I have the exact same feeling about this; regardless any objection on the relevance of the topics, I think that such an indeep questioning about one subject or another was/is not at all the intent of SHOE.
Thanks,
Daniela Parisi
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Da: Societies for the History of Economics [[log in to unmask]] per conto di E. Roy Weintraub [[log in to unmask]]
Inviato: domenica 18 aprile 2010 3.46
A: [log in to unmask]
Oggetto: Re: SHOE: DISC -- Gunning -- Bubbles, Booms, and the Austrian Theory of the Trade Cycle
Colleagues: Although I may be the only one interested in this posting, I still would like to let folks know that I have asked the list manager to remove me from this SHOE List. Once upon a time, this list served to bring together announcements, information, and indeed community to the far-flung and isolated members of the HE community. It now no longer appears to do so, as a number of individuals have informed me, off list, that they have no interest in the limited range of subjects that appear, like Gresham's Law, to have driven out all other subjects. I hope that, if others feel the same way, the list owners at HES and ESHET will find a way to address the issue of reduced subscriptions. If others do not feel the same way, the list will go on as it has been doing. In any event, in the future please feel free to email me privately at [log in to unmask]<mailto:[log in to unmask]>. ERW
On Sat, Apr 17, 2010 at 7:30 PM, Pat Gunning <[log in to unmask]<mailto:[log in to unmask]>> wrote:
Robin, I must admit that I cannot follow your reasoning. Perhaps you could clarify. Here is what you say about the causes of an increase in productivity:
"When prices rise because demand has risen, it is reasonable for agents to respond by producing more, thereby increasing the productivity of the system. Further, it is reasonable for individuals to hasten their purchases in anticipation of further price increases. This, too, increases the productivity of the system."
I take it that you are proposing two causes of increases in the productivity of the system: (1) an increase in demand for consumer goods and (2) the expectation that the prices at which they buy capital goods (including consumer durables and land) will rise.
Neither of these is sufficiently specified for me to evaluate your claim. Let me start with the first: the idea that a demand increase could cause economic growth. Are you writing about aggregate demand? You cannot mean the demand for a specific consumer good. This cannot occur without an offsetting decrease in demand for another product, an increase in resource supply, a technological advance, or a reduction in demand for a capital good (a decrease in saving). To support your claim, you would have to specify much more than you do. Or if you are writing about aggregate demand, what else are you assuming? Again, you would have to specify much more before one could evaluate your claim.
The second cause is the expectation of a higher price which presumably would occur if one buys a durable consumer good or a durable capital good, including land. But why would someone expect the price of such a good to rise without an offsetting expectation that the price of some other good to fall? Again there must be other changes that are occurring that you have not specified.
It is difficult for me to make sense of your distinction between bubbles and increases in productivity if you do not specify more fully.
--
Pat Gunning
Independent economist
Groton, Connecticut
http://www.nomadpress.com/gunning/welcome.htm
--
E. Roy Weintraub
Professor of Economics
Duke University
www.econ.duke.edu/~erw/erw.homepage.html<http://www.econ.duke.edu/~erw/erw.homepage.html>
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