That is the topic of my latest Bloomberg column. Note that for most economic gains, total gdp and per capita gdp give roughly the same answers. But when it comes to lifesaving, that may no longer be the case. Here is one excerpt:
Take the vaccines against Covid. Of course the most important fact about them is that they reduce the amount of death and suffering. But what is their economic impact? The vaccines have been most helpful to the most vulnerable, namely the elderly or those with preexisting medical conditions. These are not the most productive cohorts of the economy. So the effectiveness of the vaccines might have actually lowered various social averages, such as per-capita GDP or per-capita productivity.
The extra life is a pure benefit. But to capture that benefit in numbers requires looking at the totals, not just the averages. Labor productivity per hour, for example, won’t necessarily increase. But total labor supply and total population will.
And what about those subpar returns on biomedical investments? That is a sign that most of the gains from innovation are being reaped by patients, users and consumers — not capitalists. Is that not exactly what everyone has been asking for?
There is much more at the link. The bottom line is that many of the gains will come through “n,” not per hour productivity.
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