Economics as She Is Spoke

Here is the proof. Take the good whose price falls with respect to all other goods’ prices in the economy. The percent change in that good’s price must be a weighted average of the percent change in the prices of its inputs. This means that there must be at least one input or factor whose price falls by more (in percentage terms) than the output price. The owner of this particular factor must be worse off then in relation not only to that good’s price, but in relation to all other prices as well.

Dani Rodrik ((Once someone did the math to confirm this intuition, do the rest of us have to be burdened with the Greek letters?))

2 thoughts on “Economics as She Is Spoke”

  1. No, that’s awfully wordy.

    I pity the fools who had to learn all Economics like that. Think prior to the ’40s. And then there was less Economics too.

  2. All I’m saying is put in the appendix. It drives me nuts that papers have pages of equations but often leave out the raw data. I can always re-derive theorems, but without data its impossible to re-derive a regression.

    Priorities are all screwy.

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