Measuring and Sustaining the New Economy Report of a Workshop (2002) / Chapter Skim
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A. Raising the Speed Limit: U.S. Economic Growth in the Information Age
A. Raising the Speed Limit: U.S. Economic Growth in the Information Age
Pages 137-222
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From page 137... ...
Relative to the early l990s, output growth has accelerated by nearly two percentage points. We attribute this to rapid capital accumulation, a surge in hours worked, and faster growth of total factor productivity.
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From page 138... ...
Rapid declines in the prices of computers and semi-conductors are well known and carefully documented, and evidence is accumulating that similar declines are taking place in the prices of software and communications equipment. Unfortunately, the empirical record is seriously incomplete, so much remains to be done before definitive quantitative assessments can be made about the complete role of these high-tech assets.
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From page 139... ...
growth contributed an additional 0.63 percentage points, largely reflecting technical change in the production of computers and the resulting acceleration in the price decline of computers. Slowing labor quality growth retarded ALP growth by 0.12 percentage points, relative to the early l990s, a result of exhaustion of the pool of available workers.
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From page 140... ...
For some purposes, the distinctions among capital accumulation and growth in labor quality and TFP may not matter, so long as ALP growth can be expected to continue. It is sustainable labor productivity gains, after all, that ultimately drive long-run growth and raise living standards.
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From page 141... ...
GROWTH EXPERIENCE The U.S. economy has undergone a remarkable transformation in recent years with growth in output, labor productivity, and total factor productivity all accelerating since the mid-199Os.
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From page 142... ...
These outputs are produced from aggregate input A, consisting of capital services Kit and labor services Lo. We represent productivity as a "Hicks-neutral" augmentation At of aggregate input:9 (1)
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From page 143... ...
The second term is the improvement in labor quality, defined as the difference between growth rates of labor input and hours worked. Reflecting the rising proportion of hours supplied by workers with higher marginal products, labor quality improvement raises ALP growth in proportion to labor' s share.
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From page 144... ...
If the contributions to output are captured by the effect of capital deepening, aggregate TFP growth is unaffected. As Baily and Gordon (1988)
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From page 145... ...
(c) Capital Stock and Capital Services This section describes our capital estimates for the U.S.
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From page 146... ...
We now move to estimates of capital services flows, where capital stocks of individual assets are aggregated using rental prices as weights. Appendix Table i5Jorgenson (1996)
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From page 147... ...
In 1998 capital services are only 12.4% of capital stocks for tangible assets as a whole, but services are 40.0% of stocks for information technology. This reflects the rapid price declines and high depreciation rates that enter into the rental prices for information technology.
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From page 148... ...
This could lead to an underestimate of the rate of growth in communications equipment investment, capital stock, and capital services, as well as an overestimate of the rate of inflation.20 We return to this issue at the end of Section II.
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From page 149... ...
This slowdown captures well-known underlying demographic trends in the composition of the work force, as well as exhaustion of the pool of available workers as unemployment rates have steadily declined. Projections of future economic growth that omit labor quality, like those of CBO discussed in Section III, implicitly incorporate changes in labor quality into measured TFP growth.
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From page 150... ...
Broadly defined capital services make the largest growth contribution of 1.8 percentage point (1.3 percentage points from business capital and 0.5 from consumers' durable assets) , labor services contribute 1.2 percentage points, and TFP growth is responsible for only 0.6 percentage points.
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From page 151... ...
economy slowed markedly through 1990, with output growth falling from 4.3% to 3.1% and TFP growth falling almost two-thirds of a percentage point from 1.0% to 0.3%. Growth in capital inputs also slowed, falling from 5.0% for 1959-73 to 3.8% for 1973-90, which contributed to sluggish ALP growth, 2.9% for 1959-73 to 1.4% for 1973-90.
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From page 152... ...
While software is growing more slowly than computers, the substantial nominal share of software services has raised the contribution of information technology. Second, we have added communications equipment, also a slower growing component of capital services, with similar effects.
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From page 153... ...
The slowdown through 1990 reflects less capital deepening, declining labor quality growth, and decelerating growth in TFP. The growth of ALP slipped further during the early l990s with the serious slump in capital deepening only partly offset by a revival in the growth of labor quality and an up-tick in TFP growth.
