Abbott, Edith (1876–1957) : The New Palgrave Dictionary of Economics close print preview The New Palgrave Dictionary of Economics Online Abbott, Edith (1876–1957) P. Kerr From The New Palgrave Dictionary of Economics, Second Edition, 2008 Edited by Steven N. Durlauf and Lawrence E. Blume Keywords Abbott, Edith; social policy; women, economic role of Article Social reformer, economic historian and a pioneer in America of the study of the economic position of women, Edith Abbott was born on 26 September 1876 in Nebraska, and graduated from the University of Nebraska in 1901. She enrolled in a summer session at the University of Chicago in 1902, attracting the attention of James Lawrence Laughlin and Thorstein Veblen, and on their recommendation returned to Chicago in 1903 on a fellowship in political economy, taking her PhD in 1905 with a dissertation on the wages of unskilled labour in the USA between 1850 and 1900 (Abbott, 1905). It was during this period at Chicago that she met Sophonisba Breckinridge who became her mentor and lifelong friend. In 1906, on a Carnegie Fellowship, she went to the LSE to carry out research on women in industry. In London she was influenced by the social reformers of the day, including Charles Booth and Sydney and Beatrice Webb. She returned to the USA in 1907 and taught political economy at Wellesley. In 1908 Breckinridge, now Director of Research at the newly established Chicago School of Civics and Philanthropy, invited her to become her assistant. Abbott's work there involved her directly in action for the protection and education of juveniles and immigrants, for improvements in housing, and for the reform of correctional institutions. She also worked towards women's suffrage, the ten-hour law to protect women in employment, and the admission of women into trades unions. In the 1930s she was to become a staunch advocate of social insurance measures and the welfare state. Although sympathetic to the New Deal, she felt it to be entirely inadequate when it came to welfare policies. Her publications ranged over a number of areas in social and public policy, and with Breckinridge, she was an influential proponent of the role of the state as the key element in any extensive programme of social welfare. The journal they jointly established in 1927, Social Science Review, was immediately recognized as a highly esteemed professional journal. Her main writings on economics were collected in her Women in Industry (1910), where a recurring theme was the distinction between the progress of ‘professional’ women (and the women's movements with which they were associated) and the relatively http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=1&goto=a&id=pde2008_A000001&print=true（第 1／2 页）2008-12-29 22:55:34 Abbott, Edith (1876–1957) : The New Palgrave Dictionary of Economics unchanged position of working-class women. After 1920, although social work came increasingly to dominate her time, Abbott continued her role as an applied economist. She was a member of the advisory committee of the ILO on immigration, and succeeded Breckinridge as Dean of the School of Social Studies Administration at Chicago. She remained in the post until 1942, and continued editing the Social Science Review until 1953. She died at the age of 80 at her family home in Grand Island. Selected works 1905. Wages of unskilled labour in the United States, 1850–1900. Journal of Political Economy 13, 321– 67. 1906. Industrial employment of women in the United States. Journal of Political Economy 14, 461–501. 1908. Study of early history of child labour in America. American Journal of Sociology 14, 15–37. 1910. Women in Industry: A Study in American Economic History. London: Appleton & Co; last reprinted in 1970. 1915. A forgotten minimum wage bill. Life and Labour 5, 13–16. How to cite this article Kerr, P. "Abbott, Edith (1876–1957)." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 29 December 2008 <http://www. dictionaryofeconomics.com/article?id=pde2008_A000001> doi:10.1057/9780230226203.1851 http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=1&goto=a&id=pde2008_A000001&print=true（第 2／2 页）2008-12-29 22:55:34 Abramovitz, Moses (1912–2000) : The New Palgrave Dictionary of Economics close print preview The New Palgrave Dictionary of Economics Online Abramovitz, Moses (1912–2000) Richard A. Easterlin From The New Palgrave Dictionary of Economics, Second Edition, 2008 Edited by Steven N. Durlauf and Lawrence E. Blume Keywords Abramovitz, M.; aggregate demand theory; business cycles; economic growth in the very long run; inventories; Kuznets cycles Article Born in Brooklyn, New York, Abramovitz was educated at Harvard (AB, 1932) and Columbia (Ph.D., 1939). He held faculty appointments at Columbia (1940–2, 1946–8) and Stanford University (1948–77) and was a member of the research staff of the National Bureau of Economic Research from 1938 to 1969. From 1942 to 1946 he worked as an economist for several organizations within the United States government. He was elected president of the American Economic Association in 1979–80. Abramovitz's work, which was particularly influenced by Wesley C. Mitchell and Simon Kuznets, centres on the study of long-term economic growth and fluctuations in industrialized market economies. His first major contribution was an empirical study of business inventories that demonstrated the importance of inventory change in the shorter swings of the business cycle, and showed how the classification of inventories by stage of processing aided in the explanation of their behaviour (Abramovitz, 1950). From this, Abramovitz went on to the study of longer-term fluctuations, Kuznets cycles of 15 to 20 years