Jim Devine wrote: "Drewk, thanks for the references and the useful critique of C&C, Ochoa _et al_. "
De nada. "if it turned out that there was perfect correlation between values and prices, it would be a strike against Marx's LOV. " I agree. "1. for Marx's LOV, shouldn't it be labor productivity that affects prices, not the multifactor productivity? "(In my opinion, MFP is a bogus concept. It's based on adding apples (labor-power hired) and oranges (means of production) using weights that assume that each factor is paid its marginal product.)" Marx's notion of "labor productivity" refers to total labor, dead plus living. I didn't use the BLS labor productivity series because it refers to living labor only. I thought that MFP would be a better proxy for Marx's notion. Perhaps not, in light of your comment. Do you think the marginal productivity assumption causes sizeable distortions? "2. isn't it commonplace for economists to say that productivity increases lead to price falls, cet. par.?" Yes. (See also my reply to Doug Henwood.) "3. how did you deal with the fact that most time series tend to be highly correlated with each other even when causation is absent?" Well, I was using the 1st-differenced data, i.e., inflation rate, productivity growth rate, and real GDP growth rate as a control. And the correlation is negative in this case, so I doubt that there's a spurious regression problem here. But I didn't run a formal test, which is one reason why I say my estimate is preliminary. Andrew Kliman ------------------------ Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine Drewk, thanks for the references and the useful critique of C&C, Ochoa _et al_. I'll have to look at your paper. As mentioned, for me the law of value involves not only some correspondence between relative values and relative prices -- expecially on the aggregate level -- but also deviations (so that people inside the system don't see how capitalism is actually working). So if it turned out that there was perfect correlation between values and prices, it would be a strike against Marx's LOV. As for your macro-correlation between "multifactor productivity" and the CPI, I have some questions: 1. for Marx's LOV, shouldn't it be labor productivity that affects prices, not the multifactor productivity? (In my opinion, MFP is a bogus concept. It's based on adding apples (labor-power hired) and oranges (means of production) using weights that assume that each factor is paid its marginal product.) 2. isn't it commonplace for economists to say that productivity increases lead to price falls, cet. par.? 3. how did you deal with the fact that most time series tend to be highly correlated with each other even when causation is absent?