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From page 154... ...
As we have already pointed out, more efficient IT-production generates aggregate TFP growth as more computing power is produced from the same inputs, while IT-use affects ALP growth via capital deepening. In recent years, acceleration of TFP growth is a slightly more important factor in the acceleration of ALP growth than capital deepening.
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From page 155... ...
Two additional cases, Moderate Price Decline and Rapid Price Decline, incorporate price series for software and communications equipment that show faster price declines and correspondingly more rapid real investment growth.30 The Moderate Price Decline case assumes that prepackaged software prices are appropriate for all types of private software investment, including custom and business own-account software. Since the index for prepackaged software is based on explicit quality adjustments, it falls much faster than the prices of custom and own-account software, -10.1% vs.
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From page 156... ...
The counter-balancing effects of increased output and increased input growth lead to an indirect effect on measured TFP growth. Depending on the relative shares of high-tech assets in investment and capital services, the TFP residual will increase if the output effect dominates or decrease if the effect on capital services dominates.3i Following Solow (1957, 1960)
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From page 157... ...
Using the Domar approach to aggregation, industrylevel productivity growth is weighted by the ratio of the gross output of each industry to aggregate value-added to estimate the industry contribution to aggregate TFP growth. In the dual approach, the rate of productivity growth is measured as the decline in the price of output, plus a weighted average of the growth rates of input prices.
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From page 158... ...
This boosts the contribution of information technology to TFP growth to 0.64 percentage points, an increase of 0.20 percentage points for 1995-98. Proceeding to what may appear to be the outer limit of plausibility, but still consistent with the available evidence, we can consider the case of Rapid Price Decline.
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From page 159... ...
, and CEA (2000) on the other hand, employ a simplified relationship where output growth equals the sum of growth in hours worked and labor productivity.
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From page 160... ...
TFP growth is projected on the basis of recent historical trends, with labor quality growth implicitly included in CBO's estimate of TFP growth. 36The five sectors nonfarm business, farm, government, residential housing, and households and nonprofit institutions follow the breakdown in Table 1.7 of the NIPA.
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From page 161... ...
, slightly more rapid growth in hours (0.1 %) , and faster TFP growth, reflecting the benchmark revisions of NIPA, and other technical changes (0.2%~.39 CBO's estimates for the non-farm business sector show strong potential output growth of 3.5% for 1999-2010.
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From page 162... ...
This reflects the inclusion of relatively fast-growing software investment in the benchmark revision of NIPA, but also extrapolates recent investment patterns. Similarly, CBO has raised its projected rate of TFP growth in successive estimates from 1.0% in January 1999 to 1.1% in July 1999 to 1.4% in January 2000.4° These upward revisions reflect methodological changes in how CBO accounts for the rapid price declines in investment, particularly computers, which added 0.2%.
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From page 163... ...
We conclude that CBO's projection of TFP growth is optimistic in assuming a continuation of recent productivity trends, but nonetheless reasonable. However, we reduce this projection by only 0.18 percent per year to reflect the decline in labor quality growth, resulting in projected TFP growth of 1.22% per year.
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From page 164... ...
This is the sum of the projected growth of TFP of 1.22% per year, the contribution of labor input of 1.06% per year, and the contribution of capital input of 1.07% per year. This is a very modest reduction in output growth from CBO's projection of 3.5% per year and can be attributed to the omission of a projected decline in labor quality growth.
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From page 165... ...
He showed that aggregate TFP growth can be expressed as a weighted average of industry productivity growth: 43This is analogous to the sectoral output concept used by BLS. See Gullickson and Harper (1999)
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From page 166... ...
This weighting methodology implies that economy-wide TFP growth can grow faster than productivity in any industry, since productivity gains are magnified as they work their way through the production process.45 In addition to providing an internally consistent aggregation framework, industry-level gross output allows an explicit role for intermediate goods as a source of industry growth. For example, Triplett (1996)
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From page 167... ...
As a consequence, they are not directly comparable to the aggregate data described in Tables 1 through 6. Since the impact of the benchmark revision was to raise output and aggregate TFP growth, it is not surprising that the industry data show slower output and productivity growth.
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From page 168... ...
