On the new Cambridge school
A simple macroeconomic model may be used to enunciate some of the key propositions of the "New Cambridge School" (NCS), and especially to identify and emphasize their breaks with Keynes' vision of the economic system. The penultimate section of the paper contains a simplified version of the NCS view of the relationship between the budget deficit and the trade deficit. For ease of exposition I deal only with real magnitudes and neglect time lags throughout.
A Formal Analysis of the Cambridge Economic Policy Group Model
Two propositio,ns about management of the British economy advanced by the Cambridge Economic Policy Group (CEPG) have aroused some controversy. One concerns the relationship between fiscal policy and the balance of payments; the other concerns the relative merits of import restricts and devaluation as alternative means of achieving full employment. Both have also caused confusion and misunderstanding because they were not formulated with sufficient precision when originally advanced in newspaper articles (especially Godley and Cripps, 1974) and annual policy reviews (CEPG, 1975, 1976). The policy reviews were based on a fully defined computer model (the current version is described in Fetherston, 1976), but because this was developed for realistic quantitative analysis it is too complicated and too specific to be suitable for a general exposition. This paper provides a simplified presentation of the main assumptions of the CEPG model and derives from them some precise conclusions about the effects of fiscal and trade policy. Little or no attempt is made to justify the assumptionls, the purpose being to clarify what has been asserted rather than to argue in favour of these conclusions against others. The quantitative model used for policy reviews was always intended to evolve in the light of experience and criticism and in response to the changing focus of interest in specific policy objectives and instruments. The assumptions and conclusions presented here are still provisional. In order to derive the theorems in an intelligible analytic form, some simplifications to the realistic quantitative model have been adopted. In particular, disaggregation of components of the current balance of payments, output, national income and public accounts, as well as short-run dynamics, have all largely been omitted. The first section of the paper gives an overall, verbal description of the model to indicate how it relatcs to diitTerent theoretical traditions. The three following sections describe in turn .ISSulmptions relating to real demand, external trade and inflation, and derive specific propositions about relationships between targets and instruments. The final section outlines properties of the model as a whole, based on results from the preceding sections.
Strategy and Manipulation in Medieval Elections
There are many goals in developing electoral protocols, including a desire for a system which is transparent, in that it is clear what the rule or procedure to follow is; nonmanipulable, in that it is not in a person’s best interest to misrepresent their preferences; honest, in the sense that it elects the ‘right’ candidate; and not open to strategizing, i.e., bribery or collusion. However, these desiderata are in tension with each other: Often, transparent electoral procedures are the least strategy resistant, and many honest procedures encourage manipulation. Thus a balance between these different goals must be sought. In modern times, since the seminal result on vote manipulation, the Gibbard-Satterthwaite Theorem [5, 6], much attention has been devoted to developing voting rules where manipulation is never in the best interest of the voters [4] or which are computationally too complex for the average bounded agent to be able to manipulate [1]. This focus on computational aspects of electoral methods is one of the hallmarks of modern studies on voting. But pursuit of these goals is not restricted to modern times: Those participating in elections in the Middle Ages also sought transparency, non-manipulability, honesty, and strategyproofness in so far as these properties can be consistently expressed in a single procedure. However, given the lack of computational sophistication in the Middle Ages, alternate approaches were needed in order to promote honesty, discourage strategizing, etc. These approaches can be classified as either external (constraints introduced outside of the electoral procedure, such as incentives for coming to consensus quickly) or internal (constraints introduced within the electoral procedure, such as voting rules which cannot be manipulated without adverse effects, or which are too difficult for the average bounded agent to manipulate). Surveying examples of both approaches in the context of medieval ecclesiastical and secular elections provides an interesting comparison to modern electoral procedures. Elections in the Middle Ages were used for the same reasons that they are today: To select suitable candidate(s) for a particular office, duty, or obligation. However, it is important to note that the term electio was used in the Middle Ages in a broader sense than our modern ‘election’. Its primary sense was ‘selection’ or ‘choice’, and only secondarily ‘election’ in the modern sense. Thus, many records which purportedly discuss elections are not discussing elections of the type which interests us. We can identify four categories of medieval electoral processes: (1) Election by an external authority having no direct interest in the election; (2) Indirect election, where electors name other electors who then select or elect the officials; (3) Election by lot; and (4) Election by ballot. Elections of the first and third types are generally computationally uninteresting; the first type corresponds to dictatorial voting rules, and the third type collapses to probability theory. In general, interesting voting methods are found only in the fourth type, election by ballot, though they can also occur in indirect election.