hours on the job. If we assume that’s five days a week, it means that one hour of slacking per day means that true work hours are really only 85.5 percent of the official number.” a. If Smith’s...

hours on the job. If we assume that’s five days a week,

it means that one hour of slacking per day means that

true work hours are really only 85.5 percent of the official

number.”

a. If Smith’s estimates are correct, is the rate of growth of

labor productivity as measured by government statistics overstated or understated? Briefly explain.

b. What are the implications of your answer in part (a)

for using increases in real GDP per capita, as calculated by the BEA, to measure increases in well-being?

Source: Noah Smith, “Goofing off at Work Masks Rising Productivity,” bloomberg.com, May 10, 2017.