Gil says
>
> But Mike, if you _know_ this, then presumably "the market" does too,
> and thus the capital's value is not subjective, contrary to
> suggestion--no matter what the present delusions of the current
> owners.
>
> Gil
>
Michael responds:
I have to disagree with you here. Even if we assume that markets "know" [and
remember that knowledge of the value of a capital good requires the knowledge
of the present value of the future returns from the good], markets only enter
into the picture when the capital is put up for sale. Stocks and bonds are
continually sold on the market; capital goods rarely, and when they are sold,
the markets are thin. Do you agree?
-- Michael Perelman Economics Department California State University Chico, CA 95929Tel. 916-898-5321 E-Mail michael@ecst.csuchico.edu