Let's Party Like It's 1973!

Published: September 10, 2019

Measuring economic progress requires an accurate measure of inflation. But measuring inflation is harder than you might think because rapid changes in quality often aren’t taken into account. When goods and services improve rapidly over time, it is more likely that inflation will be overestimated and changes in the standard of living will be underestimated.

• Watch Episode 1 in this series, How Is The Middle Class Doing?
• Watch Episode 2 in this series, The Paradox of Household Income.
• Watch Episode 3 in this series, Do The Rich Get All The Gains?

Discussion Questions

1. Would you take the deal and go back to 1973 if it meant you could pay 1973 prices while only enjoying 1973 goods and services?
2. Why might the poorest Americans prefer living in 1973. Do you think many would? Why or why not?
3. What are some examples of improvements to quality of life that haven’t been measured well by prices alone?
4. Are there any goods or services where you think quality has gone down, the opposite effect discussed in the video? Do you think this problem is common or rare?
5. Do you think people in the past were more or less happy than people today? Would most people in 1973 be excited or sad to live in today’s world with today’s goods and services?

Additional Resources

• Read “Do the Rich Get All the Gains from Economic Growth?” by Russ Roberts. Available here.
• Russ Roberts hosts EconTalk with guest Richard Burkhauser of Cornell University and talks about the state of the middle class, available here. 
• Read “What Do Economists Actually Know?” by Russ Roberts, available here.