The New Macroeconomics of Consumer Surplus

13 Pages Posted: 27 Sep 2017  

Ilya Talman

Roy Talman & Associates

Xiao Qiao

SummerHaven Investment Management

Steve Rubinow

DePaul University - College of Computing and Digital Media

Michael Lippitz

Clareo LLC

Peter Evangelakis

Regional Economic Models, Inc. (REMI)

Date Written: September 14, 2017

Abstract

The standard way to measure economic growth in an economy is through increases in Gross Domestic Product (GDP). However, because prices for digital products and services have been rapidly falling for years, the rapid growth of the digital economy is not well-captured by GDP. In this paper, we review recent efforts to measure the digital economy through Consumer Surplus (CS) and present a framework for measuring the growth of CS as a percentage of economy, along with three examples. We argue that a better way to account for progress in economy would be to combine GDP with CS.

Keywords: GDP, Digitalization, Consumer Surplus

JEL Classification: E01, E31

Suggested Citation

Talman, Ilya and Qiao, Xiao and Rubinow, Steve and Lippitz, Michael and Evangelakis, Peter, The New Macroeconomics of Consumer Surplus (September 14, 2017). Available at SSRN: https://ssrn.com/abstract=3042915 or http://dx.doi.org/10.2139/ssrn.3042915

Ilya Talman

Roy Talman & Associates ( email )

150 S. Wacker Dr
Suite 1300
Chicago, IL 60606
United States

Xiao Qiao (Contact Author)

SummerHaven Investment Management ( email )

Soundview Plaza,
1266 East Main Street
Stamford, CT 06902
United States

HOME PAGE: http://sites.google.com/site/xiaoqiao10/

Steve Rubinow

DePaul University - College of Computing and Digital Media ( email )

243 South Wabash Avenue
Chicago, IL 60604
United States
3123627560 (Phone)
3123627560 (Fax)

HOME PAGE: http://https://www.cdm.depaul.edu

Michael Lippitz

Clareo LLC ( email )

20 N Wacker Dr., Ste 2230
Chicago, IL 60606
United States

Peter Evangelakis

Regional Economic Models, Inc. (REMI) ( email )

1717 K Street, Suite 900
D.C., WA 20006
United States

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