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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: Moominoid who wrote (10969)	11/4/2001 10:05:23 AM
From: Don Lloyd	Read Replies (2) \| Respond to of 74559

David - Most products follow a life history that, if continued, would turn them into non-economic goods (free goods), as their production factor content is continually reduced and competition forces final product prices to track. This process stops short only because the production of free goods is ultimately unrewarding. It should be clear that adjusting economic statistics to maintain the significance of products as they become free goods is absurd. It should also be clear that this is part of a continuous process, not a sudden phase change from something that should be adjusted to something that must be ignored. Even given the dubious assumption that macroeconomic measurements are substantively meaningful, those measurements simply have to reflect the reality of the total prices actually paid for actual given products. Neither adjustments to reflect past expenditures nor adjustments for perceived quality changes can have any logical justification if they try to deny the reality of current total product expenditures. The quality of a given product is a requirement for it to survive against its competition, not something that can be adjusted for beyond what consumers will actually pay for. Regards, Don