Monday, March 3, 2008

productivity in services

How is productivity in services (or improvements in productivity) calculated? More widgets, because of changes in quality, is already hard enough. More haircuts, difficult. But more legal work? Advertising? Software? I suspect that increases in productivity are often just increases in price (inflation). This is especially problematic when changes in GNP are attributed to increases in productivity - perhaps it's just inflation and an increase in nominal GNP? I'd look at this (from Brookings) to start - mostly because it was the first thing that popped up in Google.

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