The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: GraceZ who wrote (38102)	8/16/2005 2:17:44 PM
From: gpowell	Read Replies (1) of 306849

Good post. It illuminates the comprehension problem that some of your inquisitors here are having because they make an implicit assumption that the output of US manufacturing is best represented by a dollar measure (constant dollars or not). As your post explains, the extent to which a dollar measure is a fair representation of output hinges upon the degree of goods homogeneity (implying a homogenous capital structure, as well). The irony here is that an assumption of a homogenous capital structure is one of the defining characteristics of a Chicago school economist – the school most closely associated with the monetarist tradition. I guess it is a measure of the success of the monetarist school that even it’s most glaring failures are implicitly accepted as reality by non-economists. Any realistic measure of the output must be a vector, representing, at the very least, the quantity and type of produced good. I would argue that some measure of the time embodied between the applications of various inputs represented by a particular instance of output should also be reflected.

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