Capital Accumulation, Productivity and Growth

A consensus has emerged that the remarkable behavior of IT prices provides the key to the surge in US economic growth after 1995. The relentless decline in the prices of information technology equipment and software has steadily enhanced the role of IT investment. Productivity growth in IT-producing industries has risen in importance and a productivity revival is underway in the rest of the economy. The surge of IT investment in the United States after 1995 has counterparts in all other industrialized countries. It is essential to use comparable data and methodology in order to provide rigorous international comparisons. A crucial role is played by measurements of IT prices. The US national accounts have incorporated measures of IT prices that hold performance constant since 1985. Schreyer (2000) has extended these measures to other industrialized countries by constructing "internationally harmonized prices". The acceleration in the IT price decline in 1995 triggered a burst of IT investment in all of the G7 nations — Canada, France, Germany, Italy, Japan, the UK, as well as the US. These countries also experienced a rise in productivity growth in the IT-producing industries. However, differences in the relative importance of these industries have generated wide disparities in the impact of IT on economic growth. The role of the IT-producing industries is greatest in the US, which leads the G7 in output per capita.

Information Technology and the Japanese Economy

In this paper we compare sources of economic growth in Japan and the United States from 1975 through 2003, focusing on the role of information technology (IT). We have adjusted Japanese data to conform to U.S. definitions in order to provide a rigorous comparison between the two economies. The adjusted data show that the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply after 1995. The contribution of total factor productivity growth from the IT sector in Japan also increased, while the contributions of labor input and productivity growth from the Non-IT sector lagged far behind the United States. Our projection of potential economic growth in Japan from for the next decade is substantially below that in the United States, mainly due to slower growth of labor input. Our projections of labor productivity growth in the two economies are much more similar.

Information technology and the world economy

The purpose of this paper is to analyze the impact of investment in information technology (IT) equipment and software on the recent resurgence in world economic growth. The crucial role of IT investment in the growth of the U.S. economy has been thoroughly documented and widely discussed. Jorgenson (2001) has shown that the remarkable behavior of IT prices is the key to understanding the resurgence of American economic growth. This behavior can be traced to developments in semiconductor technology that are widely understood by technologists and economists.

Information Technology and The World Growth Resurgence

This paper analyzes the impact of investment in information technology (IT) on the recent resurgence of world economic growth. We describe the growth of the world economy, seven regions, and fourteen major economies during the period 1989-2004. We allocate the growth of world output between input growth and productivity and find, surprisingly, that input growth greatly predominates! Moreover, differences in per capita output levels are explained by differences in per capita input, rather than variations in productivity. The contributions of IT investment have increased in all regions, but especially in industrialized economies and Developing Asia.growth, investment, productivity, information technology

The Industry Origins of Japanese Economic Growth

This paper presents new data on the sources of growth for the Japanese economy over the period 1960- 2000. The principal innovation is the incorporation of detailed information for individual industries, including those involved in the production of computers, communications equipment, and electronic components as information technology equipment. We show that economic growth is dominated by investments and productivity growth in information technology, both for individual industries and the economy as a whole. We also show that the revival of total factor productivity growth accounts for the modest resurgence of the Japanese economy since 1995.

Les technologies de l’information et les économies du G7

Dans cet article, je compare la croissance économique des divers pays du G7 – le Canada, la France, l’Allemagne, l’Italie, le Japon, le Royaume-Uni et les États-Unis. Ces comparaisons s’articuleront autour des répercussions de l’investissement dans les technologies de l’information et les logiciels au cours de la période 1980-2001. En ayant recours aux prix internationaux harmonisés, j’ai analysé le rôle de l’investissement et de la productivité comme sources de la croissance dans les pays du G7 au cours de la période 1980-2001. J’ai subdivisé cette période de part et d’autre des années quatre-vingt-neuf et quatre-vingt-quinze, afin de pouvoir me concentrer davantage sur l’époque la plus récente. J’ai décomposé la croissance de la production de chaque pays en accroissement des intrants et en hausse de la productivité. Enfin, j’ai réparti l’augmentation des intrants entre les investissements dans les biens corporels, particulièrement dans le domaine des technologies de l’information et des logiciels, et dans le capital humain.In this paper I present new international comparisons of economic growth among the G7 nations – Canada, France, Germany, Italy, Japan, the U.K. and the U.S. These comparisons focus on the impact of investment in information technology (IT) equipment and software over the period 1980-2000. Using internationally harmonized prices, I have analyzed the role of investment and productivity as sources of growth in the G7 countries over the period 1980-2000. I have subdivided the period in 1989 and 1995 in order to focus on the most recent experience. I have decomposed growth of output for each country between growth of input and productivity. Finally, I have allocated the growth of input between investments in tangible assets, especially information technology and software, and human capital