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Subject:
From:
[log in to unmask] (Mason Gaffney)
Date:
Thu Feb 8 08:05:44 2007
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Fred Foldvary writes:

The positive economics is
that we first need to understand how a pure market
functions, and then we can incorporate intervetion to
see how policy changes the outcome.

As an analogy in physics, a model can first assume the
absence of friction to determine the pure effect of
gravity, and then put in friction to see how that
changes the outcome.

Gaffney responds:

In Physics we have billiard balls on a frictionless plane, then let friction
"intervene". My point, repeated from earlier, is that the frictionless plane
is an intervention to begin with.

Mason Gaffney




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