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II Research Papers Accounting for Growth in the Information Age
Pages 75-134

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From page 77...
... Economy" in the American Economic Review, 90:1, in March 2001. 1See Congressional Budget Office (2000)
From page 78...
... The rate of the IT price decline is a key component of the cost of capital, required for assessing the impacts of rapidly growing stocks of computers, communications equipment, and software. Constant quality price indexes are essential for identifying the change in price for a given level of performance.
From page 79...
... The dramatic effects of information technology on capital and labor markets have already generated a substantial and growing economic literature, but many important issues remain to be resolved. For capital markets the relationship between equity valuations and growth prospects merits much further study.
From page 80...
... Semiconductor price declines closely parallel Moore's Law on the growth of chip capacity, setting semiconductors apart from other products. Figure 1.1 also reveals a sharp acceleration in the decline of semiconductor prices in 1994 and 1995.
From page 81...
... 1.2.3. Constant Quality Price Indexes The behavior of semiconductor prices is a severe test for the methods used in the official price statistics.
From page 82...
... In 1985 the Bureau of Economic Analysis incorporated constant quality price indexes for computers and peripheral equipment constructed by IBM into the NIPA. Triplett's (1986)
From page 83...
... Communications equipment is an important market for semiconductors, but constant quality price indexes cover only a portion of this equipment. Switching and terminal equipment rely heavily on semiconductor technology, so that product development reflects improvements in semiconductors.
From page 84...
... Parker and Grimm (2000) present a constant quality price index for prepackaged software, given in Figure 1.3.
From page 85...
... This important gap in our official price statistics has been filled by constant quality price indexes for all types of communications equipment constructed by Doms (2004) , but these indexes have not been incorporated into the national accounts.
From page 86...
... Productivity growth in IT-producing industries has risen in importance and a productivity revival is under way in the rest of the economy. A substantial acceleration in the IT price decline occurred in 1995, triggered by a much sharper acceleration in the price decline of semiconductors, the key component of modern information technology.
From page 87...
... Constant quality price indexes, like those reviewed in the previous section, are a key component of the methodology for analyzing the American growth resurgence. Computer prices were incorporated into the NIPA in 1985 and are now part of the PPI as well.
From page 88...
... By contrast the relative price of software has been flat for much of the period and began to fall only in the 1980s. The price of communications equipment behaves similarly to the software price.
From page 89...
... economy. Table 2.3 gives capital stocks from 1948 to 2002, as well as price indexes for total domestic tangible assets and IT assets -- computers, software, and communications equipment.
From page 90...
... .29 The distinction between labor input and labor hours is analogous to the distinction between capital services and capital stock. The growth in labor quality is the difference between the growth in labor input and hours worked.
From page 91...
... 2.2. The American Growth Resurgence The American economy has undergone a remarkable resurgence since the mid-1990s with accelerating growth in output, labor productivity, and total factor productivity.
From page 92...
... Inputs include non-IT capital services Kn and the services of computers Kc, software Ks, and telecommunications equipment Kt , as well as labor input L.30 Productivity is denoted by A The most important advantage of the production possibility frontier is the explicit role that it provides for constant quality prices of IT products.
From page 93...
... The first is capital deepening, the growth in capital input per hour worked, and reflects the capitallabor substitution. The second is improvement in labor quality and captures the 31See, for example, Campbell and Shiller (1998)
From page 94...
... Although the price decline for communications equipment during the period 1995-2002 is greater than that of software, investment in this equipment is more in line with prices. However, prices of communications equipment also fail to hold quality constant.
From page 95...
... Table 2.2 shows that the price of computer investment fell by 30.99 percent per year, the price of software fell by 1.31 percent, and the price of communications equipment dropped by 4.16 percent during the period 1995-2002, while non-IT investment and consumption prices rose by 2.02 and 1.79 percent, respectively. In response to these price changes, firms, households, and governments have accumulated computers, software, and communications equipment much more rapidly than other forms of capital.
From page 96...
