Timothy B Lee challenges Tyler Cowen’s thesis. Lee argues that we are not in the middle of an economic stagnation but that we’ve gotten worse at measuring progress:
Every time the software industry displaces a special purpose device, our standard of living improves but measured GDP falls. If what you care about is government revenue, this point might not matter much-it’s hard to tax something if no one’s paying for it. But the real lesson here may not be that the American economy is stagnating, but rather that the government is bad at measuring improvements in our standard of living that come from the software industry.
One problem I see with this is that it should free up resources for other goods and services. Maybe I’m missing something, but that should show up in our conventional metrics.