Are our productivity, real salary, unemployment, and GDP figures up to date?

John Authers writes, “If ever there was a good place to take a deep breath and gain context on our unnecessarily complex world, it would be Jackson Hole, Wyoming” “Powell avoids foreign complications in the winds of Wyoming” August 25.

In a recent post in Bank of England’s blog “bankunderground” I read: “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.”

So, one interesting way for central bankers to get an understanding of our ever more complex world would be to ask them: If you deliver the same at work as a decade ago, but now you spend 50% of your working hours consuming distractions, on your cell or similar, how much has your productivity, your real salary, your voluntary unemployment increased? And what about GDP?

PS. Sir, as you well know, before initiating the Jackson Hole proceedings, I would love for all central bankers there to assist a seminar on the meaning “conditional probabilities.” Had they known about it before imposing their risk weighted capital requirements for banks it would have saved the world from a lot of problems.

@PerKurowski

If output displacement hides productivity, so does input displacement.

Sir, Dr Peter Johnson, responding to Diane Coyle’s “Conventional measures pose the wrong productivity question” August 16, argues that “Shift in output definition [is] at the heart of the productivity puzzle” and concludes “We are not counting apples for apples”,August 20.

As one example of “output displacement” output Johnson writes that “A great deal of retail banking activity has been displaced to private individuals [as a result of internet technology] and is not included in the calculations of output or productivity.”

There is also the other side of that same mirror namely that which you could call input displacement. 

In a letter to you referring to that same article by Diane Coyle I mentioned a post by Dan Dixon, in Bank of England’s “bankunderground” blog, 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.”

Sir, if those interruptions were recorded for what they really are, reduced working hours and increased consumption of distractions, 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

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

If we want real productivity data, we need consider real working conditions

Sir, I refer to my former colleague at the World Bank Kurt Bayer’s letter of August 16, “Real productivity is an efficiency measure”. I fully agree with what he argues, though, unfortunately, lately, life has become more complicated, even for statisticians. 

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.”

And so these interruptions should have to be recorded for what they are, meaning a consumption of distractions during working hours. If so, we would perhaps 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