duration, and formulated the most widely accepted interpretation of these cycles. Using Keynesian aggregate demand theory, Abramovitz developed a model linking Kuznets cycles to long swings in building cycles and demographic variables, and to shorter-term business cycles (Abramovitz, 1959a; 1961; 1964; 1968). Contemporaneously with his work on fluctuations, Abramovitz made important contributions to long- term economic growth. He was one of the first to demonstrate that only a small share of long-term output growth in the United States was explained by factor inputs (Abramovitz, 1956). He documented and analysed the increasing role of government during long-term economic growth (Abramovitz, 1957; 1981) and directed and coordinated a comparative study of the post-war economic growth of a number of industrialized market nations (Abramovitz, 1979b; 1986). Finally, he challenged in characteristically perceptive fashion the facile linkage made by many economists between economic growth and improving human welfare (Abramovitz, 1959b; 1979a; 1982). http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=2&goto=a&id=pde2008_A000002&print=true（第 1／3 页）2008-12-29 22:58:05 Abramovitz, Moses (1912–2000) : The New Palgrave Dictionary of Economics Selected works 1950. Inventories and Business Cycles. New York: NBER. 1956. Resource and output trends in the United States since 1870. American Economic Review, Papers and Proceedings 46(2), 5–23. 1957. (With V. Eliasberg.) The Growth of Public Employment in Great Britain. Princeton: Princeton University Press. 1959a. Long swings in U.S. economic growth. Statement presented to Joint Economic Committee of the Congress. Hearings before Joint Economic Committee of the Congress of the U.S. on Employment, Growth and Price Levels, Part 2, 11–66, 10 April. 1959b. The welfare interpretation of secular trends in national income and production. In M. Abramovitz et al., The Allocation of Economic Resources: Essays in Honor of Bernard F. Haley. Stanford: Stanford University Press. 1961. The nature and significance of Kuznets cycles. Economic Development and Cultural Change 9, 225–48. 1964. Evidence of Long Swings in Aggregate Construction since the Civil War. Occasional Paper No. 90. New York: NBER. 1968. The passing of the Kuznets cycle. Economica, 349–67. 1979a. Economic growth and its discontents. In Economics and Human Welfare: Essays in Honor of Tibor Scitovsky, ed. M. Boskin. New York: Academic Press. 1979b. Rapid growth potential and its realization: the experience of capitalist economies in the postwar period. In Economic Growth and Resources. Proceedings of the Fifth World Congress of the International Economic Association, vol. 1. London and New York: Macmillan. 1981. Welfare quandaries and productivity concerns. Presidential Address to the American Economic Association. American Economic Review 71, 1–17. 1982. The retreat from economic advance. In Progress and its Discontents, ed. G.A. Almond, M. Chodorow and R.H. Pearce. Berkeley: University of California Press. 1986. Catching up, forging ahead and falling behind. Journal of Economic History 46, 385–406. http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=2&goto=a&id=pde2008_A000002&print=true（第 2／3 页）2008-12-29 22:58:05 Abramovitz, Moses (1912–2000) : The New Palgrave Dictionary of Economics How to cite this article Easterlin, Richard A. "Abramovitz, Moses (1912–2000) ." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 29 December 2008 <http://www. dictionaryofeconomics.com/article?id=pde2008_A000002> doi:10.1057/9780230226203.0001 http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=2&goto=a&id=pde2008_A000002&print=true（第 3／3 页）2008-12-29 22:58:05 absolute and exchangeable value : The New Palgrave Dictionary of Economics close print preview The New Palgrave Dictionary of Economics Online absolute and exchangeable value John Eatwell From The New Palgrave Dictionary of Economics, Second Edition, 2008 Edited by Steven N. Durlauf and Lawrence E. Blume Abstract The notion of absolute (as distinct from exchangeable or relative) value arises in classical economics from the image of a given magnitude of output being distributed between the social classes. Ricardo posited that the value of the social surplus could be expressed in terms of labour regardless of how the surplus was distributed. But since changes in distribution affect exchangeable value, the value of the surplus will typically vary as distribution varies, even though its physical magnitude remains unchanged. In 1823 Ricardo concluded that ‘there is no such thing in nature as a perfect measure of value’. Keywords absolute and exchangeable value; Cairnes, F. E.; Cairnes, J. E.; class; classical economics; invariable standard of value; labour theory of value; Marx, K.H.; rate of profit; Ricardo, D.; Sraffa, P.; surplus Article No one can doubt that it would be a great desideratum in political economy to have such a measure of absolute value in order to enable us to know, when commodities altered in relative value, in which the alteration in value had taken place. (David Ricardo, 1823, p. 399n) The idea that changes in the relative or exchangeable value of a pair of commodities might usefully be attributed to alterations in the ‘absolute value’ of one or the other of them will appear rather odd to anyone accustomed to thinking of the basic problem of price theory as being the determination of sets of relative prices, with any consideration of ‘absolute’ value being confined to problems in monetary theory and the determination of the overall price level. Since in neoclassical theory it is the relative scarcity of commodities, or of the factor services which are used to