Kevin Hassett
speaker
2,210 appearances
195 recordings
16 series
first heard Oct 2024
last heard 10 Aug
Kevin Hassett’s voice in public audio — every appearance, attributed to the second.
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recordings per month · last 12 monthsRecordings per month over the last 12 months — 154 in all, peaking in May 2026 with 38.
Appearances
You'd want stronger growth of that and unemployment to go down, but the unemployment rate's a little higher than what's probably the equilibrium unemployment rate in a full employment economy, but not a whole lot.
Let me talk about this, because there's an interesting anecdote that I don't think is ever made public about this.
So because computers were improving so quickly, then it was decided by the Bureau of Economic Analysis, a lot of great professionals over there, that they needed to what we call hedonically adjust the computer price, which
meant that if you had a computer chip that was twice as fast as the one from last year, and it costs the same, then that's like a big reduction in the price of computing.
And so that in a typical year, right around when we were starting to have to make the judgment on this, the computer price was dropping at about like 16 to 20%.
at an annual rate and there was so much computer investment that real GDP was getting a real big kick from the fact that the deflator for computers was dropping so much.
So I was in charge of that part of the world for the staff.
I spoke a lot to Greenspan and he said to me once, how do they deflate communications equipment?
Because communications equipment is basically like computers now.
And went back and looked, and communications equipment, rather than dropping 15% or 20% a year, was going up like 2% or 3% a year.
And so then I called over, because they're actually very open about, like the technical people at BEA.
And I talked to them about, well, why is that?
And they say, well, that we use, when we're making our deflators, we use something called a match model approach.
And so if something, we sold it yesterday and we're selling it today, then that's like, we look at the price change for that and that's where we get our deflator.
And we don't change the bundle of things that we use the batch model approach for very often.
And it turns out that there were a lot of, there was at that point a lot of communications equipment produced in the US for developing countries that were kind of like really old fashioned analog things where you got like Josephine moving the wires and stuff to connect the phone calls.
And since we had this really old equipment that we were exporting,
to developing countries, they were using the price of that to deflate communications equipment.
It sounds like a very tactical matter, but then Chairman Greenspan said, well, Kevin, what if we deflate communications equipment with a computer deflator instead?
Like, how much more would GDP be going up?
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