The problem with productivity.
The problem of productivity is the problem of value accounting.
Output is measured by total market value of output, adjusted by a GDP deflator.
However, the market is an arbitrary determiner of value. Eg, an Apple Ipod with less features and lower audio quality than a Sony Mp3 player.
The premise of market efficiency may not hold, such that a unit of spending on an equivalent product might produce different welfare benefits due to a) different product quality due to imperfect markets eg. watermelon juice in Vietnam vs watermelon juice in Singapore b) differing choice sets.
Producer value cannot be measured simply in monetary terms either. Eg, the ATM, which does not show up in GDP.
Social value in exchange cannot be commoditized either.
The presence of externalities, etc.
No comments:
Post a Comment