Reading Notes: Week 4: Measuring Long-Run Economic Growth
Should it be a crime to use traditional measures of long-run national product growth? William Nordhaus appears to think so--believes that long-run economic growth has vastly outstripped all of our measures of increasing wealth.
In some ways, Nordhaus's paper is simply an exposition of the index number problem.
In other ways, Nordhaus's paper points to how we might construct better measures of real national product growth.
And there are ways in which Nordhaus's paper is weak. What is "income"? How is it related to "happiness"?
Here is a "literary" perspective on the extraordinary economic growth of the past century. Edward Bellamy was not a stupid man. Yet his utopia seems--to us--to be a stupid utopia. The economic growth of the past century has, in many cases, vastly outstripped what Bellamy expected utopia to contain. Yet sociological and political growth--if there has been sociological and political growth--is vastly behind what Bellamy thought could be accomplished.
Simon Kuznets provides a thoughtful account and defense of his historical national income accounts measurement project.