From: 160955r@garnet.berkeley.edu
Newsgroups: soc.culture.turkish,talk.politics.mideast,talk.politics.soviet,soc.culture.soviet,soc.culture.greek,soc.culture.europe
Subject: Re: 'Obstfeld' Of Berkeley Would Be Happy To Hear Your Joke, 'Radu.'
Date: 8 Apr 92 22:14:53 GMT
Article-I.D.: agate.rvr8tINNnac
Organization: University of California, Berkeley
NNTP-Posting-Host: garnet.berkeley.edu

In article <m0lYQII-0003RGC@ddsw1.mcs.com> han@anadolu.michigan.com (hasan.b.mutlu) writes:(addressing me)
>
>You must surely be confusing 'the law of one price' with 'purchasing 
>power parity (PPP).' There is a difference between PPP and the law
>of one price; the law of one price applies to individual commodities,
>while PPP applies to the general price level, which is a composite
>of the prices of all commodities that enter into the reference basket.
>I hate to disappoint you but PPP is the best estimator.
>
Hasan (or whatever you name is)!  I am not confusing the two things (that have
nothing to do with each other) The Law of One Price (Say) has nothing to do
with comparing living standards between countries...It eventually dawned upon me that you prattle about things you have idea whatsoever about. Saying that my
previuos posting implied a confusion between PPP and the Law of One Price is
equivalent to saying that the Archaeopterix is made in the USA or some other
incomprehensible gibberish...

>>serious economist believes in such comparisons unless they happen to bolster
>>his point 8 -). 
>
>What a joke. Are you claiming that David Ricardo (the originator of
>the theory of comparative advantage), Gustav Cassel and Krugman are
>worthless economists? I am sure 'Maurice Obstfeld' of Berkeley
>would be happy to hear your joke.

What the hell have Ricardo (theory of comparative advantage) and Krugman
(monopolistic theory of trade) have to do with believing in PPP? By the
way, PPP is conditioned by stability in long run real exchange rates. 
But what am I doing here? Arguing with you? Sorry! Also, Obstfeld wrote
the book you quoted as a text-book. He wanted to exemplify how PPP works.
It in that precise context he meant that Greece and Turkey are  comparable,
i.e. quoting the result mf the model he intended to teach. Believe me,
nobody, but nobody in the Economics world believes that PPP is a good
measure, given trade imperfections, exchange rate volatility, etc.

>
>>Turkey and Greece are located close to each other; their climate, natural 
>>endowment, etc. are pretty similar. In circumstances like these , a better 
>>estimator is the GNP/capita, which is $1630.00 for Turkyie (lowest in
>>Europe, since there is no data for Albania) and $6000.00 for Greece (Bilan
>>Economique et Social 1991-Secousses- Le Monde ). 
>
>Again, you are confusing 'the law of one price' with 'purchasing 
>power parity (PPP).' Proponents of the PPP theory argue that its
>validity (in particular, its validity as a long-run theory) does
>not require the law of one price to hold exactly. Thus, in terms 
>of 'Annual Output Per Person in Dollars Adjusted to Purchasing Power 
>Parity,' Greece is in the same category with Turkiye (see above scholarly 
>reference).


Oh God, not again! Hasan ! Listen to this: absolute PPP states nothing else
except that domestic price level is equal to the foreign price level *
by the exchange rate. The relative PPP states the same thing, in quotients.
What has this to do with the law of one price? Or to what I actally said?

>> Truth of the matter is that 
>>the average Greek lives 77 years while the average Turk only 67 
>>(same source) - again, the worst record in Europe. 
>
>What does this have anything to do with the PPP? Wish to hear Turkiye's
>competitiveness in ceramics and petrochemicals?

It has nothing to do with PPP, of course. It has a lot to do with the 
ORIGINAL  question, i.e. the living standards in the two countries..

>>The trained eye will soon uncover that economic Turkish
>>economic data place it in the same league with neighboring, Arab, non-oil
>>producing countries, and make economic comparisons with Greece unwarranted.
>
>I still fail to see how you can challenge 'Krugman' and 'Obstfeld.'

There is nothing to challenge in neither "Obstfeld" or "Krugman", who, I can
assure you are unbiased enough not to believe that living standards in Greece
and Turkey are comparable. Now that you are into economics I suggest you read a
few things about the inapolicability of PPP and why it can not be possibly
tested, etc. etc.

Also, I think I will follow the advice of other people on the net and include
your ID in my kill file. Think of it Hasan: we are here to exchange information
and maybe make a few friends, not to be bombarded by your redundant and asinine
postings. The law of One Price!! Jesus! How can you write absurdities like this?Do you know what you are doing? I mean, are you self conscious or live in some
sort of large, electronic delusion.? Man, one could get a PhD in psychiatry by
just publishing your "works"!  Adios, hasan B. Mutlu. I won't miss you and your
schizophrenic postings....
>
-- 
Radu T. Tomescu at UCBerkeley
Department of Economics
Xref: sparky soc.culture.turkish:4057 talk.politics.mideast:10457 talk.politics.soviet:3306 soc.culture.soviet:2946 soc.culture.greek:3203 soc.culture.europe:3605 soc.culture.german:2937