produce them, which is the key to relative price formation, no conception of ‘absolute’ value, that is, a price associated with the conditions of production of a single commodity, is either relevant or necessary. Yet the notion of absolute value arose naturally within Ricardo's analysis of value and distribution. The central problem of classical theory is to relate the physical magnitude of surplus (defined as the social http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=3&goto=a&id=pde2008_A000004&print=true（第 1／4 页）2008-12-29 22:59:29 absolute and exchangeable value : The New Palgrave Dictionary of Economics output minus the replacement of materials used in its production and the wage goods paid to the labourers employed) to the general rate of profit and the rents in terms of which the surplus is distributed. The key image is the distribution of a given magnitude of output between the classes of the society. ‘After all’, as Ricardo put it, ‘the great questions of Rent, Wages and Profits must be explained by the proportions in which the whole produce is divided between landlords, capitalists, and labourers, and which are not essentially connected with the doctrine of value’ (1820, p. 194). Ricardo was able to sustain this ‘material’ view of distribution only in the Essay on Profits, and only there by the implicit device of a sector in which all inputs and all output consist of the same commodity, corn, which is also used to pay wages in the other sectors of the economy. In the corn sector the division of the product may be expressed in physical terms, and the rate of profit expressed as a ratio of physical magnitudes. This clear and direct analysis is no longer possible once the strong assumption of a self-reproducing sector is dropped. The need to express heterogeneous surplus (net of rent) and heterogeneous capital as homogeneous magnitudes in order to determine the rate of profit created the need for a theory of value. Ricardo's materialist approach led him to the labour theory of value. The quantity of labour embodied directly and indirectly in the production of a commodity is determined by the conditions of production of that commodity, or as Ricardo put it, by the difficulty or facility of production, and will change only when the technique changes. Hence the aggregates of social surplus and capital advanced may be expressed as quantities of labour, these quantities being invariant to changes in the distribution of social product. So the rate of profit is determined as the ratio of surplus (on the land last brought into use) to the means of production, including wages. Once, however, the impact of changes in distribution on exchangeable value is taken into account the picture is far less clear. The value of social output, and of the surplus, measured in any given standard, will typically now vary as distribution varies, even though the physical magnitude of social output remains unchanged. The direct deductive relationship between wages, surplus, and hence, the rate of profit, is no longer self-evident, or indeed, evident at all. It was Ricardo's desire to restore clarity to his analysis which led to his search for an invariable standard of value (a standard in terms of which the size of the aggregate would not vary as distribution was changed) and for what Sraffa describes as ‘for Ricardo its necessary complement’, absolute value (Sraffa, 1951, p. xlvi). The term ‘absolute value’ was used by Ricardo but once in the first edition of the Principles and occasionally in letters. It was clarified in the papers on ‘Absolute Value and Exchangeable Value’, written in 1823 in the last few years of his life. These were discovered in a locked box at the home of F. E. Cairnes, the son of the economist John Elliot Cairnes, in 1943, and published for the first time in Sraffa's edition of Ricardo's Works and Correspondence. There are two versions of the essay. One, a rough draft, is written on odd pieces of paper, some of them the covers of letters addressed to Ricardo. The other is a scarcely corrected draft, written on uniform sheets of paper. This clean draft breaks off, unfinished. The importance of the essay derives from the reinforcement it provides to that interpretation of Ricardo's theory of value and distribution which suggests that the problem of the determination of the relative values of commodities stemmed from Ricardo's desire to relate his image of the division of social product as a physical magnitude to the wages, rents, and rate of profit of a market economy. Ricardo was not interested for its own sake in the problem of why two commodities produced by the same quantities of labour are not of the same exchangeable value. He was, rather, concerned by the fact that as http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=3&goto=a&id=pde2008_A000004&print=true（第 2／4 页）2008-12-29 22:59:29 absolute and exchangeable value : The New Palgrave Dictionary of Economics distribution of social output changes exchangeable value changes, disrupting and obscuring an otherwise clear vision. It was this emphasis on the fact that changes in distribution lead to changes in exchangeable value, even though the quantity of social output and the method by which it is produced are unchanged, which led Ricardo into the intellectual cul-de-sac of the search for an invariable standard of value. The absolute value of a commodity is the value of that commodity measured in terms of an invariable standard. An invariable standard of value may be found … if precisely the same length of time and neither more nor less were necessary to the production of all commodities. Commodities would then have an absolute value directly in proportion