... The Domar aggregation formula can be approximated by expressing the declines in prices of computers, communications equipment, and software relative to the price of gross domestic income, an aggregate of the prices of capital and labor services. The rates of relative IT price decline are weighted by ratios of the outputs of IT products to the GDP.
From page 97...
... Between 1989-1995 and 1995-2002 the contribution of capital input jumped by 0.80 percentage points, the contribution of labor input declined by 0.10 percent, and productivity accelerated by 0.45 percent. Growth in ALP rose 1.03 percent as more rapid capital deepening and growth in productivity offset slower improvement in labor quality.
From page 98...
... Figure 2.9 shows the acceleration in ALP growth is due to capital deepening as well as faster total factor productivity growth. Capital deepening contributed 0.74 percentage points, counterbalancing a negative contribution of labor quality of 0.13 percent.
From page 99...
... 79. 41Solow's seminal role in this research, beginning with his brilliant and pathbreaking essay of 1956, "A Contribution to the Theory of Economic Growth," was recognized, simply and elegantly, by the Royal Swedish Academy of Sciences in awarding Solow the Nobel Prize in Economics in 1987 "for his contributions to the theory of economic growth." See Maler (1992)
From page 100...
... In this study he had constructed constant quality measures of labor input, taking into account differences in the quality of hours worked due to the age, sex, and educational attainment of workers. Kuznets (1971)
From page 101...
... , and Solow (1957) , which were limited to the United States.47 According to Kuznets, economic growth was largely attributable to the Solow residual between the growth of output and the growth of capital and labor inputs, although he did not use this terminology.
From page 102...
... This altered, irrevocably, the allocation of economic growth between substitution and technical change.51 Griliches and I introduced a constant quality index of capital input by distinguishing among types of capital inputs. To combine different types of capital into a constant quality index, we identified the prices of these inputs with rental prices, rather than the asset prices used in measuring capital stock.
From page 103...
... concept of embodied technical change, showing that economic growth could be interpreted, equivalently, as "embodied" in investment or "disembodied" in productivity growth. My 1967 paper with Griliches removed this indeterminacy by introducing constant quality price indexes for investment goods.53 Griliches and I showed that changes in the quality of capital and labor inputs and the quality of investment goods explained most of the Solow residual.
From page 104...
... framework was based on GNP rather than NNP and included a constant quality index of capital input, displacing two of the key conventions of the traditional framework of Kuznets and Solow.57 However, BLS retained hours worked as a measure of labor input until July 11, 1994, when it released a new multifactor productivity measure including a constant quality index of labor input as well. Meanwhile, BEA (1986)
From page 105...
... A possible explanation could be that highskilled workers are complementary to IT, while low-skilled workers are substitutable. An alternative explanation is that technical change associated with IT is skill-biased and increases the wages of high-skilled workers relative to low-skilled workers.62 Finally, information technology is altering product markets and business organizations, as attested by the large and growing business literature,63 but a fully satisfactory model of the semiconductor industry remains to be developed.64 Such 59See also: David (1990, 2000)
From page 106...
... I have shown in Section 3 that the most important explanation is the relative paucity of constant quality price indexes for semiconductors and information technology in national accounting systems outside the U.S. The stagflation of the 1970s greatly undermined the Keynesian Revolution, leading to a New Classical Counter-revolution led by Lucas (1981)
From page 107...
... 2001. Measuring Capital: A Manual on the Measurement of Capital Stocks, Consump tion of Fixed Capital, and Capital Services.
From page 108...
... 1986. "Quality-Adjusted Price Indexes for Computer Processors and Selected Peripheral Equipment" Survey of Current Business 66(1)
From page 109...
... 1998. "Price Indexes for Selected Semiconductors: 1974-96" Survey of Current Business 78(2)
From page 110...
... 2001. "The Stock Market and Capital Accumulation" American Economic Review 91(5)
From page 111...
... "U.S. Economic Growth at the Industry Level" American Economic Review 90(2)
From page 112...
... Productivity Revival: What Do the Industry Data Say? " American Economic Review 92(5)
From page 113...
