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Moore's Law and the Semiconductor Industry: A Vintage Model

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Author Info

  • Ana Aizcorbe

    (Bureau of Economic Analysis)

  • Samuel Kortum

    (University of Minnesota)

Abstract

In this paper we develop a vintage model to gain a better understanding of the semiconductor industry and its role in recent U.S. productivity gains. Unlike previous work, in our model the observed price declines of individual chips are driven by the introduction of better vintages rather than by learning economies. Dominated chips, nonetheless, continue to be produced, for a time, due to sunk investments in chip-specific production equipment. The model lends partial support to Jorgenson's hypothesis that an exogenous increase in Moore's Law could have generated the more rapid price declines, and faster productivity growth, seen after 1995. Copyright The editors of the "Scandinavian Journal of Economics", 2005 .

(This abstract was borrowed from another version of this item.)

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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 0412008.

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Length: 43 pages
Date of creation: 15 Dec 2004
Date of revision:
Handle: RePEc:wpa:wuwpio:0412008

Note: Type of Document - pdf; pages: 43
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Web page: http://128.118.178.162

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Keywords: Semiconductors; High Technology Industries;

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References

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  1. Oliner, Stephen D. & Sichel, Daniel E., 2003. "Information technology and productivity: where are we now and where are we going?," Journal of Policy Modeling, Elsevier, vol. 25(5), pages 477-503, July.
  2. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
  3. Lucas, Robert E, Jr & Prescott, Edward C, 1971. "Investment Under Uncertainty," Econometrica, Econometric Society, vol. 39(5), pages 659-81, September.
  4. Ana Aizcorbe, 2002. "Why are semiconductor prices falling so fast? Industry estimates and implications for productivity measurement," Finance and Economics Discussion Series 2002-20, Board of Governors of the Federal Reserve System (U.S.).
  5. Siebert, Ralph, 2003. "Learning by Doing and Multiproduction Effects Over the Life Cycle: Evidence from the Semiconductor Industry," CEPR Discussion Papers 3734, C.E.P.R. Discussion Papers.
  6. Nile W. Hatch & David C. Mowery, 1998. "Process Innovation and Learning by Doing in Semiconductor Manufacturing," Management Science, INFORMS, vol. 44(11-Part-1), pages 1461-1477, November.
  7. Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research.
  8. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2002. "Projecting productivity growth: lessons from the U.S. growth resurgence," Economic Review, Federal Reserve Bank of Atlanta, issue Q3, pages 1-13.
  9. Jovanovic, Boyan & Lach, Saul, 1989. "Entry, Exit, and Diffusion with Learning by Doing," American Economic Review, American Economic Association, vol. 79(4), pages 690-99, September.
  10. Moene, Karl Ove & Wallerstein, Michael, 1997. "Pay Inequality," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 403-30, July.
  11. Irwin, Douglas A & Klenow, Peter J, 1994. "Learning-by-Doing Spillovers in the Semiconductor Industry," Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1200-1227, December.
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Citations

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Cited by:
  1. Dennis Fixler, 2009. "Accounting for R&D in the National Accounts," BEA Papers 0094, Bureau of Economic Analysis.
  2. Adam Copeland & Adam Hale Shapiro, 2010. "The Impact of Competition on Technology Adoption: An Apples-to-PCs Analysis," BEA Working Papers 0063, Bureau of Economic Analysis.
  3. Ana Aizcorbe & Stephen D. Oliner & Daniel E. Sichel, 2006. "Shifting trends in semiconductor prices and the pace of technological progress," Finance and Economics Discussion Series 2006-44, Board of Governors of the Federal Reserve System (U.S.).
  4. Boyan Jovanovic & Chung-Yi Tse, 2010. "Entry and Exit Echoes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 514-536, July.
  5. Raphael Anton Auer & Philip Ulrich Sauré, 2011. "Spatial Competition in Quality, Demand-Induced Innovation, and Schumpeterian Growth," Working Papers 2011-10, Swiss National Bank.
  6. Siebert, Ralph Bernd, 2010. "Learning-by-Doing and Cannibalization Effects at Multi-Vintage Firms: Evidence from the Semiconductor Industry," MPRA Paper 24008, University Library of Munich, Germany.
  7. Boyan Jovanovic & Chung-Yi Tse, 2006. "Creative Destruction in Industries," NBER Working Papers 12520, National Bureau of Economic Research, Inc.
  8. Ana Aizcorbe, 2005. "Price Deflators for High Technology Goods and the New Buyer Problem," Industrial Organization 0502009, EconWPA.
  9. Adam Copeland & Adam Hale Shapiro, 2013. "Price setting in an innovative market," Working Paper Series 2013-04, Federal Reserve Bank of San Francisco.
  10. Kaldasch, Joachim, 2014. "Evolutionary Model of Moore’s Law," MPRA Paper 54397, University Library of Munich, Germany.

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