Productivity, Volume 3
The American economy has experienced renewed growth since 1995, with this surge rooted in the development and deployment of information technology (IT). This book traces the American growth resurgence to its sources within individual industries, documents the critical role of IT, and shows how U.S. investment in IT has important parallels in other developed countries.
In analyzing the experience in the United States, the authors identify four IT-producing industries, 17 IT-using industries, and 23 non-IT industries and show that the IT-producing and IT-using industries play a disproportionate role in the American growth resurgence. These industries account for only about 30 percent of US GDP but contributed half of the acceleration in economic growth. The study finds that differences in the relative importance of IT-producing industries in other G7 countries have contributed to wide disparities in the impact of IT on economic growth.
Productivity, Volume 3 will be of special interest to analysts of the "new economy" and its remarkable persistence through periods of boom and recession.
About the Authors
Dale W. Jorgenson is Samuel W. Morris University Professor of Economics at Harvard University.
Mun S. Ho is Visiting Fellow at Harvard’s Institute for Quantitative Social Science.
"No trio of technologies has had a bigger impact on America's productivity revival than computers, communications and software, and no trio of researchers had a bigger impact on our understanding of the productivity revival than Jorgenson, Ho, and Stiroh. This volume is required reading for anyone with a serious interest in the modern productivity revolution."
—Erik Brynjolfsson, Schussel Professor, MIT Sloan School of Management and editor of Understanding the Digital Economy (MIT Press, 2000)
"This new volume applies state-of-the-art techniques and data analyses to understand one of the great economic puzzles of recent years. Why did productivity growth recover in the mid-1990s after over twenty years of sluggishness? Their answer is that investment in information technology has spurred growth, and they explore this idea in depth, with detailed industry analysis, and in breadth, across advanced economies. This is a monumental and important work."
—Martin Neil Baily, Senior Fellow, Institute for International Economics and former Chairman, Council of Economic Advisers
"Jorgenson and his talented coauthors Ho and Stiroh have been among the leaders in analyzing the post-1995 revival in American productivity growth. Notable in this volume is their pathbreaking analysis of human capital, with its prediction that the contribution of higher labor quality to U.S. economic growth will steadily diminish over the next few decades. Lovers of controversy will relish the authors' unique interpretation of 'the demise' of growth accounting."
—Robert J. Gordon, Stanley G. Harris Professor in the Social Sciences, Department of Economics, Northwestern University