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Equation 11 · Part 2 · Selection Accounting: The Price Equation Runs the Economy

subscript

NeN_e
subscript

What this part means

The lower label selects a particular version, component, or indexed member of the quantity. For example, x₀ and xₜ can be values at different positions.

Its job in the formula

A subscript distinguishes a version, component, step, or member of a quantity. It does not automatically mean multiplication.

The passage around this formula

Under the empirically common case where productivity dispersion does not systematically favor large or small firms, that variance collapses to a clean statement: the noise in the selection term scales with the Herfindahl-Hirschman concentration index, an antitrust yardstick every industrial economist already computes as the sum of squared market shares, and the index’s reciprocal is the economy’s effective population size in exactly Wright’s population-genetic sense — the size of an idealized equal-share population that would generate the same drift. A hundred equal firms and one firm with half the market plus two hundred sharing the rest can have the same headcount and wildly different NeN_e…

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Learn the underlying idea

A subscript is a label attached below a symbol. It often selects a time step, component, category, or member of a sequence.

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Sources cited in the article section

These citations provide research context; check each source for the exact claim it supports.