Comment by klooney
I heard an econtalk pod a long time ago claiming that the long pole wasn't even dollar value, it was hedonic adjustments for Intel microchips that kept the graph of US manufacturing output looking like a tailspin since 2000.
I heard an econtalk pod a long time ago claiming that the long pole wasn't even dollar value, it was hedonic adjustments for Intel microchips that kept the graph of US manufacturing output looking like a tailspin since 2000.
Not sure what podcast you're talking about, but since we're trading vague recollections, my recollection was opposite. Manufacturing as % of GDP certainly went down, but gross value added did not.
Also, hedonic adjustments are typically applied to CPI figures, not figures like GDP or value added, so I suspect you have some facts crossed.
Note I think this evidence and discussion is all ambiguous, but hedonic adjustments absolutely affect real GDP.
When comparing to a past year's GDP, you need to make an adjustment for the differing value of money, and you can't calculate the differing value of money without considering the changes in the qualities of what you can buy with it.
Yes. Here's an example: https://research.upjohn.org/cgi/viewcontent.cgi?referer=&htt...
Excerpt:
> "The computer industry, in turn, is an outlier and statistical anomaly. Its extraordinary output and productivity growth reflect the way statistical agencies account for improvements in selected products produced in this industry, particularly computers and semiconductors. Rapid productivity growth in this industry—and by extension the above-average productivity growth in the manufacturing sector—has little to do with automation of the production process. Nor is extraordinary real output and productivity growth an indicator of the competitiveness of domestic manufacturing in the computer industry; rather, the locus of production of the industry’s core products has shifted to Asia"
The whole document is well worth a read.
Here's another article: https://qz.com/1269172/the-epic-mistake-about-manufacturing-...