factual

GDP Was Designed for Constant-Quality Economies

GDP and total factor productivity measures are reasonable for short-run year-to-year comparisons but become deeply misleading over long periods because they were designed for 'wheat and steel' economies producing roughly constant-quality baskets of goods, and they cannot handle the appearance of entirely new goods or the quantum-leap quality improvements in existing goods (e.g., a modern laptop versus a 1980s 386).

factualpending

Speaker

Joel Mokyr

Evidence Quote

our national income accounting system completely fails us

Source

Joel Mokyr on Growth, Innovation, and StagnationEconTalk
Created: 6/13/2026, 12:12:21 AM

My Notes

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