An old Siglitz paper on the Limitations of the Price Norm

Which Brad referenced in a post about pricing CO2 emissions.

The paper is gated, but I assume Stiglitz explains that at equilibrium all inventory variances will drop to zero, and the price point reaches the informationally useless level of zero. Another statement is that at equilibrium, all sectors are perfectly decorrelated and price comparisons across products fail.

In fact, producers might find alternative uses for a product in surplus and thus inflate the production line. Stiglitz would be led to either of two conclusions, 1) Another Norm emerges which is informationally useful, or 2) we end up back with Creative Destruction. My argument is that Stiglitz is stuck with Constant Uncertainty, hence he had proved Keynes wrong. Kling started this focus a few years ago when he stated we need a non-price norm to understand change.

We know what the basic underlying Norm is for the economy, and that price comparison is an approximation.