Using unemployment to measure economic performance is fundamentally flawed. Economic performance should be measured by per capita GDP divided by the labor force participation rate, which directly measures productivity. However, an alternative measure can be deployed to assess economic efficiency directly, without using money—akin to unemployment rates. Consider the exchange rate of all goods and services available for sale, similar to the exchange rate matrix used in the FX market to trade currencies. This matrix represents the exchange rates of all goods and services traded, which we refer to as E. In this paper, we explain that efficiency can be measured as the difference between E and the transpose of its Hadamard inverse. In this sense, money becomes the most accurate unit of account, aligning with the views of Arrow-Debreu and Marx, all three of whom view money as a unit of measure.
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