I guess that I would say go ahead and measure profit rates, but keep in mind that they are very noisy indicator.
Doug asked why not include software in the capital stock? I don't know the correct answer, but how the measure the software? Is the retail price a correct indicator? Is an antitrust act led to competition for Windows, lowering the price, would that mean that business would have less capital? On Fri, Jan 10, 2003 at 08:18:45PM -0500, Paul_A wrote: > You make a very valid point. Also, as I understand it, you are saying that > the measurement is empirically difficult but not conceptually flawed (since > we are unabashedly measuring the cost of capital in the context of a ratio > and NOT pretending to 'measure capital' to then make 'what if' comparisons). > > In that case, and since we will never get better historical data, where do > you thing we should go with this line of inquiry: > > - proceed, but beware (use sensitivity analysis, trust only big enduring > trends, etc)? > - forget about this line of approach? > - do the analysis but avoid any conclusions? > > Paul > > At 09:39 AM 1/10/2003 -0800, you wrote: > >To beat on a not yet dead horse, of the major problems in estimating a > >rate of profit is the denominator -- the capital stock. Most of the > >debates center around the measurement of total profits, but the capital > >stock is the truly difficult part to measure. > > > >In recent decades, investment has been shifting from long-lived capital > >goods and buildings to capital goods of a very uncertain lifetime. I > >believe that even software is now suppose to be part of the capital stock, > >but I'm not sure. > > > > -- > >Michael Perelman > >Economics Department > >California State University > >Chico, CA 95929 > > > >Tel. 530-898-5321 > >E-Mail [EMAIL PROTECTED] > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]