I see that there are several additional responses on this thread
which I haven't yet gotten to. I've been away for a bit. But the
question I am asking is different than in what technology or what
industries the productivity gains came from.
My question is more about what I think is the over-stress on what is
happening at the coal face and more about what is happening at the
cash register. (By cash register I am not talking about technology
where the operator doesn't need to be able to add and subtract but
merely press on a picture, though cash register technology surely
contributes to productivity gains.) What I mean is that consumer
demand is a factor in productivity gains. If people aren't buying
stuff, i.e. increasing their buying, productivity gains won't come,
will they? I mean, why bother improving if you (the producers,
collectively) can't sell more.
That's behind my reference to Greenspan. Did he understand this,
that he needed to keep the bubbles pumping, in order to keep
productivity gains up?
Gene Coyle
On Sep 22, 2007, at 5:51 AM, Daniel Davies wrote:
I think the remaining critique - Doug is right that the pro-boost
side has
basically won this argument - is that the productivity gains seemed
to be
very heavily weighted to retail and to financial services, which
are the two
sectors where it's most difficult to separate productivity and
value-added.
But as far as financial services is concerned, productivity has
genuinely
increased massively - just look at the growth of electronic exchanges
compared to voice or open outcry. Massive computerisation of
insurance
underwriting too in the last ten years.
best
dd
-----Original Message-----
From: PEN-L list [mailto:[EMAIL PROTECTED] Behalf Of raghu
Sent: 21 September 2007 23:31
To: [email protected]
Subject: Re: Queery about Greenspan and productivity
If I understand correctly much of the late 90's productivity gains
came from the computer industry itself. i.e. businesses buying all
those computers were not getting much for it, but the computer
industry being dominated so heavily by fixed costs, any additional
sales of say a Pentium chip or Oracle software would be almost pure
profit thereby generating massive apparent productivity gains.
http://www.nber.org/~confer/2001/prods01/stiroh.pdf
What is surprising is productivity did not actually drop merely
decelerated after the crash. Maybe it has something to do with mass
layoffs, or maybe with some real gains from technology like targeted
advertising on Google. But I suspect part of the explanation is in the
accounting of outsourcing activities.
-raghu.
