Fighting With Numbers
By Arnold Kling
Here is coverage from Arnold Kling, though I think he (like some MR commentators) is spending too much time on impressions and not considering (at all) the numbers presented in chapter one.
The numbers do not tell an unambiguous story. The productivity number says that we have done well, and the median household income number says we have not done well. If Cowen thinks he has demonstrated that the productivity number is dodgy but the household income number is not, then I have to say that I disagree.
There are plenty of other numbers to throw into the mix. People are retiring earlier and living longer. That is a good thing, but my guess is that it depresses median household income.
I don’t think that we are going to be able to determine the validity of the stagnation hypothesis any time soon. Same with the Recalculation Story. I give the Recalculation Story a somewhat better chance of panning out, though. Most past predictions of long-term stagnation have not fared well. We may not be as wealthy as it appeared we would be in 1999, but my guess is that we are nowhere near as poor as we appeared to be in 2009.