Semi-conductors, on the other hand, do not appear at the aggregate level, since they are sold almost entirely as an input to computers, telecommunications equipment, and an increasingly broad range of other products such as machine tools, automobiles, and virtually all recent vintages of appliances. Nonetheless, improved semiconductor production is an important source of aggregate TFP growth since it is ultimately responsible for the lower prices and improved quality of goods like computers produced for final demand.
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From page 169... ...
This reflects an underlying relationship similar to Equation (3) for the aggregate data, where industry ALP growth reflects industry productivity growth, labor quality growth, and increases in input intensity, including increases in capital as well as intermediate inputs per hour worked.
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From page 170... ...
report estimates of ALP growth for selected one- and two-digit SIC industries for the period 1977-97. Gullickson and Harper (1999)
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From page 171... ...
Methodological differences, such as the inclusion of labor quality growth in our estimates of labor input growth, contribute to this divergence, as do different methods for linking data sets. Neither Corrado and Slifman (1999)
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From page 172... ...
presents a similar decomposition for ALP growth, although he focuses exclusively on the contribution from computer production. We present our estimates of each industry's contribution to aggregate TFP growth for the period 1958-96 in Chart 11.
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From page 173... ...
While we cannot comment directly on his empirical estimates since our industry data end in 1996 and we examine TFP growth rather than ALP growth, we can point to an important qualification to his argument.
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From page 174... ...
These gains are driving down relative prices of computers, software, and communications equipment and inducing massive investments in these assets by firms and households. Technological progress and the induced capital deepening are the primary factors behind accelerating output growth in recent years.
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From page 175... ...
In fact, Gordon identified computers and communications equipment as two assets with the largest overstatements, together with aircraft, which we have not included.57 Much remains to be done to complete Gordon's program of implementing constant-quality price deflators for all components of investment in NIPA. The second priority for research is to decompose the sources of economic growth to the industry level.
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From page 176... ...
Productivity growth in the production of information technology is responsible for a sizable part of the recent spurt in TFP growth and can be identified with price declines in high-tech assets and semi-conductors. This has induced an eruption of investment in these assets that is responsible for capital deepening in the industries that use information technology.
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From page 177... ...
For individual assets: Iit = quantity of investment in asset i at time t Pit = price of investment in asset i at time t hi = geometric depreciation rate for asset i Sit = quantity of capital stock of asset i at time t Pit = price of capital stock of asset i at time t Kit = quantity of capital services from asset i at time t cit = price of capital services from asset i at time t where the i subscript refers to different types of tangible assets equipment and structures, as well as consumers' durable assets, inventories, and land, all for time period t. For economy-wide aggregates: It = quantity index of aggregate investment at time t PI ~ = price index of aggregate investment at time t So = quantity index of aggregate capital stock at time t Ps ~ = price index of aggregate capital stock at time t Kit = quantity index of aggregate capital services at time t car = price of capital services at time t qK ~ = quality index of aggregate capital services at time t Our starting point is investment in individual assets.
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From page 178... ...
Moreover, since Sit is measured in base-year efficiency units, the appropriate price for valuing the capital stock is simply the investment price deflator, Pit. Furthermore, Sit represents the installed stock of capital, but we are interested in Kit, the flow of capital services from that stock over a given period.
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From page 179... ...
Empirically, asset-specific revaluation terms can be problematic due to wide fluctuations in prices from period to period that can result in negative rental prices. However, asset-specific revaluation terms are becoming increasingly important as prices continue to decline for high-tech assets.
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From page 180... ...
lift = 2 | ~ Ci t Ki t ~ ci,t_l Ki,t_ i i and the price index of aggregate capital services is defined as: (B-9) ct= ~ Ci,tKi,t i Kt Similarly, the quantity index of capital stock is given by: (B-10)
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From page 181... ...
First, the weights are different. The index of aggregate capital services uses rental prices as weights, while the index of aggregate capital stock uses investment prices.
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From page 182... ...
defines growth in capital quality as the difference between the growth in capital services and the growth in average capital stock. This difference reflects substitution towards assets with relatively high rental price weights and high marginal products.
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For each asset, we created a real investment series by linking the historical cost investment and the quantity index in the base-year 1996. Capital stocks were then estimated using the perpetual inventory method in Equation (B-1)
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From page 184... ...
