[OPE-L:4010] Re: More Depreciation Questions

Michael Perelman (michael@ecst.csuchico.edu)
Fri, 17 Jan 1997 08:58:27 -0800 (PST)

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andrew kliman wrote:

> Michael is quite right that "Capital experiences sudden revaluations," and
> this makes ex ante calculation impossible or, at the very best, mostly
> guesswork. In other words, *prediction* of values is impossible. But the
> *calculation* of values still seems to me to be possible in principle. One
> needs to know the technological life of the machine and what its replacement
> prices *were* throughout its life.

Andrew, consider this simple example: I buy a computer. The expected
lifetime is 10 years. New technology makes me scrap it in 3 years. I
would say that the transfer of value takes place over 3, not 10 years,
but this transfer can be calculated only ex post.
andrew kliman wrote:

Michael Perelman
Economics Department
California State University
Chico, CA 95929
Tel. 916-898-5321
E-Mail michael@ecst.csuchico.edu