Growth is a figment of economists’ imaginations
“… Federal Reserve is once again trying to thread a very narrow needle: cool inflation without cracking growth …”
A quixotic quest. Chasing unicorns. The way its economists measure them growth and inflation are the same thing. Because of the time it takes for inflation to work its way into final consumer prices, it looks like growth at first. When it gets there it’s finally recognized for what it is. What’s more, because of the underreporting of inflation, real GDP, reckoned by backing out inflation from nominal GDP, is systematically overreported.
Taking this to its ultimate conclusion, by using human time as a measure of value, per capita growth is zero by definition. Rising living standards flow not from government programs and manipulations of credit, but from the advance of technology, lower real costs of goods and services, the rule of law, and basic liberty. Conventional economics’ “things” based system of value allows inflation to be further understated by virtue of counting real cost declines as subtractions from inflation, effectively conjuring “growth” from the difference.
“Growth” is as imaginary as the square root of -1.
For a deeper dive into this, see:
There’s a lot to unpack in this short post. Readers immersed for a lifetime in conventional economics will find my conclusion about growth incredible, at minimum taxing to one’s powers of abstraction, but it is a logical consequence of my axiom of human time. Much of the foundation is in the linked article.