Keywords: Growth, productivity, computers, information technology, investment
Abstract: The performance of the U.S. economy over the past several
years has been remarkable, including a rebound in labor
productivity growth after nearly a quarter century of sluggish
gains. To assess the role of information technology in the
recent rebound, this paper re-examines the growth
contribution of computers and related inputs with the same
neoclassical framework that we have used in earlier work. Our
results indicate that the contribution to productivity growth
from the use of information technology -- including computer
hardware, software, and communication equipment -- surged in
the second half of the 1990s. In addition, technological
advance in the production of computers appears to have
contributed importantly to the speed-up in productivity
growth. All in all, we estimate that the use of information
technology and the production of computers accounted for about
two-thirds of the 1 percentage point step-up in productivity
growth between the first and second halves of the decade.
Thus, to answer the question posed in the title of this paper,
information technology largely is the story.
Full paper (3960 KB PDF)
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Last update: May 17, 2000