This is the presidential address at the 1975 Annual Meeting of the Japanese Association of Theoretical Economics, which was held on the 15th and 16th of November, 1975.

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In this paper we calculate the amount of labor directly and indirectly necessary to produce one unit of final output of each industry for the years 1955, 1960 and 1965 in Japanese economy by means of input-output calculations.
From the results obtained we study the followings.
i) the interrelations of inequality in terms of exchange among industries and the changes of the degree of inequality in five or ten years concerned.
ii) the mutual relations between the rate of change in prices and that in values.
iii) the causes which result in such an inequality state of exchange.
Finally we consider the amount of labor represented in a unit of money can be one of measures of inflation.

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In this paper, we are concerned, using a monetary growth model, with the behavior of the labor market and of the rate of change of the price level, paying regard to the interdependence among the three markets, i. e., those for commodity, money and labor.
The rate of change of the price level and that of the money wage rate are assumed to depend respectively on the excess demand for commodity and that for labor.
Following conclusions have been obtained.
The ratio of the demand for and the supply of labor in the long-run depends mainly on the rate of growth of money supply, the parameters in the labor market such as the adjustment speed of the money wage change to the excess demand for labor, and the supply function of labor. Unless the rate of change of real wage rate is independent of price variations, appropriate monetary policies are able to reduce excess demand (or excess supply) in the labor market, which accompany variations in the rate of inflation and the rate of growth of real output.

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The problem of determining the optimal procedure for the replacement of capital or military equipment has been the subject of numerous studies. However, having been conceived and developed in conjunction with investment and inventory, the study of optimal replacement has never been effectively extended to the area of consumer durable goods.
The primary objective of this paper is to study such a problem within the intertemporal utility maximization framework in which a consumer has a finite, fixed time horizon and derives satisfaction from the consumption of both durable and non-durable goods. In particular, family housing is used to illustrate the choice process.

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There are three purposes in this paper. The first is that we discuss the three different types of policy, namely, proportional, derivative and integral policy, in relation to the stability of the system. The second is that we discuss both the length of policy lag and the strength of policy in relation to the stability of the system. The third is that we derive the optimal policy to achieve the system performance.
The desired performance of a system may not be specified in terms of some performance criterion, but in terms of the transient response of a unit-step-function input. The system to be analysed is as follows.
C=c(Y-T) 0<c<1 I=(2μ/D+2μ)2νDY μ>0, ν>0 G=G X=X M=mY 0<m<1 T=tY 0<t<1 Y=C+I+G+X-M R=∫t0(X-M)dτ where C=consumption, I=investment, G=government expenditure, X=export, M= import, T=tax receipts, Y=national income, R=foreign currency reserves (measured by cumulated trade balance), D=diffential operator d/dt.
The correcting action taken is such that the government expenditure is made with a time lag to adjust the gap between optimal level of the foreign currency reserves and actual level of that. For example, proportional policy is shown by g=a1δ/D+δ(R-R*) where 1/δ is the time constant of the lag.
We shall show several conclusions.
(1) The derivative policy has the effect of stabilising the system, but the steady-state error still remains.
(2) The proportinal and integral policy have the effect of reducing the system stability, but the steady-state error does not remain.
(3) The existence of policy lag in proportinal policy makes the system unstable, but in derivative and integral policy policy, lag has only a little effect with respect to the system stability.
(4) The optimal policy for the unstable system is shown by derivative plus proportional policy, that is, g=δ/D+δ(b1+b2D)(R-R*).

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