Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Steve Lee who wrote (16430)	3/7/2002 9:14:19 AM
From: Mike M2	Read Replies (3) of 74559

Steve, the dubious rational behind hedonics is the deflator is supposed to reflect increased performance for a reduced price. In the case of PCs you get more power and performance for less money so the gov't decide the current dollars spent on PCs understate the economic impact on the economy. It's too bad Gateway can't report their results in hedonicly deflated dollars - they would be quite profitable. In reality, the impact of the hedonic deflator was to create the illusion of stronger growth and productivity than what was happening in the real world. BTW to the best of my knowledge no other major industrial nation uses this technique- unless it has been done recently. mike

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