Estimates of productivity growth over long periods of time are entangled with hedonics in a complex way that makes it difficult to make very strong statements. It’s very possible that manufacturing productivity is being understated due to increases in the quality or variety of goods that is not reflected in inflation figures. Accelerating innovation makes hedonics adjustments more difficult, and the manufacturing sector is very susceptible to these changes.
Estimates of productivity growth over long periods of time are entangled with hedonics in a complex way that makes it difficult to make very strong statements. It’s very possible that manufacturing productivity is being understated due to increases in the quality or variety of goods that is not reflected in inflation figures. Accelerating innovation makes hedonics adjustments more difficult, and the manufacturing sector is very susceptible to these changes.