APPENDIX C - ESTIMATING LABOR INPUT i) Labor Input Methodology We again begin with some notation for measures of hours worked, labor inputs, and labor quality for worker categories: Hj ~ = quantity of hours worked by worker category j at time t w; ~ = price of an hour worked by worker category j at time t
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From page 185... ...
- 1 | i and the price of aggregate labor input is defined as: wj t_lLj,twj,t_lLj,ti ~ Wj,tLj,t (C - 4) PL, t Lt We define the "aggregate index of labor quality", qL P qL t =L/Ht, where Ht is the unweighted sum of labor hours: (C-5)
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From page 186... ...
This allows us to estimate the quality of labor input for the private business sector, general government, and government enterprises, where only the private business sector index is used in the aggregate growth accounting results. For the years 1996-98, we estimate labor quality growth by holding relative wages across labor types constant, and incorporating demographic projections for the labor force.
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From page 187... ...
Output in these sectors is defined via a Tornqvist index of capital and labor inputs, so productivity growth is zero by definition. 65BEA includes a similar imputation for the flow of government capital services in the national accounts, but our methodology includes a return to capital, as well as depreciation as estimated by BEA.
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From page 188... ...
Output growth was estimated from growth in BLS business output and BEA GDP, with adjustment made for different output concepts. Finally, TFP growth for 1999 was estimated as the difference in the estimated output growth and share-weighted input growth.
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From page 189... ...
Hodge, "Quality-Adjusted Price Indexes for Computer Processors and Selected Peripheral Equipment," Survey of Current Business, Vol.
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From page 190... ...
Stiroh, "U.S. High-Tech Investment and the Pervasive Slowdown in the Growth of Capital Services," Mimeo, Harvard University.
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From page 191... ...
and Sichel, Daniel E., "Computers and Output Growth Revisited: How Big Is the Puzzle? " Brookings Papers on Economic Activity 2, 1994, 273-334.
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192 .= oo Cal _.
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From page 193... ...
193 to o Cq an C)
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194 oo 3 ¢ o Cq an VO at Em ¢ Ed on A to oo = Ct oo ~ ~ ~ ~ oo o o o ~ ~ ~ o oo .
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From page 196... ...
1.01 0.33 0.36 0.99 0.94 Growth of Capital and CD Services 4.99 3.85 2.85 4.94 5.24 Growth of Labor Input 2.14 2.04 2.01 2.81 2.14 Contribution of Capital and CD Quality 0.40 0.41 0.43 0.95 0.48 Contribution of Capital and CD Stock 1.66 1.22 0.77 1.23 1.68 Contribution of Labor Quality 0.45 0.20 0.37 0.25 0.45 Contribution of Labor Hours 0.80 0.97 0.81 1.32 0.80 Average Labor Productivity (ALP) 2.95 1.44 1.37 2.37 2.98 Notes: Base Case uses official NIPA price data.
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From page 197... ...
APPENDIX A ations 197 Moderate Price Decline 1995-98 1959-73 1973-90 Rapid Price Decline 1990-95 1995-98 1959-73 1973-90 1990-95 1995-98 4.73 3.66 0.17 0.39 0.21 0.12 0.19 1.61 0.86 0.46 0.19 0.10 0.56 0.37 0.19 1.57 0.99 4.94 2.81 0.95 1.23 0.25 1.32 2.37 4.35 0.00 0.07 0.04 0.12 0.00 1.54 1.25 0.09 0.05 0.16 0.63 0.63 0.00 1.25 0.94 5.24 2.14 0.48 1.68 0.45 0.80 2.98 3.30 2.76 0.02 0.16 0.14 0.19 0.02 1.39 0.80 0.20 0.15 0.25 0.46 0.44 0.02 1.17 0.27 4.40 2.04 0.59 1.26 0.20 0.97 1.61 2.90 2.17 0.09 0.20 0.22 0.13 0.09 1.15 0.51 0.19 0.28 0.18 0.29 0.20 0.09 1.18 0.27 3.43 2.01 0.63 0.82 0.37 0.81 1.52 4.89 3.66 0.17 0.39 0.29 0.21 0.19 1.83 0.86 0.46 0.29 0.23 0.56 0.37 0.19 1.57 0.93 5.44 2.81 1.11 1.28 0.25 1.32 2.53 4.36 4.08 0.00 0.07 0.05 0.16 0.00 1.61 1.25 0.09 0.06 0.22 0.63 0.63 0.00 1.25 0.88 5.41 2.14 0.54 1.69 0.45 0.80 2.99 3.38 2.75 0.02 0.16 0.17 0.25 0.02 1.51 0.79 0.20 0.18 0.34 0.46 0.44 0.02 1.18 0.22 4.70 2.04 0.70 1.27 0.20 0.98 1.69 3.03 2.16 0.09 0.20 0.29 0.19 0.09 1.32 0.51 0.19 0.36 0.27 0.29 0.20 0.09 1.18 0.23 3.84 2.01 0.78 0.84 0.37 0.81 1.65 5.07 3.66 0.17 0.39 0.40 0.27 0.19 2.09 0.85 0.46 0.45 0.33 0.56 0.37 0.19 1.57 0.85 6.02 2.81 1.34 1.31 0.25 1.32 2.72
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From page 198... ...