... 1995. "The Impact of Computer Prices on International Comparisons of Pro ductivity" Economics of Innovation and New Technology 3(3-4)
From page 114...
... 114 PRODUCTIVITY AND CYCLICALITY IN SEMICONDUCTORS TABLE 2.1 Information Technology Output and Gross Domestic Product Computer Software Year Value Price Value Price 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 0.0 1,635.07 1960 0.2 1,635.07 0.1 1.25 1961 0.3 1,226.30 0.2 1.22 1962 0.3 817.53 0.2 1.18 1963 0.8 572.27 0.5 1.14 1964 1.0 490.52 0.6 1.11 1965 1.3 408.77 0.8 1.08 1966 1.9 283.63 1.1 0.99 1967 2.1 228.43 1.4 1.02 1968 2.1 194.16 1.5 1.01 1969 2.7 176.76 2.1 1.07 1970 3.0 158.80 2.8 1.14 1971 3.2 142.57 2.9 1.11 1972 4.1 128.28 3.4 1.10 1973 4.2 142.83 3.9 1.12 1974 4.8 128.86 4.8 1.18 1975 4.6 152.47 5.9 1.25 1976 5.6 125.12 6.4 1.25 1977 7.2 98.56 6.8 1.27 1978 9.7 60.47 8.0 1.27 1979 13.2 45.21 10.2 1.30 1980 17.3 34.17 12.2 1.35 1981 22.6 25.95 14.9 1.42 1982 25.3 25.83 17.7 1.45 1983 34.8 20.42 20.9 1.44 1984 43.4 18.70 25.9 1.43 1985 46.0 15.41 30.1 1.41 1986 45.7 13.64 32.7 1.36 1987 48.6 12.40 37.8 1.36 1988 54.0 12.15 44.7 1.35 1989 56.8 12.01 54.2 1.30 1990 52.3 10.86 62.3 1.26
From page 115...
... ACCOUNTING FOR GROWTH IN THE INFORMATION AGE 115 Communications Total IT Gross Domestic Product Value Price Value Price Value Price 1.7 0.90 1.7 4.26 321.0 0.19 1.5 0.90 1.5 4.28 322.0 0.19 1.7 0.92 1.7 4.37 343.4 0.19 2.0 0.96 2.0 4.55 382.1 0.19 2.5 0.93 2.5 4.39 395.1 0.19 2.8 0.89 2.8 4.22 436.6 0.20 2.5 0.90 2.5 4.26 428.1 0.20 2.7 0.89 2.7 4.24 471.8 0.20 3.4 0.91 3.4 4.30 493.7 0.21 4.0 0.95 4.0 4.49 537.2 0.22 3.5 0.95 3.5 4.52 512.6 0.21 4.3 0.95 4.4 4.52 556.9 0.21 4.8 0.93 5.1 4.42 573.1 0.22 5.3 0.91 5.9 4.28 587.6 0.22 5.8 0.91 6.4 4.18 631.3 0.22 5.9 0.90 7.1 3.99 675.9 0.23 6.5 0.88 8.0 3.86 737.6 0.23 7.6 0.87 9.8 3.71 806.8 0.24 9.1 0.85 12.1 3.43 881.7 0.25 10.0 0.86 13.4 3.35 928.7 0.25 10.7 0.87 14.3 3.31 981.9 0.26 12.1 0.89 16.9 3.33 1,052.5 0.27 13.4 0.92 19.2 3.38 1,111.2 0.28 13.7 0.94 19.8 3.36 1,182.5 0.29 14.4 0.96 21.9 3.35 1,323.8 0.31 16.9 0.97 25.0 3.45 1,509.2 0.33 18.4 1.02 28.0 3.52 1,628.7 0.36 19.7 1.09 30.2 3.82 1,808.8 0.40 22.0 1.12 34.0 3.78 2,054.9 0.43 26.0 1.10 40.0 3.59 2,270.7 0.46 30.3 1.13 48.0 3.33 2,547.6 0.49 35.7 1.16 59.0 3.19 2,878.4 0.53 40.7 1.22 70.2 3.10 3,011.1 0.56 45.1 1.29 82.6 3.01 3,341.7 0.61 46.9 1.34 90.0 3.07 3,532.2 0.66 50.4 1.35 106.1 2.87 3,886.1 0.69 57.8 1.36 127.0 2.79 4,375.0 0.73 64.1 1.35 140.1 2.60 4,624.7 0.74 57.9 1.37 136.4 2.50 4,753.7 0.73 58.4 1.35 144.7 2.40 5,118.9 0.76 63.9 1.32 162.6 2.36 5,702.9 0.81 66.5 1.31 177.5 2.32 6,028.4 0.83 69.5 1.31 184.1 2.23 6,339.7 0.85 continues
From page 116...
