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The Statistical Analysis of Anglo-American Economic Development

Published online by Cambridge University Press:  18 July 2011

David S. Landes
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Extract

There are times when these two volumes seem to repeat each other; common to each is a core of interest in investment and economic growth, and if the titles divide the terminology, the books share the territory. Nevertheless, each of the authors approaches the problem from his own point of view, and for all the overlap, there are wide areas of individual treatment. Moreover, even where both deal with the same questions, the evidence produced is usually different, and the reader can only be grateful for his double feast of tables, graphs, and citations.

Type
Review Articles
Information
World Politics , Volume 7 , Issue 2 , January 1955 , pp. 326 - 336
Copyright
Copyright © Trustees of Princeton University 1955

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References

1 So far as the relation of the level of investment to the business cycle is concerned, Thomas is impressed not by the stabilizing effect of a fairly steady total, but by the cyclical influence of the fluctuating domestic portion of this total; only Thomas’ cycle here is not the traditional one, but rather his twenty-year “minor secular” trend.

2 This still leaves the question whether the writers have always used the most suitable series available of a particular variable. For his terms-of-trade index, for example, Cairncross employs a series prepared by P. Debenham, corrected for imported materials used in exports. Whether such a series has greater merit than, say, the gross barter terms of trade, or any of the other indices proposed for this purpose, is a debatable question. (It is true, as Cairncross points out [p. 189, n. 1], that a rise in the price of an import commodity used in part in the manufacture of exports can under certain conditions give the impression of improved terms of trade, when in fact the opposite is the case. Nevertheless, the argument of his illustration is in complete—it is not the proportion of the total value of the manufactured commodity in question to the sum of exports that is relevant, but rather the proportion of the value of the imported raw material used in the manufactured commodityto the export total. On this basis, the biases introduced are not likely to be too serious. Certainly they do not offer as great a problem as some of theother shortcomings of indices of this kind. For some calculations along these lines, see Rostow, W. W., “The Historical Analysis of the Terms of Trade,” Economic History Review, 2nd ser., IV [1951], pp. 61–62.)Google Scholar One thing iscertain: some of the other series yield quite different results and cast doubt on Cairncross’ simple correlation of terms of trade and real wages. Cf., for example, the index of gross barter terms of trade in Imlah, A. H., “The Terms of Trade of the United Kingdom,” Journal of Economic History, X (1950), pp. 180–82.Google Scholar