Estimating the Present Value of Future Income Losses 1900-1982; An Historical Simulation: Author's Reply
作者回应Bryan和Linke对其估算未来收入损失现值基准序列的四点批评，澄清误解并承认部分错误，但坚持主要结论不受影响。
Professors Bryan and Linke point out four apparent shortcomings in my benchmark series of ex post estimates of the present value of lost wages to which three a priori methods of estimation were compared. The first of their four criticisms represents a misunderstanding of the definition of my benchmark series. They are correct on the second and third points, although I do not believe that my results are thereby impeached. I disagree with them on their final and major point. Their first criticism is that the methodology I used would encompass the ex post choice of a maximum yield, single security portfolio (e.g. buy International Computers and Tabulators common stock in 1933 and finance 30 years of wage payments for a song by selling IBM shares as needed). Hence the exclusion of common stocks from consideration is arbitrary. But if they had been included, the existence of a portfolio such as the example above would have made a priori comparisons meaningless. As Bryan & Linke note, the inclusion of capital gains in an ex post benchmark in which portfolio adjustment is allowed means that there is no longer a clearly definable limit to the rate of return. Every twist and turn of capital asset prices is potentially exploitable and the maximum return strategy reaches unworldly rates of return before disappearing into a welter of transactions costs and bid-ask spreads. My article clearly states that, Bonds purchased are assumed to always be held to their In footnote number 15 the same point was made: A strategy of seeking capital gains in bond portfolio management is irrelevant to the purpose of the study in that it would be operationally indistinguishable from the common stock and commodity investments that are excluded by the courts from consideration in present value calculations. Thus my benchmark represents the ex post cost of financing wage replacement under the assumption that funds remain invested at the highest available interest rate at all times. However, no instrument whose maturity is longer than the need for funds is ever purchased, and no instrument is ever sold before its maturity. This is by no means conceptually unachievable. For