Sunday, March 6, 2016

Real Productivity Decline

Crossing that bridge with lessons I've learned
Playing with fire without getting burned

This essay argues against the premise that downward trends in US productivity metrics are primarily artifacts of the measurement system itself (e.g., failure to capture info tech gains from innovations such as search engines and social networking).

The author cites recent research that challenges the mismeasurement hypothesis. Findings suggest that the proposed positive info tech spillovers fail to realistically account for the magnitude of lost productivity. Moreover, downward trending productivity is not just a US phenomenon but one that is occurring in dozens of developed countries at approximately the same time.

I would argue more directly that if info tech or other developments are truly 'innovative,' then their influence in improving general output per hour as any productivity enhancing tool should be readily apparent in the data.

As these pages have noted, the more likely explanation is that the loss in productivity is real and related to declining worldwide savings which reduces capital in the system available for productivity improvement projects.

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