Has the surge in computer spending fundamentally changed the economy?
The computer sector has been one of the fastest growing segments of the U.S. economy over the past two decades. The dynamic nature of the computer sector and the sector's increased prominence in overall spending in the economy have led some analysts to suggest that the economy is entering a New Era, where the economy will return to the high-growth, low-inflation conditions of the 1950s and 1960s.> Although spending on computers is spread throughout all sectors of the economy, the key channel through which the economy might be transformed is investment spending on computers by businesses. Spending on computers by businesses is key because the contribution of computers to output growth depends crucially on the quantity of computers used in the production process. If rapid spending on computers does lead to faster output growth, then understanding the magnitude of the contribution of computer capital to output growth will be crucial for long-run forecasting and policy analysis.> Haimowitz examines whether computers have fundamentally changed the economy. He finds that computers have had only a modest impact on output growth until now, but the future impact could be larger.
Volume (Year): (1998)
Issue (Month): Q II ()
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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 355-361, May.
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- Jeremy Greenwood, 1999.
"The Third Industrial Revolution,"
Federal Reserve Bank of Cleveland, issue Q II, pages 2-12.
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- Joel Mokyr, 1997. "Are we living in the middle of an Industrial Revolution?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 31-43.
- Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter. Full references (including those not matched with items on IDEAS)