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Politics : Ask Michael Burke
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To: Don Lloyd who wrote (73880)1/17/2000 3:45:00 PM
From: Nadine Carroll  Read Replies (4) of 132070
 
Don,

Thanks for the link. I didn't know they used hedonic dollars (or whatever they call it) for the CPI too!

So let me see if I understand this. Let's say that last year I paid $1000 for a 200MHz machine, and this year I paid the same $1000 for an equivalent 400MHz machine (to keep it simple).

So for the CPI calculation, the price of computers fell by 50%.

But for the GDP calculation, the production of computers rose by 100% (assuming the same dollar level of sales YOY).

Can this be right?! If so, no wonder all our economic statistics look so rosy!
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