... Information technology output is gross domestic product by type of product.
From page 117...
... ACCOUNTING FOR GROWTH IN THE INFORMATION AGE 117 Communications Total IT Gross Domestic Product Value Price Value Price Value Price 66.9 1.33 190.3 2.23 6,464.4 0.87 70.5 1.31 202.5 2.10 6,795.1 0.89 76.7 1.29 219.1 2.00 7,038.5 0.89 84.3 1.26 238.1 1.94 7,579.5 0.93 94.4 1.21 271.2 1.72 7,957.2 0.95 107.8 1.18 307.9 1.48 8,475.4 0.97 119.2 1.17 355.7 1.31 8,961.0 0.98 124.1 1.11 383.1 1.15 9,346.9 0.98 134.0 1.05 430.5 1.05 9,824.2 0.98 152.6 1.00 485.2 1.00 10,399.6 1.00 146.5 0.95 464.7 0.94 10,628.5 1.01 127.4 0.90 428.6 0.88 11,279.4 1.04
From page 118...
... 118 PRODUCTIVITY AND CYCLICALITY IN SEMICONDUCTORS TABLE 2.2 Growth Rates of Outputs and Inputs 1989-1995 1995-2002 Prices Quantities Prices Quantities Outputs Gross Domestic Product 2.20 2.43 1.39 3.59 Information Technology ­4.95 12.02 ­9.58 16.12 Computers ­12.69 17.30 ­30.99 33.37 Software ­2.82 13.34 ­1.31 11.82 Communications Equipment ­1.36 7.19 ­4.16 8.44 Non-Information Technology Investment 2.05 1.10 2.02 2.01 Non-Information Technology Consumption 2.52 2.40 1.79 3.35 Inputs Gross Domestic Income 2.45 2.17 2.10 2.88 Information Technology Capital Services ­3.82 12.58 ­10.66 18.33 Computer Capital Services ­10.46 20.22 ­26.09 32.34 Software Capital Services ­4.40 15.03 ­1.72 14.27 Communications Equipment Capital Services 0.99 5.99 ­5.56 9.83 Non-Information Technology Capital Services 1.71 1.91 1.72 3.01 Labor Services 3.37 1.64 3.42 1.50 xxxNOTES: Average annual percentage rates of growth.
From page 120...
