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Politics : Ask Michael Burke

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To: BGR who wrote (84203)	10/14/2000 10:12:49 AM
From: Mike M2	Read Replies (5) of 132070

BGR, I think we all agree that the US is growing at a faster rate than Europe the disagreement lies in the magnitude. The numbers you want are in Dr. Richebacher's " Euro Travails" article at wwww.gold-eagle.com The Bundesbank has noted that comparisons of growth rates between germany and the US are distorted by hedonic price adjustments. Had hedonic pricing been applied to German computer investment in 1998 the growth would have been DM 64 billion or twice as high as reported. Last year the US started counting computer software as capital investments instead of business expenses. This change added $192 billion to US GDP last year and will add an estimated $225 billion this year. This change also boosts corporate profit since the depreciation charge is a fraction of the expense. We don't need to argue about the merits of the methodology but must recognize the substantial impact of different metrics. I'll put up some more #'s tommorrow. BTW I think Heinz is one of the best thinkers on SI. The Richebacher Letter 1217 St. Paul St. Baltimore, MD 21202 Mike ho ho ho

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