Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The Economists’ Voice

Ed. by Belke, Ansgar / Schnabl, Gunther

1 Issue per year


CiteScore 2017: 0.15

SCImago Journal Rank (SJR) 2017: 0.104
Source Normalized Impact per Paper (SNIP) 2017: 0.105

Online
ISSN
1553-3832
See all formats and pricing
More options …
Ahead of print

Issues

On the Accuracy of Estimating the Inflation Rate: Marty Feldstein as Dr. Pangloss

John Komlos
  • Corresponding author
  • University of Munich, Munich, Germany
  • Visiting Professor, University of North Carolina at Chapel Hill, Chapel Hill, NC, USA
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2018-10-24 | DOI: https://doi.org/10.1515/ev-2018-0029

Abstract

Martin Feldstein argues “that ‘true’ real output is growing faster than the official estimates imply and that the corresponding ‘true’ GDP price index is rising more slowly than the official one – or is actually declining.” In contrast, we argue that there is no real reason for such optimism. There are many negative developments that Feldstein overlooks such as subjective evaluations of well-being, incarceration rates, suicide rates, and the opioid epidemic. Moreover, he neglects completely the skewed distributions of income and wealth which leaves many families with inadequate savings and scrapping to make ends meet even if the average incomes grow. Feldstein overlooks also the many bite-backs of innovation such as the way the internet enabled foreign governments to interfere in the political process. In short, Feldstein’s view is Panglossian. He sees only the positives in technological change but fails to acknowledge the many negatives including global warming. As Stiglitz et al., suggest, “one of the reasons that most people may perceive themselves as being worse off even though average GDP is increasing is because they are indeed worse off (2010).”

Keywords: economic growth; technological change; welfare; measurement of inflation

References

  • Akerlof, George, and Robert Shiller. 2015. Phishing for Phools: The Economics of Manipulation and Deception. Princeton: Princeton University Press.Google Scholar

  • “Alan Greenspan on Income Inequality,” YouTube video, 2007, posted by “johnklin,” September 28, 2007, at 2:36. Accessed July 5, 2017. https://www.youtube.com/watch?v=oqx88MyUSck.

  • Arrow, Kenneth. 1963. “Uncertainty and the Welfare Economics of Medical Care.” American Economic Review 53 (5): 141–149.Google Scholar

  • Board of Governors of the Federal Reserve System. 2014. “Report on the Economic Well-Being of U.S. Households in 2013.” July.Google Scholar

  • Board of Governors of the Federal Reserve System. 2018. “Report on the Economic Well-Being of U.S. Households in 2017.” May.Google Scholar

  • Case, Anne, and Angus Deaton. 2017. “Mortality and Morbidity in the 21st Century.” Brookings Papers on Economic Activity, Spring: 397–476.Google Scholar

  • CBO, Congressional Budget Office, 2018. “The Distribution of Household Income, 2014.”Google Scholar

  • Easterlin, Richard. 2010. Happiness, Growth, and the Life Cycle. Oxford: Oxford University Press.Google Scholar

  • Easterlin Richard. 2017. “Paradox Lost?” Review of Behavioral Economics 4 (4): 311–339.Google Scholar

  • Federal Reserve Bank of St. Louis, FRED Economic Data. n.d. “Real Median Household Income, in Ohio.”Google Scholar

  • Feldstein, Martin. 2017. “Underestimating the Real Growth of GDP, Personal Income, and Productivity.” Journal of Economic Perspectives 31 (2): 145–164.Google Scholar

  • Gallup. 2018. “U.S. Life Evaluation (Weekly).” Accessed July 1, 2018. http://www.gallup.com/poll/151157/life-evaluation-weekly.aspx.

  • Heidhues, Paul, Botond Kőszegi, and Takeshi Murooka. 2016. “Exploitative Innovation.” American Economic Journal: Microeconomics 8 (1): 1–25.Google Scholar

  • Hoffmann, Andreas, and Gunther Schnabl. 2016. “The Adverse Effects of Unconventional Monetary Policy.” Cato Journal 36 (3): 449–484.Google Scholar

  • Katz, Josh. 2017. “Drug Deaths in America Are Rising Faster Than Ever.” The New York Times.Google Scholar

  • Komlos, John. 2016. “Has Creative Destruction Become More Destructive?” B.E. Journal of Economic Analysis and Policy 16 (4). DOI: .CrossrefGoogle Scholar

  • Mokyr, Joel. 2014. “Riding the Technology Dragon.” Milken Institute Review, 2: 87–94.Google Scholar

  • Mokyr, Joel, Chris Vickers, and Nicolas L. Ziebarth. 2015. “The History of Technological Anxiety and the Future of Economic Growth: Is This Time Different.” Journal of Economic Perspectives 29 (3): 31–50.Google Scholar

  • “Paul Volcker: Think More Boldly.” The Wall Street Journal, December 14, 2009.Google Scholar

  • Stiglitz, Joseph. 2002. “Information and the Change in the Paradigm in Economics.” American Economic Review 92 (3): 460–501.Google Scholar

  • Stiglitz, Joseph, Amartya Sen, and Jean-Paul Fitoussi. 2010. Mismeasuring Our Lives. Why the GDP Doesn’t Add Up. New York: New Books.Google Scholar

  • Temin, Peter. 2017. The Vanishing Middle Class: Prejudice and Power in a Dual Economy. Cambridge: The MIT Press.Google Scholar

  • Wikipedia Contributors. n.d. “Slim-fit Pants,” Wikipedia, The Free Encyclopedia.Google Scholar

About the article

Published Online: 2018-10-24


Citation Information: The Economists’ Voice, 20180029, ISSN (Online) 1553-3832, DOI: https://doi.org/10.1515/ev-2018-0029.

Export Citation

©2018 Walter de Gruyter GmbH, Berlin/Boston.Get Permission

Comments (0)

Please log in or register to comment.
Log in