Fifty Years of Economic Measurement: The Jubilee of the Conference on Research in Income and Wealth.

Craig, Lee A.

In 1935 the National Bureau of Economic Research, at the instigation of Simon Kuznets, attempted to establish a closer relationship with the economics departments of several leading universities. This endeavor lead to the formation of a Universities-NBER committee, and the following year the first Conference on Research in Income and Wealth (CRIW) emerged from these efforts. Fifty Years of Economic Measurement contains the papers and discussion presented at a jubilee commemorating the fiftieth anniversary of that first conference. Held in Washington in 1988 (and thus a couple of years late), the jubilee reviewed the research emanating from CRIW over the years and offered guidance concerning the direction of future research.

The volume begins with two chapters on the history of CRIW. The first chapter, by Carol Carson, outlines the early years of the conference which focused on the development of common terminology and concepts and the study of the distribution of income. The second chapter contains comments from five participants whose work appeared in the first volume of Studies in Income and Wealth, the series published by the conference. Among these, Milton Friedman, Robert R. Nathan, and Carl Shoup each note the vital role Simon Kuznets played in the advent and development of CRIW. Indeed, no one who reads the papers in this volume, or who reviews the other volumes that comprise Studies in Income and Wealth, can help but to recognize Kuznets's influence on the economics profession through the conference.

The main body of the volume contains nine chapters covering a variety of topics. While the coverage is quite broad, the organizers designed the mix of papers to depict the breadth of issues facing economic science and to portray milestones of past CRIW achievement. The issues addressed and the authors include: the measurement of productivity and its implications for analyzing economic growth by Dale Jorgenson, the theoretical and practical problems involved in the measurement of capital by Charles R. Hulten, issues in measuring and interpreting savings and wealth by Michael J. Boskin, two papers on hedonic price indexes, one by Zvi Griliches and one by Jack E. Triplett, a survey of the measurement of construction prices by Paul E. Pieper, data difficulties in labor economics by Daniel S. Hamermesh, a survey of issues relating to environmental policy by Clifford S. Russell and V. Kerry Smith, and a history of measuring tax burden by B.K. Atrostic and James R. Nunns.

In general these papers (in some cases supplemented by the discussion) do an excellent job of reviewing the historical development of the topics they address, and most will no doubt find their way onto many reading lists for this reason alone. The results with respect to outlining current issues and presenting topics for future research are mixed, though several chapters stand out here as well. In particular, the chapters on productivity and economic growth, labor economics, and environmental policy are noteworthy either for presenting an agenda for future research (labor economics), or for containing pioneering research in and of themselves (productivity and economic growth), or for both (environmental policy).

The concluding chapter contains comments and recommendations for the future from a panel of "policy users" composed of Charles L. Schultze, Rudolph G. Penner, and Ian A. Stewart. Schultze recommends the creation of a chief statistical office or CSO to oversee the centralized collection and processing of data. Penner presents a view that, among this group, must seem almost like heresy by suggesting that perhaps policy users need fewer (but better) series. Stewart argues that the role of economists in making policy should be broadened from one of strict adherence to economic issues to one which includes issues relating to institutional and social change. While cogent arguments for each of these suggestions can be made, one cannot help but to be skeptical about the creation in Washington of another bureaucracy, such as the CSO. In addition, the paroxysms many "mainstream" economists display when institutional and social questions encroach on their "science" makes one skeptical about change in this direction in the near future.

Some readers will be able to identify at least two issues relating to the overall theme of the volume which have been neglected. First, the volume omits a review of the efforts to extend the measurement of income and wealth back to the century before the conference was founded, though the discussion in several chapters recognizes the importance of such endeavors. This omission is puzzling because CRIW has been concerned with these issues since its inception. Trends in the American Economy in the Nineteenth Century, and Output, Employment, and Productivity in the United States After 1800, volumes 24 and 30 respectively of Studies in Income and Wealth, stand out as important contributions of the conference; yet both go unrecognized. Second, one wonders if "the forward-looking" goals of the conference would have been better served by some attention to the measurement of international transactions and the issues raised by measurement in the service sector. Recently, technological and political changes have shaken the economic foundations of the modern industrial state, which was at its zenith when CRIW was founded, and to some degree a shift of emphasis from domestic to international issues may be in order.

Of course it is easy to carp about what should or should not have been included in any volume of collected essays. In fact the breadth of topics covered in this volume makes it valuable reading to a wide range of economists. While only a true Renaissance scholar would find all of the papers interesting, it is difficult to imagine a field not touched by at least one of them. The historical surveys and in some cases the summaries of current research contained in the majority of these papers make them important contributions. In particular, the chapters on productivity and economic growth, the measurement of capital, hedonic prices, environmental policy, and measuring tax burden should become required reading in many graduate courses covering those topics.