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I have read a lot of history about chemical process industries, energy, and allied sectors. I'm trying to compare inputs and outputs of processes without invoki
by philipkglass 10y ago
I have read a lot of history about chemical process industries, energy, and allied sectors. I'm trying to compare inputs and outputs of processes without invoking dollars: number of laborers, tons of sulfuric acid, megawatt hours of electricity...
My impression is that many commoditized products continue to see decent year-over-year improvements in the ratio of inputs to outputs. But if economists don't care about material input:output ratios, only currency-values, then improvements-plus-fierce-competition could look like stagnant productivity. You would need process improvements plus GDP growth to recognize productivity gains; flat GDP per capita and simultaneous shrinking inputs of matter and energy wouldn't count.
- tedsanders 10y agoBut productivity is defined as GDP/unit of labor. If it takes less labor to make a unit of GDP (because less inputs were needed), then the productivity statistics should show that. They shouldn't miss it. Even if those efficiency gains cause the prices of output to fall, inflation adjustment should, in theory, address that. So I don't think that greater efficiency can explain the productivity puzzle, at least not by itself.