"Max B. Sawicky" wrote: > > The 'true' rate is an economic concept, estimated > with hairy models, flaky data, and fuzzy math. >
It's also an economic concept in very poor epistemological standing, since it relies on being able to determine how much of the replacement cost of a capital item reflects genuine depreciation of the old one and how much reflects improvements in the quality of the new vintage of capital. In all but the very, very simplest cases, this implies a commensurability between capital of different vintages and gives rise to something like Joan Robinson's issues about the aggregation problem for capital. dd
