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To: GST who wrote (129354)	7/30/2001 10:16:16 PM
From: Skeeter Bug	Read Replies (3) \| Respond to of 164684

>>Productivity growth is NOT the same thing as GDP growth<< never said it was. labor productivity (the one quoted on cbs, et al.) = gdp/worker/hr (iow, revenue per hour worked). this was pointed out in my last note. as you can see, a change in gdp impacts productivity. but, then again, so does a change in worker hours. if you tell me the change in gdp AND THE CHANGE IN WORKER HOURS, then i'll tell you the change in labor productivity. gst, i don't define productivity. i didn't pull this out my butt. the link i referenced CLEARLY defined what it was. spend some time and research it. don't tell me what you THINK. tell me what you KNOW and the source of that KNOWLEDGE. don't get mad at me, though, and accuse me of directly correlating productivity exclusively to gdp. when i say "productivity," i am referring to something very specific, not some general concept. when the govt reports on "productivity," it reports on something very specific. labor productivity is the BIG, high profile number. when they report a change in "productivity," they are talking about a change in gdp/hours worked. productivity = gdp/hours worked. you can define it anyway you want, you have that choice. hey, define a foot as 16 inches, for all i care ;-) however, to have a meaningful conversation, we need to understand the definitions. i researched it. you would do well to do the same. let us know your results. a couple thoughts: 1. do you REALLY believe the govt is in the business of counting individual items that get sold? does qualcomm send in to uncle sam how many phones they sold? same for snickers and candy bars? what about paper clips and staples? no way! this is absurd! in order to arrive at a productivity number defined by units produced, the govt would have to track these numbers (and a whole lot more!) and then provide a relative weighting to make them comparable. iow, how do i aggregate a 20% unit productivity increase in q-phones to a 3% productivity increase in paper clips? do you think the govt does this? NO WAY! 2. refresh yourself on econ 101 or take the course, if you haven't already. our economy is AWSOME in the fact that there is a single common denominator. ultimately, american business in the business of CREATING DOLLARS! widgets are secondary! you want REAL "productivity?" CREATE MORE DOLLARS PER WORKER HOUR! no wonder that is how come labor productivity is defined the way it is. nobody cares about widgets. everybody cares about dollars. 3. tell me, did micron increase REAL "productivity" by over producing their units and slicing revenues in half due to a supply imbalance? i'd argue that they used their resources in a very unproductive manner - they made crap nobody wanted to buy at a profitable price. those resources could have been used more "productively" (ie, generated more dollars/worker hr) somewhere else. 4. the govt gets revenue data from companies (sum up revenues and you get, voila, gdp! ;-) and uses it to gauge economic productivity - gdp/worker hr. 5. don't be mad at me. i didn't define "productivity." i just live by the definition. here's another link... >>(measured as output per hour worked)<< note - output is measured in the economy's common denominator, dollars. remember, the govt doesn't count paperclips, staples and every other product sold in this nation and then aggregate it into some melting pot of units. why? dollars work much better. clev.frb.org