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The Progress of Computing

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Abstract

The present study analyzes computer performance over the last century and a half. Three results stand out. First, there has been a phenomenal increase in computer power over the twentieth century. Performance in constant dollars or in terms of labor units has improved since 1900 by a factor in the order of 1 trillion to 5 trillion, which represent compound growth rates of over 30 percent per year for a century. Second, there were relatively small improvements in efficiency (perhaps a factor of ten) in the century before World War II. Around World War II, however, there was a substantial acceleration in productivity, and the growth in computer power from 1940 to 2001 has averaged 55 percent per year. Third, this study develops estimates of the growth in computer power relying on performance rather than on input-based measures typically used by official statistical agencies. The price declines using performance-based measures are markedly higher than those reported in the official statistics.

Suggested Citation

  • William D. Nordhaus, 2001. "The Progress of Computing," Cowles Foundation Discussion Papers 1324, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:1324
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    File URL: https://cowles.yale.edu/sites/default/files/files/pub/d13/d1324.pdf
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    Citations

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    Cited by:

    1. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The skill content of recent technological change: an empirical exploration," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    2. Bart van Ark & Robert Inklaar & Robert H. McGuckin, 2003. "ICT and Productivity in Europe and the United States Where Do the Differences Come From?," CESifo Economic Studies, CESifo, vol. 49(3), pages 295-318.
    3. Michaels, Guy, 2007. "The division of labor, coordination, and the demand for information processing," LSE Research Online Documents on Economics 3251, London School of Economics and Political Science, LSE Library.
    4. Alan D. Morrison, 2010. "Knowledge Codification, Institutions And Financial Markets," Manchester School, University of Manchester, vol. 78(s1), pages 1-24, September.
    5. Silverberg, Gerald & Verspagen, Bart, 2005. "A percolation model of innovation in complex technology spaces," Journal of Economic Dynamics and Control, Elsevier, vol. 29(1-2), pages 225-244, January.
    6. P. D. Chwelos & E. R. Berndt & I. M. Cockburn, 2008. "Faster, smaller, cheaper: an hedonic price analysis of PDAs," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2839-2856.
    7. 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.
    8. Doraszelski, Ulrich, 2004. "Innovations, improvements, and the optimal adoption of new technologies," Journal of Economic Dynamics and Control, Elsevier, vol. 28(7), pages 1461-1480, April.
    9. Morrison, Alan & Wilhelm Jr, William J, 2005. "The Demise of Investment Banking Partnerships: Theory and Evidence," CEPR Discussion Papers 4904, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Productivity; hedonic pricing; history of computing;
    All these keywords.

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N1 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations

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