... 120 Price 0.11 0.11 0.11 0.12 0.12 0.13 0.13 0.13 0.14 0.14 0.14 0.15 0.15 0.15 0.16 0.16 0.16 0.16 0.17 0.17 0.18 0.20 0.21 0.22 0.24 Assets Domestic 754.9 787.1 863.5 990.4 1,066.5 1,136.3 1,187.7 1,279.3 1,417.8 1,516.9 1,586.0 1,682.5 1,780.8 1,881.0 2,007.2 2,115.4 2,201.2 2,339.3 2,534.9 2,713.9 3,004.5 3,339.1 3,617.5 3,942.2 4,463.6 Total Tangible Value Price 1.99 2.00 2.04 2.13 2.05 1.97 1.99 1.98 2.01 2.09 2.11 2.11 2.06 2.02 2.00 1.94 1.90 1.86 1.78 1.78 1.79 1.82 1.87 1.86 1.87 IT 4.6 5.7 7.0 8.6 10.0 11.5 12.9 14.3 16.4 19.4 21.1 23.4 25.2 27.8 30.8 33.7 37.1 41.5 47.1 54.5 62.1 71.6 82.5 90.7 100.7 Total Value Assets Price 0.93 0.93 0.95 0.99 0.96 0.92 0.93 0.92 0.94 0.98 0.98 0.98 0.96 0.94 0.94 0.92 0.91 0.89 0.88 0.89 0.91 0.93 0.96 0.98 1.01 Tangible 4.6 5.7 7.0 8.6 10.0 11.5 12.9 14.3 16.4 19.4 21.1 23.1 24.9 27.1 29.9 32.0 34.5 37.8 42.1 47.9 54.4 61.7 70.0 77.3 85.2 Communications Value Domestic and Price 1.16 1.16 1.14 1.10 1.06 1.04 1.02 0.94 0.97 0.96 1.01 1.09 1.06 1.05 Stock Capital 0.1 0.1 0.3 0.4 0.7 1.0 1.5 2.1 2.9 3.4 4.6 6.2 7.0 8.1 Software Value Technology 836.37 716.89 597.41 414.53 333.84 283.77 258.34 232.09 176.08 142.24 Price 2,389.62 2,389.62 1,792.22 1,194.81 Information 0.2 0.2 0.4 0.5 1.0 1.6 2.2 2.9 3.7 4.3 5.3 6.3 6.3 7.4 Computer Value 2.3 TABLE Year 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
From page 121...
... 121 0.26 0.27 0.30 0.32 0.35 0.38 0.43 0.47 0.53 0.55 0.57 0.60 0.64 0.67 0.70 0.74 0.78 0.79 0.79 0.79 0.79 0.79 0.82 0.83 0.86 0.91 0.95 1.00 1.05 1.11 goods, durable 5,021.4 5,442.4 6,242.6 6,795.1 7,602.8 8,701.7 10,049.5 11,426.5 13,057.6 14,020.9 14,589.5 15,901.1 17,616.4 18,912.3 20,263.5 21,932.4 23,678.3 24,399.0 24,896.4 25,218.3 25,732.9 26,404.3 28,003.7 29,246.9 31,146.2 33,888.5 36,307.6 39,597.1 42,566.8 45,892.0 consumer and assets 1.89 1.94 2.06 2.09 2.04 2.03 2.05 2.09 2.17 2.20 2.16 2.11 2.05 1.96 1.91 1.87 1.83 1.77 1.73 1.64 1.58 1.52 1.44 1.34 1.25 1.13 1.05 1.00 0.94 0.89 fixed include 112.0 126.7 144.8 159.8 172.8 194.9 225.8 264.4 313.5 356.4 396.5 447.3 497.0 540.2 589.0 646.5 705.9 751.7 797.0 833.5 888.8 951.8 1,026.5 1,099.8 1,203.6 1,292.2 1,427.1 1,609.0 1,687.6 1,739.7 assets tangible 1.02 1.07 1.14 1.18 1.16 1.19 1.22 1.28 1.36 1.40 1.41 1.42 1.42 1.40 1.39 1.37 1.36 1.35 1.34 1.32 1.30 1.28 1.24 1.20 1.18 1.11 1.05 1.00 0.95 0.91 Domestic 2000. in 93.8 105.8 120.6 133.0 142.2 160.3 181.9 210.5 243.4 270.5 293.3 320.6 348.1 374.1 402.9 432.9 461.6 487.5 508.1 528.8 550.7 578.0 605.5 637.6 678.7 704.3 741.3 805.2 844.3 874.0 one to 1.07 1.12 1.19 1.19 1.21 1.21 1.24 1.29 1.35 1.39 1.38 1.37 1.36 1.31 1.31 1.30 1.25 1.22 1.22 1.12 1.11 1.08 1.07 1.04 1.00 0.97 0.97 1.00 1.01 1.00 normalized are Prices 9.6 11.7 14.4 16.3 18.1 20.4 24.5 29.6 36.2 43.2 50.3 60.1 70.5 79.3 91.2 105.4 121.9 140.6 163.2 175.0 199.2 218.2 242.7 269.7 312.4 360.6 433.7 515.5 563.7 583.9 dollars.
