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To: Moominoid who wrote (59052)	1/18/2001 12:57:09 AM
From: pater tenebrarum	Read Replies (1) \| Respond to of 436258

David, i agree the US system's ability to cope is very likely better developed than Japan's. however, i believe that the old recipes (there is really only one recipe, which is cranking up the printing press) will eventually not work their magic anymore. but if a downturn were allowed to quickly work out the excesses, there are good reasons to believe that the US position would be better than Japan's, no doubt about that. and likewise we certainly agree that the article i posted originally is exaggerating the effect of hedonic adjustments on the inflation data. note however that BLS uses several assumptions in its inflation computations that are open to debate, from geometric weighting to perfect substitution. and as we all know, the government has a big vested interest in making inflation appear as low as possible. likewise you've hit on the main problem with quality adjustments: namely how to develop objective standards for same? they do make sense on the face of it, but the way it's done right now, they don't. i refer you to Dr. Robert Gordon's study on the subject, as well as Jim Grant's observations for further information. here are a few links (note, they mainly are concerned with the effect on the productivity data, which is also my main beef, along with the GDP growth overstatements, which to me seem excessive in the extreme. if indeed productivity were boosted as much by IT as the proponents of the new era proclaim, we should be able to measure the effect without having to resort to the artificial boosters.but let's not get into a chicken/egg type debate. anyway, this should at the very least make for interesting reading). faculty-web.at.northwestern.edu grantspub.com