If it now takes researchers much more time to come up with ideas, how much of that is caused by their consumption of distractions?

Sir, Diane Coyle writes that current productivity data does not consider what’s achieved through outsourcing since GDP excludes all the intermediate links in the chain and the additional value is netted out. If included “economic output would look somewhat better than the current statistics suggest. “Conventional measures pose the wrong productivity question” August 16.

But when Coyle refers to “a recent paper a group of economists from Stanford University and the Massachusetts Institute of Technology…calculate that it now takes more than 20 times the number of researchers to generate the same economic growth as it did in the 1930s.” I would have to ask: Does that calculation take due consideration of the ever-growing time researchers spend, not working, but consuming distraction on the cell phones or laptops?

Some months ago, in Bank of England’s “bankunderground” blog, we read a post by Dan Nixon titled “Is the economy suffering from the crisis of attention?” It said, “With the rise of smartphones in particular, the amount of stimuli competing for our attention throughout the day has exploded... we are more distracted than ever as a result of the battle for our attention. One study, for example, finds that we are distracted nearly 50% of the time.”

If those distractioninterruptions were recorded for what they really are, we would probably see a dramatic increase in productivity, in real salaries, in voluntary unemployment and in GDP.

In other words our current economic compasses might not be working properly, risking taking us in the wrong direction.

@PerKurowski

Why are not shares, properties in London, or famous paintings, not included as part of nominal demand?

Sir you hold that “deflation is bad if accompanied by falling nominal demand, and benign otherwise”, “Central bankers steered towards the wrong target” January 14. That sounds about right… (Unless you are an oil supplier of course)

What I cannot understand though is why increasing demand for art, shares and property has nothing to do with increasing nominal demand. In terms of overall purchasing capacity, there is little doubt that the inflation has been much much higher than that reported looking exclusively at a subjectively selected basket of goods.

It is not that I can buy much or any of that luxury, I am no plutocrat… but that does not mean that the distance to my dreams has not increased... dramatically.

“Little people”, do not listen to Chris Giles, if they finance you at a too high rate, try to keep your consumption low

Sir, Chris Giles writes “It is also deeply patronizing for those with reasonable comfortable incomes to fret that the little people are consuming too much for their good and for that of the wider economy”, “In economics consumption is for life not just for Christmas” December 19.

That might be easy for him to say, he who probably either pays off in cash his credit cards or has the benefit of a reasonable financing rate. If Mr. Giles simply looked at what the “little people” paid in finance costs for their financed consumption, he might think differently.

One of the problems is that much of what the “little people” could spend in consumption, for their good and for that of the wider economy”, goes to pay bonuses to bankers… would Chris Giles by any chance be a banker or a shareholder of a credit company?