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The Economics of New Goods

New goods are at the heart of economic progress. The eleven essays in this volume include historical treatments of new goods and their diffusion; practical exercises in measurement addressed to recent and ongoing innovations; and real-world methods of devising quantitative adjustments for quality change.

The lead article in Part I contains a striking analysis of the history of light over two millenia. Other essays in Part I develop new price indexes for automobiles back to 1906; trace the role of the air conditioner in the development of the American south; and treat the germ theory of disease as an economic innovation. In Part II essays measure the economic impact of more recent innovations, including anti-ulcer drugs, new breakfast cereals, and computers. Part III explores methods and defects in the treatment of quality change in the official price data of the United States, Canada, and Japan.

This pathbreaking volume will interest anyone who studies economic growth, productivity, and the American standard of living.

Table of Contents

Prefatory Note
Timothy F. Bresnahan, Robert J. Gordon.
1: Do Real-Output and Real-Wage Measures Capture Reality? The History of Lighting Suggests Not
William D. Nordhaus
Comment: Charles R. Hulten
2: Quality-Adjusted Prices for the American Automobile Industry: 1906-1940
Daniel M. G. Raff, Manuel Trajtenberg.
Comment: Jack E. Triplett
3: The Welfare Implications of Invention
Walter Y. Oi
4: Science, Health, and Household Technology: The Effect of the Pasteur Revolution on Consumer Demand
Joel Mokyr, Rebecca Stein.
Comment: John C. Brown
5: Valuation of New Goods under Perfect and Imperfect Competition
Jerry A. Hausman
Comment: Timothy F. Bresnahan
6: Bias in U.S. Import Prices and Demand
Robert C. Feenstra, Clinton R. Shiells.
Comment: Zvi Griliches
7: The Roles of Marketing, Product Quality, and Price Competition in the Growth and Composition of the U.S. Antiulcer Drug Industry
Ernst R. Berndt, Linda T. Bui, David H. Lucking-Reiley et. al.
Comment: Valerie Y. Suslow
8: From Superminis to Supercomputers: Estimating Surplus in the Computing Market
Shane M. Greenstein
Comment: Erik Brynjolfsson
9: New Products and the U.S. Consumer Price Index
Paul A. Armknecht, Walter F. Lane, Kenneth J. Stewart.
Comment: Frank C. Wykoff
10: The Construction of Basic Components of Cost-of-Living Indexes
Marshall B. Reinsdorf, Brent R. Moulton.
Comment: W. E. Diewert
11: New Goods from the Perspective of Price Index Making in Canada and Japan
Andrew Baldwin, Pierre Despres, Alice Nakamura et. al.
Comment: Robert Summers
Name Index
Subject Index

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