This paper examines the appropriate treatment in the cost-of-living index of the appearance of new varieties of old goods. Existing theory here applies to individual households. Thus, we first show in what sense Laspeyres and Paasche indices for groups of households can be considered approximations to theoretically desirable group indices and then go on to the case of new goods. We apply our results to the case of the introduction of generics in pharmaceuticals and show that proper treatment can make a considerable difference.

D. W. Jorgenson, Z. Griliches; The Explanation of Productivity Change1, The Review of Economic Studies, Volume 34, Issue 3, 1 July 1967, Pages 249–283, htt

This paper investigates the shift in demand away from unskilled and toward skilled labor in U. S. manufacturing over the 1980s. Production labor-saving technological change is the chief explanation for this shift. That conclusion is based on three facts: (1) the shift is due mostly to increased use of skilled workers within the 450 industries in U. S. manufacturing rather than to a reallocation of employment between industries, as would be implied by a shift in product demand due to trade or to a defense buildup; (2) trade- and defense-demand are associated with only small employment reallocation effects; (3) increased use of nonproduction workers is strongly correlated with investment in computers and in R&D.

The aggregate quarterly consumption functions suggested by DuesenberryEckstein-Fromm (DEF) and by Zellner are recomputed and extended through 1960 on the basis of more recent data. While the actual fit of the DEF consumption function is substantially lower than previously reported, the coefficient estimates remain reasonably stable throughout the period. The Zellner consumption function fits well but gives rather low estimates of the long run marginal propensity to consume and a rather high and hard to interpret coefficient for the liquid assets variable. It is found also that the Durbin-Watson statistic presents a misleading picture of the amount of actual serial correlation in the residuals of these functions and an alternative nonparametric test is suggested.