198 Do l of Cq an Cq o as as .~ as ¢ sly do 3 EN o o := o o A be o A EN o .
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From page 200... ...
Hours worked for CBO Overall Economy refers to potential labor force.
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From page 201... ...
APPENDIX A ity: 201 CBO Nonfat Business Jorgenson-Stiroh 1999-2010 1980-90 1990-99 1999-2010 1980-90 1990-98 3.1 3.2 3.4 3.5 3.48 3.55 2.14 2.34 1.1 1.6 1.5 1.2 1.81 1.76 0.33 0.58 3.6 3.6 4.4 3.57 3.68 0.9 1.2 1.4 0.91 0.97 0.73 0.63 1.5 1.9 2.3 1.67 1.79
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From page 202... ...
202 MEASURING AND SUSTAINING THE NEW ECONOMY TABLE 7 1996 Value-Added and Gross Output by Industry SIC Value- Gross Industry Codes Added Output Agriculture 01-02, 07-09 133.3 292.2 Metal Mining 10 8.8 10.7 Coal Mining 11-12 14.7 21.1 Petroleum and Gas 13 57.4 83.3 Nonmetallic Mining 14 10.5 17.0 Construction 15-17 336.0 685.5 Food Products 20 147.2 447.6 Tobacco Products 21 26.7 32.7 Textile Mill Products 22 19.9 58.9 Apparel and Textiles 23 40.7 98.5 Lumber and Wood 24 34.2 106.7 Furniture and Fixtures 25 23.4 54.5 Paper Products 26 68.3 161.0 Printing and Publishing 27 113.5 195.6 Chemical Products 28 184.0 371.2 Petroleum Refining 29 44.7 184.3 Rubber and Plastic 30 64.1 148.9 Leather Products 31 3.4 8.1 Stone, Clay, and Glass 32 40.4 79.1 Primary Metals 33 57.6 182.1 Fabricated Metals 34 98.4 208.8 Industrial Machinery and Equipment 35 177.8 370.5 Electronic and Electric Equipment 36 161.9 320.4 Motor Vehicles 371 84.9 341.6 Other Transportation Equipment 372-379 68.0 143.8 Instruments 38 81.3 150.0 Miscellaneous Manufacturing 39 24.8 49.3 Transport end warehouse 40-47 258.6 487.7 Communications 48 189.7 315.8 Electric Utilities 491, 493 111.8 186.7 Gas Utilities 492, 493, 496 32.9 57.9 Trade 50-59 1,201.2 1,606.4 FIRE 60-67 857.8 1,405.1 Services 70-87, 494-495 1,551.9 2,542.8 Goverment Enterprises 95.2 220.2 Private Households 88 1,248.4 1,248.4 General Government 1,028.1 1,028.1 Note: All values are in current dollars. Value-added refers to payments to capital and labor; Gross output includes payments for intermediate inputs.
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From page 204... ...
204 ~o ~ ~ 3 ¢ ~ ;^ ·= ~ ~ ~, oo _d 3 s°C)
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205 ~ ~ o ~ oo o ~ ~ ~ ~ ~ ~ ~ o o o o o o o o .
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From page 206... ...
