Re: [OPE-L] models with unequal turnover periods

From: Michael Perelman (michael@ECST.CSUCHICO.EDU)
Date: Thu Sep 06 2007 - 12:16:04 EDT

Yes, Jerry, you get what I am arguing.  What is the turnover of equipment?  It
depends upon new technology, market conditions, .....  You can look at the past &
estimate that computers have turned over every 5 years, but a 10 year old computer
might be just fine for typing a term paper.  Also, equipment is often put to good use
after it is obsolete for some purposes.  For example, old tractors in California are
still used for hauling irrigation pipes.

On Thu, Sep 06, 2007 at 11:48:33AM -0400, glevy@PRATT.EDU wrote:
> > Still playing on my one string violin, what about cases when the turnover
> > period for constant capital is unknown?
> Hi Michael P:
> Then you include it as a variable with an unknown magnitude in the model.
> There are different ways in which this could be done: e.g. one could make
> certain assumptions that could give you a _range_ for the variable.  This
> would, of course, introduce uncertainty into the model and mean that it
> wouldn't yield a single result.  Yet, this is uncertainty which is a
> consequence of the essential nature of the subject matter: i.e. it is
> _real_ uncertainty and shouldn't be eliminated for purposes of
> mathematical convenience.
> In solidarity, Jerry

Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael at

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