Tyler Cowen’s NY Times pieceÂ sketches a pessimistic vision of U.S economic stagnation as measured by trends in median household income. As an eternal optimist, I offer my responseÂ here.Â Â Consider Los Angeles or New York City today, how many people would prefer to live in 1970 versus 2011?Â Crime is down over time. Pollution is down over time.Â Â The rise of the Green CityÂ has sharply improved our quality of life. Such non-market local public goods improvements are not seen in national income accounts.Â Â Economists have struggled with what is the right way to construct the CPIÂ “consumer Â price index.” This is crucial for measuring inflation and thus trends in real income.
You are here: / Quality of Life Trends vs. Income Growth Trends Revisited