles of econometrics

Here and there the ardour of the military or the artistic spirit has been for a while predominant: but religious and economic influences have nowhere been displaced from the front rank even for a time; and they have nearly always been more important than all others put together. Because water is plentiful, the marginal benefit of an additional cup is small. The advantage which economics has over other branches of social science appears then to arise from the fact that its special field of work gives rather larger opportunities for exact methods than any other branch. Again, most of the chief distinctions marked by economic terms are differences not of kind but of degree. But there is a clear tradition that we should speak of Capital when considering things as agents of production; and that we should speak of Wealth when considering them as results of production, as subjects of consumption and as yielding pleasures of possession.

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Using Eviews for Principles of Econometrics by R. Carter Hill

principles of econometrics

We have learnt that every one until proved to be hopelessly weak or base is worthy of full economic freedom: but we are not in a position to guess confidently to what goal the advance thus begun will ultimately lead. The consumption of conventional necessaries by productive workers is commonly classed as productive consumption; but strictly speaking it ought not to be; and in critical passages a special interpretation clause should be added to say whether or not they are included. And the organization of a free and well-ordered State is to be regarded for some purposes as an important element of national wealth. For example,by offering a raise in the salary of whosoever works harder can induce people to work hard which is a positive incentive. Their exclusion involves no principle; and time spent by some controversial writers on discussing it has been wasted. Strong producers could easily bear a touch of hardship; so they would wish that their weaker neighbours, while producing less should consume more. These gains are called profits.

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