From: glevy@PRATT.EDU
Date: Sat Apr 29 2006 - 08:20:42 EDT
Hi Jurriaan,
Thanks for the reference to Utz-Peter Reich's book (and, of course, for
your other observations as well). Looks interesting.
See below for an abstract of a recent paper of his on path dependence.
Are there other connections than those suggested below on path dependence
in the measurement of value?
I have attached a recent paper by him on "The Role of Money in the
measurement of Value".
In solidarity, Jerry
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Path Dependence of the General Price Level: A Value Theoretic Analysis
UTZ-PETER REICH
University of Applied Sciences Mainz
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Review of Income and Wealth, Vol. 50, No. 2, pp. 229-242, June
2004
Abstract:
The paper examines path dependence of price indexes, a problem
that has become acute after international adoption of chain
indexes for price and volume changes in the SNA93. Path
dependence is an old issue of index numbers, and has been in
the way of using chain indexes ever since their invention. The
paper accepts chaining at its start, and tries to develop a
sound deflation procedure from there. In this analysis path
dependence is less an issue of appropriate formalization of a
given concept, the traditional approach in index number
theory, but rather a problem of developing an interpretation
to a given and now worldwide recommended statistical practice.
The key issue is found in the fact that money is not only the
standard means of payment, concerning central banks, but also
the standard of value in an economy, a feature that bears
directly on the compilation of price indexes and national
accounts. As a result, a chained weighted index is shown to be
path independent, if it is interpreted as a change not of
prices, but of the unit of account in which prices are
expressed.
Suggested Citation
Reich, Utz-Peter, "Path Dependence of the General Price
Level: A Value Theoretic Analysis" . Review of Income and
Wealth, Vol. 50, No. 2, pp. 229-242, June 2004 Available at
SSRN: http://ssrn.com/abstract=545856
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