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

Listed author(s):
  • Catherine J. Morrison
  • Ernst R. Berndt

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.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3582.

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Date of creation: Jan 1991
Publication status: Published as "Productive and Financial Performance in U.S. Manufacturing Industries: An Integrated Structural Approach", SEJ, Vol. 60, no. 2(1993): 376-392.
Handle: RePEc:nbr:nberwo:3582
Note: PR
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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.
  2. Martin Neil Baily & Robert J. Gordon, 1988. "The Productivity Slowdown, Measurement Issues, and the Explosion of Computer Power," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 19(2), pages 347-432.
  3. Dudley, Leonard & Lasserre, Pierre, 1989. "Information as a substitute for inventories," European Economic Review, Elsevier, vol. 33(1), pages 67-88, January.
  4. Lester C. Thurow, 1987. "Economic Paradigms and Slow American Productivity Growth," Eastern Economic Journal, Eastern Economic Association, vol. 13(4), pages 333-343, Oct-Dec.
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