Tyler Cowen’s NY Times piece sketches a pessimistic vision of U.S economic stagnation as measured by trends in median household income. As an eternal optimist, I offer my response here. Consider Los Angeles or New York City today, how many people would prefer to live in 1970 versus 2011? Crime is down over time. Pollution is down over time. The rise of the Green City has sharply improved our quality of life. Such non-market local public goods improvements are not seen in national income accounts. Economists have struggled with what is the right way to construct the CPI “consumer 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