to the quantity of labour embodied in them. (Ricardo, 1823, p. 382) Changes in the absolute values of commodities could then derive only from changes in the amount of labour embodied in them, and the value of social output would be invariate to its distribution. Yet precisely because all commodities are not produced under the same circumstances, ‘difficulty or facility of production is not absolutely the only cause of variation in value, there is one other, the rise or fall of wages’ since commodities cannot ‘be produced and brought to market in precisely the same time’ (1823, p. 368). Hence Ricardo must conclude, rather sadly, that ‘there is no such thing in nature as a perfect measure of value’ (1823, p. 404) – there is no such thing as an invariable standard of value. Marx (1883), who could not, of course, have seen the papers on Absolute and Exchangeable Value, was critical of Ricardo's absorption with the search for an invariable standard. The focus on changes in relative value obscured the fact that commodities do not exchange at rates proportional to their labour values (labour embodied). Yet Marx's attempt to restore clarity to the analysis of distribution by first determining the rate of profit as the ratio of quantities of labour, and then ‘transforming’ labour values into prices of production, encounters difficulties which derive from exactly the same source as those which bedevilled Ricardo – the difference in production conditions or ‘organic composition of capital’ of commodities. The data of classical theory can be used to determine the rate of profit, as Sraffa (1960) has shown. But the determination cannot be ‘sequential’ – first specifying a theory of value and then evaluating the ratio of surplus to capital advanced by means of that predetermined theory of value. Rather the rate of profit and the rates at which commodities exchange must be determined simultaneously. See Also Ricardo, David ● Bibliography Marx, K. 1883. Capital, vol. 3, London: Lawrence and Wishart, 1976. Ricardo, D. 1820. Letter to J.R. McCulloch, 13 June 1820. In Works and Correspondence of David Ricardo, vol. 8, ed. P. Sraffa. Cambridge: Cambridge University Press, 1953. http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=3&goto=a&id=pde2008_A000004&print=true（第 3／4 页）2008-12-29 22:59:29 absolute and exchangeable value : The New Palgrave Dictionary of Economics Ricardo, D. 1823. Paper on ‘Absolute and exchangeable value’ (rough draft, and unfinished clean version). In Works and Correspondence of David Ricardo, vol. 4, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951. Sraffa, P. 1951. Introduction to Works and Correspondence of David Ricardo, vol. 1, Cambridge: Cambridge University Press. Sraffa, P. 1960. Production of Commodities by Means of Commodities. Cambridge: Cambridge University Press. How to cite this article Eatwell, John. "absolute and exchangeable value." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 29 December 2008 <http://www. dictionaryofeconomics.com/article?id=pde2008_A000004> doi:10.1057/9780230226203.0002 http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=3&goto=a&id=pde2008_A000004&print=true（第 4／4 页）2008-12-29 22:59:29 absorption approach to the balance of payments : The New Palgrave Dictionary of Economics close print preview The New Palgrave Dictionary of Economics Online absorption approach to the balance of payments David Vines From The New Palgrave Dictionary of Economics, Second Edition, 2008 Edited by Steven N. Durlauf and Lawrence E. Blume Article The absorption approach to the balance of payments states that a country's balance of trade will only improve if the country's output of goods and services increases by more than its absorption, where the term ‘absorption’ means expenditure by domestic residents on goods and services. This approach was first put forward by Alexander (1952, 1959). The novelty of this approach may be appreciated by considering the particular question ‘will a devaluation improve a country's balance of trade?’ The elasticities approach, popular when Alexander was writing, answers this question by focusing on the price elasticities of supply and demand for exports and imports. It holds that the devaluation will be successful if the price elasticities of demand for exports and imports are large enough so that the increase in exports sold to foreigners and the reduction in imports bought by domestic residents together more than offset the terms of trade loss caused by the devaluation. (A special case of this result is formalized in the Marshall–Lerner conditions.) The absorption approach argues, by contrast, that the devaluation will only be successful if it causes the gap between domestic output and domestic absorption to widen. In effect Alexander criticizes the elasticities approach for focusing on the movement along given supply and demand curves in the particular markets for exports and imports (a microeconomic approach), instead of looking at the production and spending of the nation as a whole which shift these curves (a macroeconomic approach). Alexander's criticism of the elasticities approach is valid. But without further elaboration the absorption approach is unhelpful in rectifying the inadequacy. This is because, taken at face value, the absorption approach merely states an identity. Let the symbols, Y, C, I, G, X and M stand for output, consumption, investment, government expenditure, exports and imports respectively. Then the Keynesian income- expenditure identity states that (1) which may be rewritten http://www.dictionaryofeconomics.com.proxy.library.csi...e?result_number=4&goto=a&id=pde2008_A000008&print=true（第 1／6 页）2008-12-29 23:00:18