[OPE-L:5560] Re: Humbug Aggregate Price-Value Correlations

Paul Cockshott (wpc@cs.strath.ac.uk)
Thu, 2 Oct 1997 03:15:50 -0700 (PDT)

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> (3) Next, assume that the price/value ratios (r) are wholly random. In
> individual case, price can be very high relative to value or very low.
> approximate this, assume that r is a random number evenly distributed
> say, 0 and 1,000,000.

Why assume that this distribution is rectangular.

If the price of an industries output was independent of the value of
its output, your number r would be the ratio of two random variables
which would not in general be rectangularly distributed. By assuming
a rectangular distribution it seems to me you are assuming a correlation
to start with.