From page 122...
... 122 Price 0.14 0.13 0.14 0.14 0.14 0.15 0.15 0.16 0.16 0.17 0.16 0.17 0.17 0.17 0.18 0.19 0.20 0.21 0.22 0.22 0.22 0.23 0.24 0.26 0.28 Income 321.0 322.0 343.4 382.1 395.1 436.6 428.1 471.8 493.7 537.2 512.6 556.9 573.1 587.6 631.3 675.9 737.6 806.8 881.7 928.7 981.9 1,052.5 1,111.2 1,182.5 1,323.8 Gross Domestic Value Price 8.44 6.12 6.04 6.36 6.78 6.85 4.88 6.08 6.24 4.84 4.88 5.66 5.33 5.15 5.41 4.63 4.40 4.95 4.72 3.96 3.66 3.44 3.58 3.87 3.58 IT 1.7 1.4 1.7 2.0 2.6 3.1 2.5 3.5 4.0 3.5 3.9 5.2 5.3 5.7 7.0 7.1 8.0 10.5 12.4 12.8 14.0 15.3 18.5 23.0 24.5 Total Value Income Price 1.21 0.87 0.86 0.91 0.97 0.98 0.70 0.87 0.89 0.69 0.70 0.81 0.76 0.72 0.77 0.68 0.69 0.80 0.75 0.68 0.64 0.64 0.68 0.70 0.73 Domestic 1.7 1.4 1.7 2.0 2.6 3.1 2.5 3.5 4.0 3.5 3.9 4.9 5.1 5.3 6.3 6.2 6.8 8.7 9.2 9.4 9.8 Gross 10.9 12.7 14.3 16.0 Communications Value and Price 1.54 1.51 1.53 1.59 1.40 1.32 1.36 1.43 1.14 1.27 1.12 1.17 1.52 1.37 Services Capital 0.1 0.1 0.1 0.2 0.3 0.4 0.6 1.0 1.1 1.5 1.7 2.3 3.5 3.7 Software Value Technology 749.35 680.70 675.44 424.81 329.85 253.51 246.33 274.21 182.44 Price 1,843.00 1,801.01 2,651.36 2,221.38 1,301.76 Information 0.2 0.2 0.3 0.5 0.7 0.8 1.2 2.2 2.4 2.6 2.7 3.6 5.2 4.9 Computer Value 2.4 TABLE Year 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
From page 123...
... 123 0.30 0.32 0.36 0.39 0.42 0.45 0.49 0.51 0.55 0.58 0.64 0.68 0.69 0.70 0.72 0.77 0.79 0.81 0.82 0.85 0.86 0.90 0.91 0.94 0.96 0.96 0.98 1.00 1.00 1.06 1,509.2 1,628.7 1,808.8 2,054.9 2,270.7 2,547.6 2,878.4 3,011.1 3,341.7 3,532.2 3,886.1 4,375.0 4,624.7 4,753.7 5,118.9 5,702.9 6,028.4 6,339.7 6,464.4 6,795.1 7,038.5 7,579.5 7,957.2 8,475.4 8,961.0 9,346.9 9,824.2 10,399.6 10,628.5 11,279.4 3.91 3.56 3.56 3.51 4.54 3.92 4.00 3.41 2.84 2.61 2.61 2.64 2.45 2.32 2.38 2.39 2.27 2.17 1.93 1.99 1.85 1.83 1.80 1.66 1.46 1.37 1.15 1.00 0.92 0.86 30.2 30.9 34.4 37.5 54.2 54.4 66.8 68.8 69.9 76.3 91.1 112.8 127.0 141.9 169.3 195.2 211.6 228.3 225.6 261.0 277.5 313.8 358.0 393.5 426.0 499.3 520.2 552.2 594.1 612.5 0.92 0.76 0.82 0.82 1.26 0.98 1.19 0.96 0.84 0.83 0.87 0.93 0.96 0.98 1.06 1.20 1.14 1.10 0.99 1.02 1.09 1.14 1.20 1.07 1.01 1.15 1.06 1.00 0.88 0.82 2000. in 21.7 19.5 22.3 23.9 39.4 33.6 44.9 40.0 38.6 41.4 46.4 53.9 60.3 67.3 78.9 97.2 98.8 97.1 one 102.5 105.4 118.2 132.6 150.2 144.2 147.6 184.4 188.1 201.4 199.5 202.4 to normalized 1.32 1.34 1.46 1.44 1.43 1.50 1.50 1.51 1.45 1.39 1.40 1.46 1.46 1.44 1.46 1.54 1.57 1.45 1.29 1.45 1.21 1.29 1.21 1.20 1.17 1.10 1.00 1.00 1.01 1.07 are Prices 4.1 4.9 6.2 7.0 7.8 9.0 10.4 12.2 13.7 15.2 18.0 22.4 26.7 31.0 36.5 44.6 54.3 60.0 62.7 82.4 80.0 97.3 102.7 116.3 134.4 152.5 165.7 193.9 219.0 247.2 dollars.
