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The Resurgence of Growth in the Late 1990s: Is Information Technology the Story?

  • Stephen D. Oliner
  • Daniel E. Sichel

The growth of U.S. labor productivity rebounded in the second half of the 1990s, after nearly a quarter century of sluggish gains. We assess the contribution of information technology to this rebound, using the same neoclassical framework as in our earlier work. We find that a surge in the use of information technology capital and faster efficiency gains in the production of computers account for about two-thirds of the speed-up in productivity growth between the first and second halves of the 1990s. Thus, to answer the question posed in the title of the paper, information technology largely is the story.

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Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 14 (2000)
Issue (Month): 4 (Fall)
Pages: 3-22

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Handle: RePEc:aea:jecper:v:14:y:2000:i:4:p:3-22
Note: DOI: 10.1257/jep.14.4.3
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  1. Karl Whelan, 2002. "Computers, Obsolescence, And Productivity," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 445-461, August.
  2. Hulten, Charles R, 1978. "Growth Accounting with Intermediate Inputs," Review of Economic Studies, Wiley Blackwell, vol. 45(3), pages 511-18, October.
  3. Stiroh, Kevin J, 1998. "Computers, Productivity, and Input Substitution," Economic Inquiry, Western Economic Association International, vol. 36(2), pages 175-91, April.
  4. Jeremy Greenwood & Boyan Jovanovic, 2000. "Accounting for Growth," RCER Working Papers 475, University of Rochester - Center for Economic Research (RCER).
    • Jeremy Greenwood & Boyan Jovanovic, 2001. "Accounting for Growth," NBER Chapters, in: New Developments in Productivity Analysis, pages 179-224 National Bureau of Economic Research, Inc.
  5. Andreas Hornstein, 1999. "Growth accounting with technological revolutions," Economic Quarterly, Federal Reserve Bank of Richmond, issue Sum, pages 1-22.
  6. David, Paul A, 1990. "The Dynamo and the Computer: An Historical Perspective on the Modern Productivity Paradox," American Economic Review, American Economic Association, vol. 80(2), pages 355-61, May.
  7. Erik Brynjolfsson & Michael D. Smith, 2000. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Management Science, INFORMS, vol. 46(4), pages 563-585, April.
  8. 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.
  9. Michael T. Kiley, 1999. "Computers and growth with costs of adjustment: will the future look like the past?," Finance and Economics Discussion Series 1999-36, Board of Governors of the Federal Reserve System (U.S.).
  10. Oecd, 1998. "Electronic Commerce: Prices and Consumer Issues for Three Products: Books, Compact Discs and Software," OECD Digital Economy Papers 32, OECD Publishing.
  11. Fischer, Stanley, 1988. "Symposium on the Slowdown in Productivity Growth," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 3-7, Fall.
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