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Information-Processing Equipment and Software in the National Accounts

In: Measuring Capital in the New Economy

  • Bruce T. Grimm
  • Brent R. Moulton
  • David B. Wasshausen

In the U.S. national income and product accounts (NIPA's), most of the types of goods in the investment category "information processing (IP) equipment and software" have experienced rapidly changing technology and are thus candidates for inclusion in the new economy. The NIPA price indexes for computers and peripheral equipment, computer software, and communication equipment all, at least in part, include quality adjustments based on hedonic studies. In addition, anecdotal evidence strongly indicates that instruments have also have undergone substantial quality improvements, although no hedonic quality adjustments are currently being made to their prices. Together, these goods make up more than nine-tenths of the category. There is also some evidence that there have been substantial quality improvements for the remaining two types of goods in the category, photocopy and related equipment and office and accounting equipment. In order to facilitate research leading to improved measurement of information technology, this paper discusses the relationship between private fixed investment in IP equipment and software and GDP, explains how the current- and constant-dollar estimates are prepared, and finally assess recent progress in measurement and plans for improvement.

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This chapter was published in:
  • Carol Corrado & John Haltiwanger & Dan Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1, October.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 10626.
    Handle: RePEc:nbr:nberch:10626
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
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    1. Elhanan Helpman & Marc J. Melitz & Stephen R. Yeaple, 2003. "Export versus FDI," Harvard Institute of Economic Research Working Papers 1998, Harvard - Institute of Economic Research.
    2. Robert E. Lipsey & Zadia Feliciano, 2002. "Foreign Entry into U.S. Manufacturing by Takeovers and the Creation of New Firms," NBER Working Papers 9122, National Bureau of Economic Research, Inc.
    3. William D. Nordhaus, 2001. "Productivity Growth and the New Economy," NBER Working Papers 8096, National Bureau of Economic Research, Inc.
    4. 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.
    5. Stephen Ross Yeaple, 2003. "The Role of Skill Endowments in the Structure of U.S. Outward Foreign Direct Investment," The Review of Economics and Statistics, MIT Press, vol. 85(3), pages 726-734, August.
    6. Brainard, S Lael, 1997. "An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade," American Economic Review, American Economic Association, vol. 87(4), pages 520-44, September.
    7. Ellen Dulberger, 1993. "Sources of Price Decline in Computer Processors : Selected Electronic Components," NBER Chapters, in: Price Measurements and Their Uses, pages 103-124 National Bureau of Economic Research, Inc.
    8. Michael P. Keane & Susan E. Feinberg, 2006. "Accounting for the Growth of MNC-Based Trade Using a Structural Model of U.S. MNCs," American Economic Review, American Economic Association, vol. 96(5), pages 1515-1558, December.
    9. Mihir A. Desai & C. Fritz Foley & James R. Hines Jr., 2002. "International Joint Ventures and the Boundaries of the Firm," NBER Working Papers 9115, National Bureau of Economic Research, Inc.
    10. Erik Brynjolfsson & Chris F. Kemerer, 1993. "Network Externalities in Microcomputer Software: An Econometric Analysis of the Spreadsheet Market," Working Paper Series 158, MIT Center for Coordination Science.
    11. Neil Gandal, 1994. "Hedonic Price Indexes for Spreadsheets and an Empirical Test for Network Externalities," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 160-170, Spring.
    12. Brent R. Moulton, 2001. "The Expanding Role of Hedonic Methods in the Official Statistics of the United States," BEA Papers 0018, Bureau of Economic Analysis.
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