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Information-Processing Equipment and Software in the National Accounts

In: Measuring Capital in the New Economy

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Author Info

  • Bruce T. Grimm
  • Brent R. Moulton
  • David B. Wasshausen

Abstract

In the U.S. national income and product accounts (NIPA's), most of the types of goods in the investment category "information processing (IP) equipment and software" have experienced rapidly changing technology and are thus candidates for inclusion in the new economy. The NIPA price indexes for computers and peripheral equipment, computer software, and communication equipment all, at least in part, include quality adjustments based on hedonic studies. In addition, anecdotal evidence strongly indicates that instruments have also have undergone substantial quality improvements, although no hedonic quality adjustments are currently being made to their prices. Together, these goods make up more than nine-tenths of the category. There is also some evidence that there have been substantial quality improvements for the remaining two types of goods in the category, photocopy and related equipment and office and accounting equipment. In order to facilitate research leading to improved measurement of information technology, this paper discusses the relationship between private fixed investment in IP equipment and software and GDP, explains how the current- and constant-dollar estimates are prepared, and finally assess recent progress in measurement and plans for improvement.

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This chapter was published in:

  • Carol Corrado & John Haltiwanger & Dan Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1, October.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10626.

    Handle: RePEc:nbr:nberch:10626

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    1. Erik Brynjolfsson & Chris F. Kemerer, 1993. "Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market," Working Paper Series 158, MIT Center for Coordination Science.
    2. Brent R. Moulton, 2001. "The Expanding Role of Hedonic Methods in the Official Statistics of the United States," BEA Papers, Bureau of Economic Analysis 0018, Bureau of Economic Analysis.
    3. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2003. "Export versus FDI," Harvard Institute of Economic Research Working Papers 1998, Harvard - Institute of Economic Research.
    4. Robert E. Lipsey & Zadia Feliciano, 2002. "Foreign Entry into U.S. Manufacturing by Takeovers and the Creation of New Firms," NBER Working Papers 9122, National Bureau of Economic Research, Inc.
    5. Ellen Dulberger, 1993. "Sources of Price Decline in Computer Processors : Selected Electronic Components," NBER Chapters, in: Price Measurements and Their Uses, pages 103-124 National Bureau of Economic Research, Inc.
    6. Stephen Ross Yeaple, 2003. "The Role of Skill Endowments in the Structure of U.S. Outward Foreign Direct Investment," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 726-734, August.
    7. Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2002. "International Joint Ventures and the Boundaries of the Firm," NBER Working Papers 9115, National Bureau of Economic Research, Inc.
    8. William D. Nordhaus, 2000. "Productivity Growth and the New Economy," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1284, Cowles Foundation for Research in Economics, Yale University.
    9. Stephen D. Oliner & Daniel E. Sichel, 1994. "Computers and Output Growth Revisited: How Big Is the Puzzle?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 25(2), pages 273-334.
    10. Michael P. Keane & Susan E. Feinberg, 2006. "Accounting for the Growth of MNC-Based Trade Using a Structural Model of U.S. MNCs," American Economic Review, American Economic Association, American Economic Association, vol. 96(5), pages 1515-1558, December.
    11. Neil Gandal, 1994. "Hedonic Price Indexes for Spreadsheets and an Empirical Test for Network Externalities," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 160-170, Spring.
    12. Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, American Economic Association, vol. 87(4), pages 520-44, September.
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    Cited by:
    1. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The case of the missing productivity growth: or, does information technology explain why productivity accelerated in the United States but not the United Kingdom?," Working Paper Series, Federal Reserve Bank of Chicago WP-03-08, Federal Reserve Bank of Chicago.
    2. Andrew Sharpe, 2005. "What Explains the Canada-US ICT Investment Gap?," International Productivity Monitor, Centre for the Study of Living Standards, Centre for the Study of Living Standards, vol. 11, pages 21-38, Fall.
    3. Gilbert Cette & Christian Pfister, 2003. "The challenges of the "new economy" for monetary policy," BIS Papers chapters, in: Bank for International Settlements (ed.), Monetary policy in a changing environment, volume 19, pages 213-233 Bank for International Settlements.
    4. Jorgenson, Dale W. & Nomura, Koji, 2005. "The industry origins of Japanese economic growth," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 482-542, December.
    5. Johanna Melka & Nanno Mulder & Laurence Nayman & Soledad Zignago, 2003. "Skills, Technology and Growth is ICT the Key to Success ? An Analysis of ICT Impact on French Growth," Working Papers 2003-04, CEPII research center.
    6. Centre for the Study of Living Standards, 2005. "What Explains the Canada-US ICT Investment Intensity Gap?," CSLS Research Reports, Centre for the Study of Living Standards 2005-06, Centre for the Study of Living Standards.
    7. Gilbert Cette & Christian Pfister, 2004. "Challenges of the “New Economy” for Monetary Policy," International Productivity Monitor, Centre for the Study of Living Standards, Centre for the Study of Living Standards, vol. 8, pages 27-36, Spring.
    8. Tarkhani, Faouzi & Harchaoui, Tarek, 2004. "Qu'est-il advenu de la croissance economique et de la productivite au Canada et aux Etats-Unis a l'ere de l'information?," Serie de documents de recherche sur l'analyse economique (AE) 2004025f, Statistics Canada, Direction des etudes analytiques.
    9. Jacob Funk Kirkegaard, 2005. "Outsourcing and Offshoring: Pushing the European Model Over the Hill, Rather Than Off the Cliff!," Working Paper Series, Peterson Institute for International Economics WP05-1, Peterson Institute for International Economics.
    10. Melka, Johanna & Nayman, Laurence, 2005. "L’impact des nouvelles technologies de l’information sur la croissance française, 1980-2001," L'Actualité Economique, Société Canadienne de Science Economique, Société Canadienne de Science Economique, vol. 81(1), pages 75-110, Mars-Juin.
    11. Carol Corrado & Charles Hulten & Daniel Sichel, 2006. "Intangible capital and economic growth," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2006-24, Board of Governors of the Federal Reserve System (U.S.).
    12. Tarkhani, Faouzi & Harchaoui, Tarek, 2004. "Whatever Happened to Canada-United States Economic Growth and Productivity Performance in the Information Age?," Economic Analysis (EA) Research Paper Series 2004025e, Statistics Canada, Analytical Studies Branch.
    13. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The Case of the Missing Productivity Growth: Or, Does Information Technology Explain why Productivity Accelerated in the US but not the UK?," NBER Working Papers 10010, National Bureau of Economic Research, Inc.

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