Re: RE: Re: RE: Re: Re: Those questionable productivity numbers

[Doug Henwood <dhenwood@xxxxxxxxx>]

Eric Nilsson wrote:

> Doug wrote:
>
> > The price indexes for computers are truly
> > stunning, turning nominal increases of 5-10% into real increases of
> > 50%. U.S. GDP growth without computers over the last year is 5.2%;
> > with, 5.7%. In the GDP accounts, final sales of computers grew $24
> > billion in nominal terms (99Q2-00Q2), which was inflated into $131
> > billion in real terms.
>
> ^^^^^^^^^^^^^^
>
> I understand the first sentence - it claims that computer related stuff is
> more-or-less 50% better now than in the recent past.

No, it implicitly claims that stuff gets 5 to 10 times better over
the course of a year. 5-10% nominal inflates into 50% real.

>  (I question this,
> though, for most of my uses 1989 WordPerfect worked better than 2000 Word
> and I _regularly_ have to reinstall Windows 98 on my home computer because
> the operating system starts doing strange stuff after just a few months - my
> God my lost productivity during that period of time! I could have, say,
> mowed the lawn. I never had to reinstall DOS. Are not most productivity
> measures for computer are based on raw computing power?

Yes.

>  Actual improvements
> in what the product does for the consumer are much less than this.

Exactly.

> But I don't understand how nominal $24 b becomes real $131 b.

Heroic assumptions about declining prices.

Doug