Definition: Lemons

National accounts

Lemons is used in the literature on capital measurement to mean defective capital goods. It is sometimes alleged that prices of second hand assets are biased downwards because buyers assume that the sellers are disposing of their defective assets or “lemons”.
Organisation for Economic Co-operation and Development (OECD), "Measuring Capital - OECD Manual: Measurement of Capital Stocks, Consumption of Fixed Capital and Capital Services", Annex 1: Glossary of technical terms used in the Manual, Paris, 2001

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