Do Computers Make Output Harder to Measure?
AbstractIn recent years, U.S. productivity growth accelerated sharply in manufacturing, but has remained sluggish in the most computer-intensive service industries. This paper explores the possibility that information technology is generating output that is increasingly hard to measure in non-manufacturing industries, which contributes to the divergence in industry productivity growth rates. Our results suggest that measurement error in 13 computer-intensive, non-manufacturing industries increased between 0.74 and 1.57 percentage points per year in the 1990s, which understates annual aggregate productivity growth by 0.10 to 0.20 percentage points in the 1990s. This adds to an estimated 0.22 to 0.30 percentage point error from the increasing share of aggregate output in these hard-to-measure industries. Thus, increasing measurement problems may understate aggregate productivity growth by an additional 0.32 to 0.50 percentage points per year in the 1990s and play an important role in understanding recent productivity trends at the industry level.
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Bibliographic InfoPaper provided by The Conference Board, Economics Program in its series Economics Program Working Papers with number 00-02.
Length: 46 pages
Date of creation: Apr 2000
Date of revision:
Publication status: Published in Journal of Technology Transfer, Vol. 26, No. 4, 2001, pages 295-321.
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Other versions of this item:
- L8 - Industrial Organization - - Industry Studies: Services
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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