[OPE-L:4168] Re: measuring the value of money

Duncan K. Fole (dkf2@columbia.edu)
Fri, 7 Feb 1997 19:47:48 -0800 (PST)

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In reply to Andrew T.'s OPE-L:3943:

There is a very nice relation among the Monetary Expression of Labor,
(MEL), the "GDP deflator" and the "productivity of labor":

MEL = GDP/N = (GDP/Real GDP Index)(Real GDP Index/N) = Price Level x Labor


>In reply to Simon (OPE-L:3927):
>It does seem to me that there must be a measure of aggregate productive
>time if any empirical work is to be done using time series data. This
>enables a
>measure of the value of money to be calculated (if we follow the "new"
>It also potentially enables to construct a Marxian price index. Much of
>empirical work use standard price indices which derive from neoclassical
>theory -
>the intention being to model the changes in utility over time. (e.g. the
>index is an approximation of Hicksian changes in utility). If we can
>measure changes
>in value (labour time adjusted for skills, productivity etc) then could this
>an alternative price index? This may be a crazy idea, but any thoughts
>One question: to those who prefer to work purely with time series
>which are measured in monetary units, in their empirical work. How can
>changes due to inflation be dealt with. I have looked at the literature and
>it is
>never really mentioned up front. I would be interested to know if there is
>a convenient
>trick or assumption which I have missed.
>In solidarity.
>Andrew Trigg

Duncan K. Foley
Department of Economics
Barnard College
New York, NY 10027
fax: (212)-854-8947
e-mail: dkf2@columbia.edu