Re: [OPE-L] basics vs. non-basics

From: Ian Wright (wrighti@ACM.ORG)
Date: Wed Oct 05 2005 - 14:53:11 EDT

Hi Ajit

> The bean producers do not have to buy the beans in the
> market. They simply use the beans they have produced
> as inputs. So the cost of beans is always based on
> imputed price of beans for the bean producers. In this
> case they impute a price of beans that are different
> from the price of beans they sell it in the market.
> ajit sinha

Arguably that may work for the special case of a single
self-reproducing non-basic. It doesn't work for the general case of
systems of self-reproducing non-basics.

For example, suppose that beans are not directly required for their
own production. Instead, they are inputs to n other non-basic sectors,
of which m<n of those non-basic sectors are inputs to the bean sector.
In which case, beans are indirectly required for their own production.

The bean producers buy the m non-basics as inputs in the market. Is it
the "imputed price" or the "market price" of beans that indirectly
appears as a part of the cost of those inputs?


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