[PEN-L:2740] Re: 2 Questions

[Michael Perelman <michael@xxxxxxxxxxxxxxxxx>]

Rob, thanks for your response, but as I just wrote to Peter, I was talking in
terms to total factor productivity, which is measured differently.  Even so,
suppose that we are talking about bushels of wheat per worker.  Productivity
might be going up in physical terms, but if wheat prices are falling and we
measure wheat in monetary units ....

Rob Parenteau wrote:

> Michael -
>
> I am not sure about the linkages in your first question on productivity
> measurement during highly competitive periods. When competition is high,
> product prices should be low, so the value of nominal sales may be low for
> firms. But productivity is generally measured using real output per labor
> hour or per real capital "unit". So I am missing the reason why measured
> productivity would necessarily be low during highly competitive periods,
> unless you are working with some kind of view that states the glut of
> capacity forces most plants to work below their technologically optimal
> level of production.
>

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx