August 12, 2015

IT'S IMPOSSIBLE TO OVERSTATE THE PRODUCTIVITY INCREASES AND DEFLATION OF THE PAST FEW DECADES:

Miracles of productivity hidden in the modern home (John Kay, 8/11/15, Financial Times)

I can tap my smartphone and a cab will arrive almost immediately. Another tap will tell me the latest news, value my share portfolio or give me route directions to my next meeting. I can instantly find the time of a train to Margate, the weather in Majorca, download a rail ticket and receive a boarding pass for my flight. As a result, I do not need to stand on a street corner vainly trying to hail a taxi to the theatre, lose myself in London streets, miss my train or queue at a check-in desk. I can chat to friends, or arrange a loan, while appearing to pay attention to a dull meeting.

The changes that have occurred in the past decade have, from an economic perspective, increased at virtually no cost the efficiency of household production. Trying to account for this kind of development is the considerable challenge that George Osborne, the chancellor of the exchequer, has given Sir Charles Bean, former deputy governor of the Bank of England, in asking him to review how the UK's official statistics are compiled.

The data framework within which economic analysis is conducted is largely the product of the second world war. 

Posted by at August 12, 2015 7:20 PM
  

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