Spencer claims:
Spencer: Which Political Party's Policies Boost Investment in America, Again? https://www.bradford-delong.com/2019/12/which-political-partys-policies-boost-investment-in-america-again.html?cid=6a00e551f0800388340240a4a509dd200c#comment-6a00e551f0800388340240a4a509dd200c: 'This is in nominal dollars. However, the sharp drop in the price of computing power changes the data significantly. Look at real business investment as a share of real GDP and it looks very different...
Spencer is wrong. "It" does not look very different. Yes, moving to real/real imparts a substantial upward trend to the investment share over time. But it does not change "it". It does not change the red-president/blue-president pattern:
There are, conceptually, three different metrics here: there is mobilized-savings effort, there is real-investment outcome, and there is the net change in the intensity-of-utilization-adjusted capital stock. All three are interesting, and worth looking at. The differences between them have no impact on my point.
#commentoftheday #2019-12-04