206 MEASURING AND SUSTAINING THE NEW ECONOMY TABLE A-1 Private Domestic Output and High-Tech Assets Private Domestic Computer Software Communist Output Investment Investment Investmen Year Value Price Value Price Value Price Value 1959 484.1 0.25 0.00 0.00 0.00 0.00 1.80 1960 472.8 0.24 0.20 697.30 0.10 0.61 2.30 1961 490.1 0.24 0.30 522.97 0.20 0.62 2.70 1962 527.1 0.25 0.30 369.16 0.20 0.63 3.00 1963 562.1 0.25 0.70 276.29 0.40 0.63 2.90 1964 606.4 0.26 0.90 229.60 0.50 0.64 3.00 1965 664.2 0.26 1.20 188.74 0.70 0.65 3.50 1966 728.9 0.27 1.70 132.70 1.00 0.66 4.00 1967 763.1 0.28 1.90 107.71 1.20 0.67 4.20 1968 811.0 0.28 1.90 92.00 1.30 0.68 4.70 1969 877.7 0.29 2.40 83.26 1.80 0.70 5.80 1970 937.9 0.31 2.70 74.81 2.30 0.73 6.70 1971 991.5 0.32 2.80 56.98 2.40 0.73 6.80 1972 1,102.9 0.33 3.50 45.93 2.80 0.73 6.80 1973 1,255.0 0.36 3.50 43.53 3.20 0.75 8.40 1974 1,345.9 0.38 3.90 35.55 3.90 0.80 9.40 1975 1,472.7 0.42 3.60 32.89 4.80 0.85 9.70 1976 1,643.0 0.44 4.40 27.47 5.20 0.87 11.10 1977 1,828.1 0.47 5.70 23.90 5.50 0.89 14.40 1978 2,080.4 0.50 7.60 16.17 6.60 0.90 17.70 1979 2,377.8 0.56 10.20 13.40 8.70 0.95 21.40 1980 2,525.9 0.59 12.50 10.46 10.70 1.01 25.70 1981 2,825.6 0.65 17.10 9.19 12.90 1.07 29.00 1982 2,953.5 0.69 18.90 8.22 15.40 1.12 31.10 1983 3,207.7 0.72 23.90 6.86 18.00 1.13 31.90 1984 3,610.3 0.75 31.60 5.55 22.10 1.14 36.60 1985 3,844.1 0.76 33.70 4.72 25.60 1.13 39.90 1986 3,967.4 0.76 33.40 4.06 27.80 1.12 42.10 1987 4,310.8 0.79 35.80 3.46 31.40 1.12 42.10 1988 4,766.1 0.84 38.00 3.21 36.70 1.14 46.70 1989 5,070.5 0.86 43.10 3.00 44.40 1.11 46.90 1990 5,346.8 0.89 38.60 2.72 50.20 1.09 47.50 1991 5,427.2 0.91 37.70 2.45 56.60 1.10 45.70 1992 5,672.4 0.92 43.60 2.09 60.80 1.04 47.80 1993 5,901.8 0.93 47.20 1.78 69.40 1.04 48.20 1994 6,374.4 0.96 51.30 1.57 75.50 1.02 54.70 1995 6,674.4 0.97 64.60 1.31 83.50 1.02 60.00 1996 7,161.2 1.00 70.90 1.00 95.10 1.00 65.60 1997 7,701.8 1.02 76.70 0.78 106.60 0.97 73.00 1998 8,013.3 1.01 88.51 0.57 123.41 0.96 83.60 Notes: Values are in billions of current dollars. All price indexes are normalized to 1.0 in 1996.
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From page 207... ...
