On Mon, Sep 27, 2004 at 04:08:30PM -0500, Dan Minette wrote: > I won't argue with you, but its interesting that it doesn't reflect > itself in an accelerated growth in total capitol employed.
Perhaps the measurement of the capital they are employing is not doing a good job of representing the true productivity of the capital. Since you do not disagree that investment spending increased greatly in the 1990's http://research.stlouisfed.org/fred2/series/PNFIC96/112/Max I guess you are debating whether that investment actually resulted in a large increase productive capital stock. I think the answer to that is yes, to some extent. Certainly productivity has accelerated recently http://research.stlouisfed.org/fred2/series/PNFIC96/112/Max but some of this may simply be due to decrease in hours in the denominator of the productivity calculation http://research.stlouisfed.org/fred2/series/HOABS/2/Max But output has NOT decreased: http://research.stlouisfed.org/fred2/series/OUTBS/2/Max So, people are working harder/faster/better and/or the capital (computers, machines, etc.) employed is supporting more output with less human effort. While there was overinvestment during the 1990's (i.e., some investment was in unneeded areas or inefficient capital) I tend to think the cause is some of each, although moreso the capital. After all, investment surged, and a few years later, productivity accelerated. -- Erik Reuter http://www.erikreuter.net/ _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
