Thanks for the kind words, Kevin. Yes, I think the biggest difference is that the chart I showed was "real" investment compared to "real" GDP. And, as you say, investment also included intellectual property spend and info spend. Because New Era spend is deflationary, it tends to have an outsized impact in real terms. The data came from the BEA site, and they don't publish the real spending data beyond the last few years so one has to use the "quantity indexes" to construct it back to 1947. I hope this helps and again thanks for reading and reaching out.
Love the chart-centric format Jim. Just a question re Chart 11. If I chart fixed investment spending on equipment and structures as % GDP (i.e. old economy capex) I get a very different picture. It's currently 8.2% and actually peaked late 70's and early 80's at over 13%. I think the difference may be spending on intangible assets. I would make the case that actually there are significant bottlenecks in the "old economy" that could well be inflationary as the economy hits constraints. A great example is the electricity grid.
Thanks for the kind words, Kevin. Yes, I think the biggest difference is that the chart I showed was "real" investment compared to "real" GDP. And, as you say, investment also included intellectual property spend and info spend. Because New Era spend is deflationary, it tends to have an outsized impact in real terms. The data came from the BEA site, and they don't publish the real spending data beyond the last few years so one has to use the "quantity indexes" to construct it back to 1947. I hope this helps and again thanks for reading and reaching out.
https://substack.com/profile/2298707-kevin-cousins/note/c-54208451
Link to the chart in notes
Love the chart-centric format Jim. Just a question re Chart 11. If I chart fixed investment spending on equipment and structures as % GDP (i.e. old economy capex) I get a very different picture. It's currently 8.2% and actually peaked late 70's and early 80's at over 13%. I think the difference may be spending on intangible assets. I would make the case that actually there are significant bottlenecks in the "old economy" that could well be inflationary as the economy hits constraints. A great example is the electricity grid.