Re: [OPE] Jubak, "Fake inflation numbers masked crisis"[MESSAGE NOTSCANNED][MESSAGE NOT SCANNED]

From: Paul Cockshott <>
Date: Tue Dec 09 2008 - 06:51:09 EST

Dave Zachariah wrote:
> on 2008-12-08 17:11 Paul Cockshott wrote:
>> The effect is in the opposite direction!
> Hmm, I must have misunderstood something here.
> MELT = Net Domestic Product at market prices / number of worker-hours
> Holding prices and the quantity of labour constant, a rise in
> productivity ought to raise the NDP and hence the MELT. Holding
> productivity and the quantity of labour constant, a rise in prices
> ought to inflate the NDP and hence the MELT.
But why should prices remain the same if productivity rises?

What I was meaning is that the real value of money is the amount of
labour it will purchase. If there is inflation the value of money falls
and so the MELT rises. If the MELT rises there must have been inflation
since the value of money has fallen.

> //Dave Z
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Received on Tue Dec 9 06:52:52 2008

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