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For all the work being done in macroeconomics, it seems that much of the conflict between the various prescriptions is caused by a lack of a realistic definition of economic growth. The current reliance on the change in real GDP is misleading because it is based on a deflator that does not take into account all drivers of monetary inflation, most notably asset values, and understates appreciation due to technological change. Additionally, it does not take into account the leverage imposed on the economy in the course of doing business. Accordingly, it becomes just as easy to advocate policies that buy current growth at the expense of future as it is to advocate current over-investment without regard for the inevitable reckoning. Until a good measure of inflation that reflects reality is introduced and a measure of growth can be developed that accounts for the changes in leverage and population, we will continue to suffer from short-termism in prescriptions and the resulting conflicts among the producing and investing interests.

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