From page 124...
... 124 Hours Worked 129,846 126,384 129,201 136,433 137,525 138,134 133,612 137,594 139,758 138,543 134,068 137,800 139,150 138,493 141,258 142,414 144,920 149,378 154,795 156,016 158,604 162,414 159,644 158,943 162,890 169,329 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.8 1.9 2.1 2.3 2.3 2.5 2.5 2.6 2.7 2.8 3.0 3.2 3.3 3.7 3.9 4.3 4.7 5.0 5.3 Hourly Compensation Weekly Hours 40.6 40.2 39.8 39.7 39.2 38.8 38.4 38.7 38.4 37.9 37.6 37.8 37.6 37.4 37.4 37.3 37.2 37.2 36.8 36.3 36.0 35.9 35.3 35.2 35.3 35.2 Employment 61,536 60,437 62,424 66,169 67,407 68,471 66,843 68,367 69,968 70,262 68,578 70,149 71,128 71,183 72,673 73,413 74,990 77,239 80,802 82,645 84,733 87,071 86,867 86,715 88,838 92,542 Quality 0.73 0.73 0.75 0.76 0.77 0.79 0.79 0.80 0.80 0.81 0.82 0.82 0.83 0.84 0.85 0.86 0.86 0.86 0.87 0.87 0.88 0.88 0.88 0.89 0.89 0.89 150.1 165.5 181.3 210.7 222.5 238.5 240.7 252.7 272.4 293.0 307.4 316.9 341.7 352.1 374.1 382.7 412.0 448.1 494.8 518.9 582.6 641.4 683.1 740.7 813.3 903.9 Value Quantity 2,324.8 2,262.8 2,350.6 2,531.5 2,598.2 2,653.0 2,588.7 2,675.7 2,738.0 2,740.9 2,671.8 2,762.8 2,806.6 2,843.4 2,944.4 2,982.3 3,055.7 3,149.7 3,278.8 3,327.2 3,405.4 3,491.1 3,439.2 3,439.5 3,528.8 3,672.4 Services Services Labor Price 0.06 0.07 0.08 0.08 0.09 0.09 0.09 0.09 0.10 0.11 0.12 0.11 0.12 0.12 0.13 0.13 0.13 0.14 0.15 0.16 0.17 0.18 0.20 0.22 0.23 0.25 Labor 2.5 TABLE Year 1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973
From page 125...
... 125 168,800 164,460 168,722 174,265 181,976 187,589 186,202 186,887 183,599 186,175 195,221 199,424 200,998 207,119 212,882 218,811 220,475 216,281 216,873 221,699 227,345 232,675 235,859 242,242 248,610 253,276 257,048 255,054 252,399 thousands in is hours. of Employment 5.8 6.4 7.0 7.6 8.2 8.9 9.7 lions 10.4 11.2 12.0 12.6 13.3 14.4 14.6 14.9 15.8 16.7 17.6 18.8 19.5 19.7 20.0 20.7 21.4 22.2 23.3 24.4 25.6 26.1 2000.
