Steve Gutmann used to have a basement that he never used. His Honda Civic sat idle in front of his Portland, Ore. house.
Now
strangers use Getaround.com to book Gutmann’s $6-an-hour car for
errands and travelers stay in his newly refurbished basement apartment,
listed at $115 a night on AirBnb.
Gutmann and a business partner are developing a new app that lets people get more use out of their possessions.
The apps mean "pretty significant productivity gains for a full range of things, from empty rooms to idle cars and bikes and all the other things that are marooned in people's garages," Gutmann says.
That "sharing economy" has lured billions of dollars from investors, yet so far, it barely seems to register in U.S. economic data.
Productivity - an area of the economy particularly sensitive to technological advances - has grown at just 1.25 percent a year since the 2008-2009 crisis, half its pre-crisis average.
The
decline has some economists arguing that official figures are simply
failing to capture the effects of the sharing economy and other
innovation, and that true productivity growth is much higher. If
that is the case, then the Federal Reserve should feel more comfortable
raising its interest rates for the first time in almost a decade.
So if the sharing economy makes things easier to find and cheaper to obtain - for example by using AirBnb's user-generated ratings system - it may also cause official data to overstate inflation, leaving the Fed further away from its 2 percent inflation goal.
Consequently, the effects of any possible productivity understatement could effectively cancel each other out from the point of Fed policy.
"If you think we think we are mismeasuring productivity as too low, you are also arguing that inflation is lower than we are measuring. This is a pretty important issue," San Francisco Fed President John Williams said earlier this month.
However, for Williams and several other Fed policymakers, the decline in productivity growth from the pace of the late 90s to mid-2000s is real.
That view implies slower potential economic growth and suggests that subdued wage growth may be part of a "new normal" rather than a hurdle to raising short-term interest rates.
Gutmann and a business partner are developing a new app that lets people get more use out of their possessions.
The apps mean "pretty significant productivity gains for a full range of things, from empty rooms to idle cars and bikes and all the other things that are marooned in people's garages," Gutmann says.
That "sharing economy" has lured billions of dollars from investors, yet so far, it barely seems to register in U.S. economic data.
Productivity - an area of the economy particularly sensitive to technological advances - has grown at just 1.25 percent a year since the 2008-2009 crisis, half its pre-crisis average.
So if the sharing economy makes things easier to find and cheaper to obtain - for example by using AirBnb's user-generated ratings system - it may also cause official data to overstate inflation, leaving the Fed further away from its 2 percent inflation goal.
Consequently, the effects of any possible productivity understatement could effectively cancel each other out from the point of Fed policy.
"If you think we think we are mismeasuring productivity as too low, you are also arguing that inflation is lower than we are measuring. This is a pretty important issue," San Francisco Fed President John Williams said earlier this month.
However, for Williams and several other Fed policymakers, the decline in productivity growth from the pace of the late 90s to mid-2000s is real.
That view implies slower potential economic growth and suggests that subdued wage growth may be part of a "new normal" rather than a hurdle to raising short-term interest rates.
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