| Sumario: | Authors of this article have conceded that their initial effort should eventually come to be replaced by a more complex approach to econometrics, involving a structural model in which price, wage and shifting behavior are specified; and all equations are identified. While the required data are exceedingly difficult to obtain, such a reformulation may eventually be forthcoming. Such a model may not only provide better information on total shifting, but also show how shifting comes about and what "direction" it takes. It is with great anticipation, therefore, that one could follows beyond the opening pages of a recent article by economist R. J. Gordon, where such an approach appears to be taken. But as the paper proceeds, it becomes apparent that no such improvement is offered. Gordon begins with a model for a tax-less world. He defines profits as sales minus costs, with costs a function of quantity, wage rates and material prices. Sales equals product price times quantity, where price is determined by a behavioral equation involving mark-up prices. This assumption is worth testing, although other behavior hypotheses might have been used as well.
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