From page 126...
... 126 1995-2002 3.59 0.64 0.34 0.19 0.11 2.95 0.41 2.55 2.88 0.93 0.52 0.23 0.18 1.07 0.88 0.71 share. value the 1989-1995 2.43 0.37 0.15 0.15 0.08 2.05 0.21 1.85 2.17 0.49 0.22 0.16 0.10 0.71 0.98 0.26 by multiplied 1973-1989 Outputs 2.97 0.34 0.18 0.08 0.08 2.63 0.45 2.18 Inputs 2.68 0.38 0.20 0.07 0.11 1.15 1.15 0.29 growth, of rate 1948-1973 3.99 0.12 0.03 0.02 0.07 3.87 1.04 2.82 2.99 0.15 0.04 0.02 0.09 1.79 1.04 1.00 the is input or 1948-2002 3.46 0.28 0.13 0.07 0.08 3.18 0.69 2.49 2.79 0.36 0.17 0.08 0.11 1.39 1.05 0.67 output an of Growth contribution Services Product The Investment Consumption Services Capital growth.
From page 127...
... Labor of rates Average Deepening of Quality percentage Technology Technology Capital Labor Technology Technology Productivity of of annual Sources Productivity Product 2.7 Labor Factor Worked Average Domestic Information Non-Information Information Non-Information Input Stock Quality Input Quality Contribution Contribution Total Hours Average TABLE Gross Labor Labor Capital Capital Capital NOTES:
From page 128...
... 128 average by 0.71 0.47 0.33 0.06 0.08 0.24 4.10 1.00 1.78 1.33 1995-2002 ­3.4 ­6.3 ­0.3 95.90 ­11.7 ­33.1 weighted changes, 0.26 0.23 0.13 0.06 0.04 0.03 0.0 3.04 0.83 1.13 1.09 ­7.4 ­5.3 ­3.8 96.96 1989-1995 ­15.1 ice pr Growth Shares TFP Changes relative to 0.29 0.20 0.13 0.03 0.05 0.09 Price 2.35 0.64 0.49 1.22 ­8.5 ­5.1 ­4.1 ­0.1 are 1973-1989 ­21.5 Nominal 97.65 Relative Average Contributions Contributions 1.00 0.05 0.02 0.00 0.03 0.95 1.00 0.10 0.07 0.83 1948-1973 ­4.1 ­5.1 ­2.9 ­1.0 99.00 ­22.0 income. 1948-2002 0.67 0.17 0.10 0.02 0.04 0.50 2.03 0.46 0.53 1.04 domestic ­6.72 ­4.87 ­3.79 ­0.51 97.97 ­22.50 gross of price Growth the to relative Productivity are Prices Factor Total growth.
From page 129...
... NOTE: All price indexes are divided by the output price index.
From page 130...
... NOTE: All price indexes are divided by the output price index. 5.0 4.5 4.0 3.5 3.0 2.5 Percent 2.0 1.5 1.0 0.5 0.0 1948 1953 1958 1963 1968 1973 1978 1983 1988 1993 1998 Year Computers Communications Software Total FIGURE 2.1 Output Shares of Information Technology by Type, 1948-2002.
From page 131...
... NOTE: Output contributions are the average annual growth rates, weighted by the output shares.
From page 132...
... 2.50 (%) 2.00 1.50 1.00 Contribution 0.50 Annual 0.00 1948-1973 1973-1989 1989-1995 1995-2002 Years Non-IT Capital Services IT Capital Services FIGURE 2.5 Capital Input Contribution of Information Technology.
From page 133...
... NOTE: Contributions are average annual relative price changes, weighted by average nominal output shares from Table 2.8.
From page 134...
... 3.50 (%) 3.00 2.50 2.00 1.50 Contribution 1.00 Annual 0.50 0.00 1948-1973 1973-1989 1989-1995 1995-2002 Years Labor Quality Non-IT Capital Deepening IT Capital Deepening Non-IT Production IT Production FIGURE 2.9 Sources of Average Labor Productivity Growth.


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