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Quotation of the day on how flawed measures of inflation understate wealth and improvements in consumer well-being – Publications – AEI

Summary:
AEI Quotation of the day on how flawed measures of inflation understate wealth and improvements in consumer well-being …. is from Phil Gramm and John F. Early’s op-ed in the Wall Street Journal “Americans Are Richer Than We Think“: When corrected for documented price overstatements, real average hourly earnings from 1975 to 2017 are shown to have risen some 52%, not 6%—an additional .77 an hour. Real median household income increased 68%, not 21%—,060 more annually. Gross domestic product grew 253% rather than 216%—,312 of additional output per capita. Productivity expanded 142% rather than 117%— of additional value for every hour worked. And published poverty incidence fell by almost half. Combined with the 67% drop in poverty that comes from accounting for all government

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AEI
Quotation of the day on how flawed measures of inflation understate wealth and improvements in consumer well-being

…. is from Phil Gramm and John F. Early’s op-ed in the Wall Street JournalAmericans Are Richer Than We Think“:

When corrected for documented price overstatements, real average hourly earnings from 1975 to 2017 are shown to have risen some 52%, not 6%—an additional $6.77 an hour. Real median household income increased 68%, not 21%—$17,060 more annually. Gross domestic product grew 253% rather than 216%—$6,312 of additional output per capita. Productivity expanded 142% rather than 117%—$10 of additional value for every hour worked. And published poverty incidence fell by almost half. Combined with the 67% drop in poverty that comes from accounting for all government transfers, poverty incidence sank from 12.3% to about 2%.

Quotation of the day on how flawed measures of inflation understate wealth and improvements in consumer well-being
Mark Perry

Mark Perry
Mark J. Perry is concurrently a scholar at AEI and a professor of economics and finance at the University of Michigan’s Flint campus. He is best known as the creator and editor of the popular economics blog Carpe Diem. At AEI, Perry writes about economic and financial issues for American.com and the AEIdeas blog.

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