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This is true in a friction-less market with total information symmetry. No such market has ever existed.
by croon 5mo ago
This is true in a friction-less market with total information symmetry. No such market has ever existed.
- WalterBright 5mo agoYou are correct that there is no friction-less market. However, lack of information is called "risk", and risk strongly affects what you will pay for something. A low risk deal will cost you more than a high risk deal. Risk is part of every transaction in a market economy, and is priced in.
- croon 5mo agoOk, branching from your previous post again, why isn't what you're describing happening? https://fredblog.stlouisfed.org/2023/03/when-comparing-wages-and-worker-productivity-the-price-measure-matters/ https://fredblog.stlouisfed.org/2023/03/when-comparing-wages...
- WalterBright 5mo agoThe article starts out being wrong by using wages rather than total compensation. The latter is the complete pay package, which includes paid time off, health insurance benefits, retirement benefits, etc. These typically add about 40% to the wages/salaries.
- croon 5mo agoThis doesn't matter when the entire graph uses the same data. The growing divergence isn't because of differing accounting.