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To: Thomas M. who wrote (59257)	1/18/2001 2:07:10 PM
From: KeepItSimple	Respond to of 436258

>The PC buying company has to radically increase its inputs (in MHz, not in >$$$) just Another problem with the Hedonic method is that for PCs, it is almost entirely measured by CPU clock speed. However, as anyone who knows anything about electrical engineering will tell you, the CPU clock speed is a woeful measurement of the "speed" of a computer. PowerPCs, for example, tend to have lower clock speeds (about 3/4 of a comparable intel chip) yet are actually faster than an Intel chip. Does the BLS run benchmarking programs on PCs to determine what the CPU speed actually means? No, they just multiply the MHz by some value and allow this unreliable figure to become the largest single addition to the productivity statistic over the last decade. What I'm trying to say is that none of this shit (even outside computers) can be measured accuractely anyway, so they should just stop wasting our time. All this does is provide a "mystery" number that can be politically influenced to say whatever the party in power wants.

To: Thomas M. who wrote (59257)	1/18/2001 8:56:38 PM
From: Moominoid	Respond to of 436258

Our economic net worth has not gained. If the improved lifestyle or time saved actually helps the consumer become more productive at work I would argue that the improved lifestyle is what "economic net worth" is all about. That's what economists are trying to measure. If you want to measure something else that's fine but call it something else. My real income rises when the price of telephone calls falls so I can talk longer or spend more on other things. And when the amount of computer power per dollar that I can buy rises I am also better off. MHz, not in $$$) just to run the latest software. Since this software isn't much better and the company isn't improving its productivity very much (according to all stats we have), its TFP is falling off a cliff. It might well be. But the fault is in the software industry not the computer makers. I'm not sure whether BLS are trying to measure software which is much harder. Here I can see you guys have a point where quality improvements in only some industries are taken into account you get skewed numbers. And I ahve agreed several times that infaltion may be understated. All I said was the under-measurement could be nowhere near as much as in the article Heinz posted. That number was several times too large. David