Tuesday, January 17, 2006
Why Quantities in Economics Are Not Like Quantities in Physics
Working on a paper the other day, I hit upon what strikes me as a good way of illustrating the fact that economic "quantities" are never the equivalent of the objective, time-invariant quantities used in the physical sciences. Let's say that we have something as objectively measurable as a person's horizontal leap. That measure would not, however, be any constant gauge of the jump's economic significance. A leap that one day would make a man rich, because it established a new world record, on a later day might gain him nothing, if a longer jump had been made during the time interval in question.