[OPE-L:5529] Re: Humbug Aggregate Price-Value Correlations

Duncan K. Foley (dkf2@columbia.edu)
Thu, 25 Sep 1997 09:08:19 -0700 (PDT)

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A comment on Andrew's OPE-L:5514:

Andrew remarks:

>The data lead to an unambiguous answer: yes, he did. MAD's of 20-27 0mply
>that the amount of value that is redistributed across sectors and across
>countries is not negligible. In other words, it is illegitimate to conclude
>that the factors which cause redistribution of value are unimportant in
>accounting for ("explaining") observed price magnitudes.

I'm intrigued by the idea of measuring the price/value deviation by the
amount of surplus value actually redistributed across sectors. This is on
the trail of an economically meaningful measure of the dispersion, which,
as I said in an earlier post, seems very desirable in this debate.


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