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

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Thu Oct 06 2005 - 04:59:58 EDT

--- Ian Wright <wrighti@ACM.ORG> wrote:

> 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?
> -Ian.
May be I don't understand your point. But I don't see
any problem here. All other inputs are bought in the
market by the bean producr and so there is no question
of imputation here. They cost what they cost. If those
producers have used beans in their production, they
measured its cost by the price they paid for it. What
is the problem here? I don't see any problem here. In
any case, remember that the bean problem arise because
the proportion of beans as inputs in the production of
beans is unusually high. Let say, if the normal rate
of profits is 10%, then if it takes 100 units of beans
as input to produce 110 units of beans, then you get
into the bean problem. Cheers, ajit sinha

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