Technology and growth: an overview

During the 1990s, the Federal Reserve has pursued its twin goals of price stability and steady employment with considerable success. But despite--or perhaps because of--this success, concerns about the pace of economic and productivity growth have attracted renewed attention. Many observers ruefully note that the average pace of GDP growth has remained below rates achieved in the 1960s and that a period of rapid investment in computers and other capital equipment has had disappointingly little impact on the productivity numbers. Most of the industrial world has experienced a similar decline in trend and productivity growth, an increase in income inequality, and even slower job creation than we have seen here in the United States. Many members of the economics profession concur with The Economist that \"understanding growth is surely the most urgent task in economics,\" and the last few years have seen a resurgence in research on the economics of growth. For these reasons, the Federal Reserve Bank of Boston devoted its fortieth economic conference, held in June 1996, to Technology and Growth, to explore what we know and clarify what we do not know about the issues. This article reviews the presentations at the conference and the themes that emerged from the ensuing discussions.