By Robert J. Gordon
American enterprise has lately been less than hearth, charged with inflated pricing and an lack of ability to compete within the foreign industry. in spite of the fact that, the proof offered during this quantity indicates that the company group has been unfairly maligned—official measures of inflation and the traditional of dwelling have did not account for growth within the caliber of commercial gear and buyer items. companies have really accomplished better productiveness at reduce costs, and new items are lighter, swifter, extra power effective, and extra trustworthy than their predecessors.Robert J. Gordon has written the 1st full-scale paintings to regard the level of caliber adjustments over the complete diversity of sturdy items, from vehicles to airplane, pcs to compressors, from televisions to tractors. He combines and extends present equipment of size, drawing facts from resources, shopper studies, and the venerable Sears catalog.Beyond his vital discovering that the yank economic system is extra sound than formally famous, Gordon provides a wealth of anecdotes tracing the postwar background of technological development. Bolstering his argument that more desirable caliber has to be correctly measured, Gordon notes, for instance, that cutting-edge mid-range own desktops outperform the multimillion-dollar mainframes of the Nineteen Seventies. This striking ebook can be crucial analyzing for economists and people within the company neighborhood.
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Extra resources for The Measurement of Durable Goods Prices (National Bureau of Economic Research Monograph)
Conversion of the entire set of NIPA deflators to the Tornqvist weighting methodology should occur formally at the next benchmark revision, and in the meantime the BEA should publish an article with alternative indexes of real GNP and its components based on this superior weighting method. At the level of individual prices, in the 1970s and 1980s the PPI is most prone to an upward bias in measuring the prices of electronic goods.
09 points after 1973. 51 points in the new data. 61) of the needed explanation of the post- 1973 productivity growth slowdown. 35. 5 What Is Wrong with the PPI? The enormous difference between the alternative price indexes and the PPIs for the same products raises difficult questions for specialists at the BLS. Here, I can only speculate, for a fundamental limitation on anyone’s ability to resolve this quandary is the confidentiality rule that prevents outsiders from inspecting individual price quotations.
29 Introduction particularly stark example, the weight given in 1983 to electronic receiving tubes was greater than to integrated circuits of all types. l 6 4. For many traditional product lines, where the pace of technical advance is slow, the PPI is entirely adequate, as is confirmed by the low rate of drift in numerous product categories in the 1970s and 1980s. But when technological change is rapid, the PPI is subject to a fatal weakness in its basic methodology of relying on reporters, that is, officials in manufacturing firms who have little concern with the purposes of their PPI price reports, to flag quality improvements and to introduce new models.