>1%? Meaning that an extra 1% per year aggregate total factor
>productivity growth from computer manufacture implies that computer
>manufacturing total factor productivity is doubling every year?
>Has the "New Economy"
>Rendered the Productivity Slowdown Obsolete?
>
>Robert J. Gordon
>
>Northwestern University
>and
>National Bureau of Economic Research
>
>Revised Version, June 14 1999.
>Abstract
>
>
>When the period since 1995:4 is compared to 1950-72 and 1972-95,
>growth in output per hour in the most recent (third) period has
>recovered more than two-thirds of the productivity growth slowdown
>registered between the first and second periods. This paper shows
>that all of this productivity rebound can be explained by three
>factors, (1) improved methods for measuring price deflators, (2) the
>normal procyclical response of productivity in periods like 1997-99
>when output grows faster than trend, and (3) the explosion of output
>and productivity growth in durable goods, entirely due to the
>production of computers.
>
>
>There has been no productivity growth acceleration in the 99 percent
>of the economy located outside the sector which manufactures
>computer hardware, beyond that which can be explained by price
>remeasurement and by a normal (and modest) procyclical response.
>Indeed, far from exhibiting a productivity acceleration, the
>productivity slowdown in manufacturing has gotten worse; when
>computers are stripped out of the durable manufacturing sector,
>there has been a further productivity slowdown in durable
>manufacturing in 1995-99 as compared to 1972- 95, and no
>acceleration at all in nondurable manufacturing.
>
>
>However, taking account of the productivity explosion in computers,
>the paper arrives at relatively optimistic estimates of growth in
>potential GDP and benign implications for the misnamed Social
>Security "crisis."
Full paper at <http://faculty-web.at.nwu.edu/economics/gordon/334.pdf>.
Doug