[lbo-talk] An Orgy of Speculation?

[michael perelman]

There are different kinds of depreciation.  Accounting looks backward,
as Hicks insisted, using past patterns.  Economic depreciation takes
into account new technology, changing demand, ....

On Sat, Mar 5, 2011 at 9:11 PM, Jordan Hayes <jmhayes at j-o-r-d-a-n.com> wrote:
> Shane Mage writes:
>
>> The "market value of the structures and equipment" is not
>> their "replacement cost" but their *depreciated* replacement
>> cost (original cost times inflation rate since purchase  divided by
>> depreciation rate) ...
>
> I think you're confusing economics with tax policy.  Depreciation is merely
> a way of smothing out the tax consequence of capital investment.
> Depreciation is zero-sum, and (tax) revenue-neutral.
>
> /jordan
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-- 
Michael Perelman
Economics Department
California State University
Chico, CA
95929

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http://michaelperelman.wordpress.com