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To: Skeeter Bug who wrote (129533)	8/2/2001 1:54:28 PM
From: Alomex	Read Replies (1) \| Respond to of 164684

that article is owned by mis quarterly. It is. It summarizes arguments from academics that debunk Solow's paradox. The equation is simple: dollar output / hours worked. Wrong. This assumes that none of the savings are passed on to consumers. If the number of hours worked goes down in half, and the price goes down in half (much as it happened to aluminium at the turn of the century) you "equation" wouldn't report an increase in productivity, even though clearly a major one had just taken place. if prices fall too much, too fast (computers), isn't that b/c resources are used unproductively? ??? How else is productivity going be measured if not by getting more for the same???? That's the textbook definition of productivity. You are now grasping at straws by trying to make the fall in computer prices an indicator of lack of productivity. should drastic increases in unit productivity drive revenues lower and companies out of business? Actually yes. This is known as the principle of Creative Destruction first posited by Schumpeter and Drucker. why didn't all the displaced workers generate revenue for some other company (especially given recent low unemployment)? Did I miss something? Haven't we just witnessed ten years of economic boom that raised the standard of living to unprecedented levels?