BY: WILLIAM D. NORDHAUS
Yale University
Department of Economics
Document: Available from the SSRN Electronic Paper Collection:
http://papers.ssrn.com/paper.taf?abstract_id=285168
Paper ID: Cowles Foundation Discussion Paper No. 1324
Date: September 2001
Contact: WILLIAM D. NORDHAUS
Email: Mailto:william.nordhaus at yale.edu
Postal: Yale University
Department of Economics
New Haven, CT 06520 USA
Paper Requests:
Recent papers downloadable from SSRN and Cowles Foundation.
Contact Art Trager, Mailto:art.trager at yale.edu for older papers.
No Charge for first 3 items, additional items must be prepaid
at: $3.00 each US, $4.00 each International.
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.
Keywords: Productivity, Hedonic Pricing, History of Computing