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Reply #3: Raising Red Flags About Productivity [View All]

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ozymandius Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Nov-11-04 07:41 AM
Response to Reply #2
3. Raising Red Flags About Productivity
It has practically been an article of faith at the Federal Reserve (news - web sites): Fueled by the Information Revolution, strong productivity growth is here to stay. Fed policymakers once again called the underlying growth rate of productivity "robust" as they bumped up interest rates for the fourth time this year, on Nov. 10.

But behind the scenes, some Fed policymakers are questioning how much longer the efficiency miracle can go on. They see signs of a slowdown in the torrid pace of technological innovation in the computer and chip industries, advances that have propelled productivity in the last decade. And they wonder if those are harbingers of less vigorous gains ahead.


What's critical is whether this slowdown is symptomatic of a permanent downshift. Most experts aren't too concerned. They see it as only a temporary response to the ups and downs of the business cycle and point to a host of innovations in the tech industry. Indeed, they peg the underlying growth rate of productivity at 2% or better.

So what exactly is making some Fed worrywarts antsy? Their concerns have been triggered by changing pricing patterns in tech. Between 1992 and 2002, the quality-adjusted price of new computers as compiled by the government fell at an annual rate of 18%. Those sharp dips mainly reflected the pace of technological progress and faster productivity growth. The rapid improvements in technology spurred stepped-up computer buying by businesses, spreading the productivity miracle throughout the economy.
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  -STOCK MARKET WATCH, Thursday 11 November ozymandius  Nov-11-04 07:12 AM   #0 
  - WrapUp by Mike Hartman - GLOBAL CURRENCIES OUT OF BALANCE  ozymandius   Nov-11-04 07:35 AM   #1 
  - Parsing What the Fed Left Out  ozymandius   Nov-11-04 07:39 AM   #2 
  - Raising Red Flags About Productivity  ozymandius   Nov-11-04 07:41 AM   #3 
     - Hahahaha! The Productivity Miracle. Love this last part -  54anickel   Nov-11-04 08:42 AM   #10 
  - Economists Predict Another Rate Increase (new)  ozymandius   Nov-11-04 07:43 AM   #4 
  - Another 25 Basis Points, How Many Left?  54anickel   Nov-11-04 09:07 AM   #13 
     - Analysis: When Fed Says Jump, Investors Ask 'How High?'  UpInArms   Nov-11-04 09:36 AM   #15 
        - Hmm, so how much of it is a "bluff"? This week's articles alone make the  54anickel   Nov-11-04 10:44 AM   #23 
  - daily dollar watch  UpInArms   Nov-11-04 07:47 AM   #5 
  - G7 considers coordinated forex intervention: Italy  54anickel   Nov-11-04 07:59 AM   #7 
     - Euro pressured by ECB intervention talk  UpInArms   Nov-11-04 11:49 AM   #27 
  - Ozy, that toon! Brings tears to my eyes - and not from laughing. So  54anickel   Nov-11-04 07:54 AM   #6 
  - Initial claims were released yesterday morning.  ozymandius   Nov-11-04 08:35 AM   #9 
     - I think many of those "citizens" have been conned into the idea of  54anickel   Nov-11-04 08:57 AM   #12 
  - pre-opening blather  UpInArms   Nov-11-04 08:19 AM   #8 
  - opening numbers and blather  ozymandius   Nov-11-04 08:48 AM   #11 
  - Australian Jobless Rate Falls to Lowest in 26 Years  54anickel   Nov-11-04 09:33 AM   #14 
  - China Predicts 9.3 Percent Economic Growth  54anickel   Nov-11-04 09:36 AM   #16 
  - 54anickel, have you noticed  UpInArms   Nov-11-04 09:39 AM   #17 
  - Yeah, could it have something to do with the holiday? I read on their  54anickel   Nov-11-04 10:20 AM   #21 
  - Tiffany shares dive with 26% drop in profit  UpInArms   Nov-11-04 09:51 AM   #18 
  - 11:10am numbers and yadda  ozymandius   Nov-11-04 10:12 AM   #19 
  - In short, we are screwed (Mogambo)  54anickel   Nov-11-04 10:15 AM   #20 
  - Inflation Worriers, Dollar Pessimists (Kudlow, for a laugh)  54anickel   Nov-11-04 11:25 AM   #25 
     - OMG! this freak of nature must be on the propaganda payroll!  UpInArms   Nov-11-04 11:32 AM   #26 
  - Bush Policy: Talk a Strong Dollar But Let It Slide  54anickel   Nov-11-04 10:33 AM   #22 
  - 12:12 update  54anickel   Nov-11-04 11:15 AM   #24 
  - Bush bounce real (Bush winning)  NewYorkerfromMass   Nov-11-04 12:27 PM   #28 
  - What a bunch of puke-inducing propaganda.....  llmart   Nov-11-04 01:16 PM   #31 
  - 2:04 update - then I've gotta run for the day  54anickel   Nov-11-04 01:06 PM   #29 
  - Mortgage Rates Up on Economic Signs  UpInArms   Nov-11-04 01:07 PM   #30 
  - closing numbers  UpInArms   Nov-11-04 03:10 PM   #32 
     - Closing blather - Oh happy days are here again!  54anickel   Nov-11-04 05:49 PM   #33 
        - Whoops, forgot the buck, drifted down all day long. Currently at it's low  54anickel   Nov-11-04 05:52 PM   #34 

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