[OPE-L:5562] RE: Luxury goods and profit rate

Duncan K. Foley (dkf2@columbia.edu)
Thu, 2 Oct 1997 05:56:58 -0700 (PDT)

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In reply to Ajit's OPE-L:5533:

>At 09:55 24/09/97 -0700, Duncan wrote:
>>>Well, in principle, one can always observe the total number of direct labor
>>>spent in an economy, say UK in 1997. Of couse, one will have to convert the
>>>skilled labors into unskilled labor hours. Let's assume that we agree on
>>>conversion factors. We could also estimate the total amounts of various
>>>goods and services consumed by the working class as a whole. We can
>>>definitely observe the technology with which these goods and services and
>>>their raw materials are produced.
>>I guess this is something of a weak link in my view. If you mean that
>>input/output tables represent the technology used, then I would argue that
>>input/output methodology is in fact a highly indirect way of inferring the
>>technology used, since it is a transformation of the market price
>>transactions in the market. That's not to say that there's no information
>>in the input/output tables, but it seems to me putting the cart in front of
>>the horse to argue that input/output tables are closer to the "real"
>>economy than the market price data on which they are based.
>>Cheers, Duncan
>I'm not sure if I understand this. Are you talking about choice of
>techniques and its dependence on prices? Cheers, ajit sinha
No. When you say "We can definitely observe the technology with which these
goods and services and their raw materials are produced", I'm pointing out
that the only method available to us right now to do this is input/output
matrices, which are based on market price value transactions, not on direct
measures of physical inputs. Are you proposing some other way to measure
the technology coefficients?


Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
fax: (212)-854-8947
e-mail: dkf2@columbia.edu