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To: Don Lloyd who wrote (101043)	5/10/2001 3:03:52 AM
From: Skeeter Bug	Read Replies (1) \| Respond to of 436258

>>What does determine the price of a computer<< alan greenspan has de facto power to make that determination and he has. >>In this case the contribution to GDP remains the same as the total revenue has not changed even though productivity has increased.<< this is where people (incl alan.com) get confused. micro productivity has increased. we don't know what happened to macro productivity. why? you didn't mention what the displaced workers did. if they went and created revenue somewhere else then macro productivity increased. if they did not then macro productivity did not increase. gdp is a macro measure. alan.com saw the micro productivity increase. however, revenues from displaced workers did not rise enough to suit his paradigm. therefore, he said a computer isn't really worth what people pay for it. it is worth what i say it is worth - somewhat more than people pay for it. therefore, gdp is no longer an economic number. if computer prices went to $1 but alan.com valued them at $1500, gdp growth would skyrocket! everyone would buy 3 computers for $3 and add $4500 to gdp. how dumb is that. but it is alan.com's system. he is all knowing and the markets are dumb. wrt to your argument - that productivity increases may not all be good - you have a great point. look at dram. they increased productivity so much that many nearly went bankrupt. then again, how economically productive is it to increase supply well above demand? productivity in the traditional sense (increase unit output per unit time) is different than economic productivity. gdp is economic productivity - or so it should be. the dram industry is the poster child of increasing unit productivity so much that it resulted in reduced economic productivity. many factors do come into play that will impact the outcome. the nature of competition. supply / demand dynamics.