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Pastimes : Austrian Economics, a lens on everyday reality -- Ignore unavailable to you. Want to Upgrade?

To: Jacob Snyder who wrote (113)	1/21/2002 2:42:45 AM
From: Don Lloyd	Respond to of 445

Jacob - ...If you consider each tiny incremental change to be the creation of a new product, totally de novo, whose price cannot be compared to any previous product, then, for you, the change in price of goods can only be measured in a totally static world. ... As I implied in the beginning, the entire concept of price indices itself is fundamentally flawed, in part due to the fact that subjective valuations simply are not constant. A belief in price indices is likely entangled with the equating of price and value with cost, one of many remnants of historically flawed economics. ...While the entire concept of price indices is incompatible with the Subjective Theory of Value that underlies Austrian Economics, this note only deals with the question of the appropriateness of quality adjustments per se, allowing for the fact that price indices will be published no matter how misguided they may be. Regards, Don