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Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries

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  • Catherine J. Morrison
  • Ernst R. Berndt

Abstract

In this paper we report results of an empirical assessment of the cost reducing impacts of recent dramatic increases in stocks of "high-tech" office and information technology equipment (0) using annual data from various two digit US manufacturing industries over the 1952-1986 time period. While there are exceptions, on balance we find that in 1986, estimated marginal benefits of investments in this 0 equipment are less than marginal costs, implying over investment in 0 capital in 1986. The sign of the estimated elasticity of demand for labor with respect to changes in the stock of 0 capital is evenly divided in the fourteen industries, but whether positive or negative, in all industries this elasticity increases in absolute magnitude over time, indicating ever greater impacts of 0 capital on the demand for aggregate labor. Finally, our estimates of the elasticity of technical progress with respect to 0-capital are very small in magnitude implying that increases in o capital have only a small impact on technical progress.

Suggested Citation

  • Catherine J. Morrison & Ernst R. Berndt, 1991. "Assessing the Productivity of Information Technology Equipment in U.S. Manufacturing Industries," NBER Working Papers 3582, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:3582
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    1. Paul Osterman, 1986. "The Impact of Computers on the Employment of Clerks and Managers," ILR Review, Cornell University, ILR School, vol. 39(2), pages 175-186, January.
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    7. Catherine J. Morrison, 1989. "Unraveling the Productivity Growth Slowdown in the U.S., Canada and Japan: The Effects of Subequilibrium, Scale Economies and Markup," NBER Working Papers 2993, National Bureau of Economic Research, Inc.
    8. Pindyck, Robert S & Rotemberg, Julio J, 1983. "Dynamic Factor Demands and the Effects of Energy Price Shocks," American Economic Review, American Economic Association, vol. 73(5), pages 1066-1079, December.
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