US vs. UK GDP

I don't think they are like for like.

An article in a newspaper I read recently asserted that the US GDP growth rate was rather dodgy. They count technological advances as growth. So if a computer in 100 mhz computer cost 1000 USD in 2003 and a 110 mhz computer cost

I have no idea if the article was correct, but that was the gist of it. I'd welcome corroboration/debunking!

Thom

I agree with you that such method of calculation is debatable. I think the key question is how do you define 'growth' here?

I could only assume that this 'growth' refers to growth in efficiency since it would cost less to calculate same amount of data(increase in computing power). IMHO, this is flawed. This efficiency gain would only be realised *IF* economic agents adopt the use of this new technology. i.e. if companies upgrade their computers. Hence less time spent on the same amount of work, therefore more work can be done and real GDP growth rate is *realised*. Otherwise I would only refer this as potential GDP growth rate.

I maybe completely....but just a thought.

Also as I point out periodically, people focus on relative changes but the absolute difference is even bigger. US GDP is something like $10 trillion, so if it grows by 5% that's an increase of $500 billion, which is about a third of the *total* GDP of the UK! Or at an individual level US GDP per head is nearly $40k, so a 5% increase is an extra $2000 per person per year, which is pretty substantial.

I don't think the housing market has all that much to do with it, at least in any direct way. I think it's more to do with a lack of innovation and relatively poor education.