Perhaps The Economy Does Measure Up

Your article "Suddenly, the economy doesn't measure up" (Economics, July 31), though useful, presented some misleading information that should be clarified. First, sectoral analysis will not be "nearly impossible." The chained dollars and the Bureau of Economic Analysis' new data on contributions to growth that were mentioned in your article will make sectoral analysis easier and more accurate than the current measure of real gross domestic product, which is biased and overestimates growth in current periods yet underestimates growth in past periods.

Second, although the chained-dollar components will not precisely "add up" to the GDP, they will be off by less than one-hundredth of a percentage point in current periods. For longer periods of analysis, where additivity is a problem, analysts can use BEA's new data on contributions to growth.

Third, BEA does make adjustments for "quality change" for computers and has a program under way to expand these adjustments to telecommunications, computer software, and other products.

J. Steven Landefeld

Acting Director

Bureau of Economic Analysis

Commerce Dept.


Editor's note: Although there may be some disagreement over emphasis, the points Mr. Landefeld raises were made in the story.

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