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Shifting Trends in Semiconductor Prices and the Pace of Technological Progress

Author

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  • Ana Aizcorbe

    (Department of Economics, Bureau of Economic Analysis, Washington, DC, 20230, USA.)

  • Stephen D Oliner

    (Division of Research and Statistics, Federal Reserve Board, Washington, DC, 20551, USA.)

  • Daniel E Sichel

    (Division of Research and Statistics, Federal Reserve Board, Washington, DC, 20551, USA.)

Abstract

This paper examines three questions motivated by previous research on semiconductors and productivity growth: Why did semiconductor prices fall so rapidly in the second half of the 1990s? Why has the rate of price decline slowed since 2001? And to what extent are these price swings associated with changes in the rate of advance in semiconductor technology? We show that the price swings are statistically significant and that they reflect changes in both price-cost markups and cost trends. Further analysis indicates that the shift to faster cost declines in the mid-1990s likely corresponded to a speed-up in the pace of advance in semiconductor technology. However, the slower cost declines since 2001 appear not to have been mirrored by a deceleration in technology. Consequently, researchers should be cautious about associating price or cost movements for semiconductors with changes in the pace of underlying technology even over moderately long periods.Business Economics (2008) 43, 23–39; doi:10.2145/20080303

Suggested Citation

  • Ana Aizcorbe & Stephen D Oliner & Daniel E Sichel, 2008. "Shifting Trends in Semiconductor Prices and the Pace of Technological Progress," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 43(3), pages 23-39, July.
    • Handle: RePEc:pal:buseco:v:43:y:2008:i:3:p:23-39
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    Cited by:

    1. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    2. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2018. "How Fast are Semiconductor Prices Falling?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 64(3), pages 679-702, September.
    3. Cette, G. & Clerc, C. & Bresson, L., 2015. "Diffusion et contribution à la croissance des TIC aux États-Unis, dans la zone euro et au Royaume-Uni," Bulletin de la Banque de France, Banque de France, issue 200, pages 83-90.
    4. Gilbert Cette & Jimmy Lopez & Giorgio Presidente & Vincenzo Spiezia, 2019. "Measuring ‘indirect’ investments in ICT in OECD countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(4), pages 348-364, May.
    5. Kenneth Flamm, 2019. "Measuring Moore’s Law: Evidence from Price, Cost, and Quality Indexes," NBER Chapters, in: Measuring and Accounting for Innovation in the Twenty-First Century, pages 403-470, National Bureau of Economic Research, Inc.
    6. repec:spo:wpmain:info:hdl:2441/2ajduu0gqt9ho8h2tavbin6ops is not listed on IDEAS
    7. Oliner, Stephen D. & Sichel, Daniel E. & Stiroh, Kevin J., 2008. "Explaining a productive decade," Journal of Policy Modeling, Elsevier, vol. 30(4), pages 633-673.
    8. Unni Pillai, 2013. "A Model of Technological Progress in the Microprocessor Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 61(4), pages 877-912, December.
    9. Davide Consoli & Francesco Vona & Francesco Rentocchini, 2016. "That was then, this is now: skills and routinization in the 2000s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(5), pages 847-866.
    10. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    11. Susan HOUSEMAN, 2007. "Outsourcing, offshoring and productivity measurement in United States manufacturing," International Labour Review, International Labour Organization, vol. 146(1-2), pages 61-80, March.
    12. Antipa, P. & Cette, G. & Frey, L. & Lecat, R. & Vigna, O., 2008. "Recent trends in productivity: structural acceleration in the euro area and deceleration in the United States?," Quarterly selection of articles - Bulletin de la Banque de France, Banque de France, issue 11, pages 33-50, Spring.
    13. repec:aei:rpaper:37301 is not listed on IDEAS
    14. Georg Graevenitz & Stefan Wagner & Dietmar Harhoff, 2013. "Incidence and Growth of Patent Thickets: The Impact of Technological Opportunities and Complexity," Journal of Industrial Economics, Wiley Blackwell, vol. 61(3), pages 521-563, September.
    15. Gilbert Cette, 2014. "Does ICT Remain a Powerful Engine of Growth," Post-Print hal-01463929, HAL.
    16. Gonzalo Castex & Evgenia Kogan Dechter, 2014. "The Changing Roles of Education and Ability in Wage Determination," Journal of Labor Economics, University of Chicago Press, vol. 32(4), pages 685-710.
    17. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2016. "Productivity Trends in Advanced Countries between 1890 and 2012," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 420-444, September.
    18. Gilbert Cette & Christian Clerc & Lea Bresson, 2015. "Contribution of ICT Diffusion to Labour Productivity Growth: The United States, Canada, the Eurozone, and the United Kingdom, 1970-2013," International Productivity Monitor, Centre for the Study of Living Standards, vol. 28, pages 81-88, Spring.
    19. David M. Byrne & Stephen D. Oliner & Daniel E. Sichel, 2013. "Is the Information Technology Revolution Over?," International Productivity Monitor, Centre for the Study of Living Standards, vol. 25, pages 20-36, Spring.
    20. Zoltan Csefalvay, 2019. "What are the policy options? A systematic review of policy responses to the impacts of robotisation and automation on the labour market," JRC Working Papers on Corporate R&D and Innovation 2019-02, Joint Research Centre.
    21. Susan Houseman, 2006. "Outsourcing, Offshoring, and Productivity Measurement in Manufacturing," Upjohn Working Papers 06-130, W.E. Upjohn Institute for Employment Research.
    22. repec:bfr:rueban:7 is not listed on IDEAS
    23. Neeraj Pandey & Nikhil Mehta & Shreya Basu Roy, 2017. "Semiconductor Pricing Strategy in USB Market: A Market Leader’s Dilemma," Business Perspectives and Research, , vol. 5(1), pages 1-10, January.
    24. Hao Tan & John A. Mathews, 2007. "Cyclical Dynamics in Three Industries," DRUID Working Papers 07-07, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.

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