The disappearing or non-disappearing middle class

http://andrewgelman.com/2013/03/17/the-disappearing-or-non-disappearing-middle-class/

by xijuan • 13 years ago

28 3 13 years ago

"Beyond all this, there’s the challenge of reconciling these income data with other things we’ve been hearing about economic trends. For example, I recently read somewhere that Americans are three times richer than they were a few decades ago […] a quick web search indeed shows something like a doubling of inflation-adjusted GDP since 1970."

I’m no statistician, but I do know that GDP is at best only loosely correlated with “wealth,” and it sure as heck doesn’t say anything about where that wealth — or even the activity that it actually is a measure of — is increasing.

gluczywo• 13 years ago

Positive correlation between GDP and wealth exists but it's hard to find causality. GDP is a misleading terms in economics. Two major components that Gross Domestic Product measures are private consumption and government spending - things by definition unproductive.

chad_walters• 13 years ago

The amazing thing is that the "big bulge" that Evans referred to in the original graph is clearly the bulge on the left (low-income) side of the graph, while McArdle incorrectly focuses on the artifact on the right (high-income) side -- and then none of the follow-on posts seem to point this mistake out.

The disappearing or non-disappearing middle class

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