APPENDIX A 207 Computer & Software Consumption Value Computer & Software Consumption Services Value Price Communications Investment Price Value Price Price 0.00 0.61 0.62 0.63 0.63 0.64 0.65 0.66 0.67 0.68 0.70 0.73 0.73 0.73 0.75 0.80 0.85 0.87 0.89 0.90 0.95 1.01 1.07 1.12 1.13 1.14 1.13 1.12 1.12 1.14 1.11 1.09 1.10 1.04 1.04 1.02 1.02 1.00 0.97 0.96 1.80 2.30 2.70 3.00 2.90 3.00 3.50 4.00 4.20 4.70 5.80 6.70 6.80 6.80 8.40 9.40 9.70 11.10 14.40 17.70 21.40 25.70 29.00 31.10 31.90 36.60 39.90 42.10 42.10 46.70 46.90 47.50 45.70 47.80 48.20 54.70 60.00 65.60 73.00 83.60 0.47 0.47 0.47 0.46 0.46 0.47 0.47 0.47 0.49 0.51 0.54 0.57 0.60 0.62 0.64 0.69 0.76 0.80 0.78 0.81 0.83 0.88 0.96 1.01 1.03 1.07 1.09 1.10 1.10 1.10 1.10 1.11 1.11 1.10 1.09 1.07 1.03 1.00 0.99 0.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.10 0.10 0.20 0.40 1.40 2.90 3.00 2.90 5.20 6.20 8.20 8.30 8.90 11.90 12.10 14.50 18.00 21.00 23.60 26.20 30.40 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 33.68 32.81 22.11 18.79 15.12 10.71 9.41 8.68 6.54 5.91 5.41 5.02 4.22 3.53 2.68 2.07 1.81 1.44 1.00 0.69 0.48 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.02 0.07 0.20 0.25 0.74 2.07 2.37 2.70 4.84 4.91 6.65 7.89 10.46 11.66 14.96 16.26 16.14 22.64 30.19 33.68 36.53 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 17.84 19.01 25.93 13.90 11.96 10.39 6.07 4.93 5.61 3.54 3.24 2.85 2.97 2.44 2.25 1.71 1.17 1.13 1.00 0.71 0.48 ~ 1996.
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From page 208... ...
0.1350 30.9 172.6 Photocopy and related equipment 0.1800 22.6 103.0 Other nonresidential equipment 0.1473 35.4 184.3 Other office equipment 0.3119 8.4 24.5 Software 0.3150 123.4 302.4 Non-Residential Structures 2,271.3 5,430.6 Industrial buildings 0.0314 36.4 766.6 Mobile structures (offices) 0.0556 0.9 9.8 Office buildings 0.0247 44.3 829.8 Commercial warehouses 0.0222 0.0 0.0 Other commercial buildings, n.e.c.
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From page 209... ...
Note: Values of investment and capital stock is in millions of current dollars. Equipment and Software and Other nonresidential equipment includes NIPA residential equipment.
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From page 210... ...
, land, and inventories. All price indexes are normalized to 1.0 in 1996.
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From page 211... ...
APPENDIX A 211 Software Communications Computer and Software Capital Stock Capital Stock CD Stock Value Price Value Price Value Price 0.00 0.00 9.97 0.47 0.00 0.00 0.10 0.61 11.11 0.47 0.00 0.00 0.27 0.62 12.53 0.47 0.00 0.00 0.39 0.63 14.06 0.46 0.00 0.00 0.67 0.63 15.50 0.46 0.00 0.00 0.97 0.64 16.99 0.47 0.00 0.00 1.37 0.65 18.56 0.47 0.00 0.00 1.95 0.66 20.69 0.47 0.00 0.00 2.55 0.67 23.21 0.49 0.00 0.00 3.09 0.68 26.38 0.51 0.00 0.00 3.98 0.70 30.57 0.54 0.00 0.00 5.12 0.73 35.16 0.57 0.00 0.00 5.91 0.73 39.66 0.60 0.00 0.00 6.86 0.73 43.77 0.62 0.00 0.00 8.04 0.75 48.30 0.64 0.00 0.00 9.77 0.80 55.98 0.69 0.00 0.00 11.89 0.85 64.49 0.76 0.00 0.00 13.52 0.87 71.56 0.80 0.00 0.00 15.01 0.89 76.27 0.78 0.00 0.00 17.00 0.90 88.54 0.81 0.10 33.68 21.01 0.95 101.62 0.83 0.17 32.81 25.93 1.01 122.33 0.88 0.28 22.11 31.72 1.07 146.61 0.96 0.56 18.79 38.14 1.12 168.74 1.01 1.71 15.12 44.40 1.13 185.59 1.03 3.73 10.71 52.68 1.14 207.81 1.07 5.25 9.41 61.66 1.13 228.43 1.09 6.21 8.68 69.38 1.12 246.93 1.10 8.41 6.54 79.17 1.12 262.59 1.10 11.40 5.91 91.54 1.14 280.64 1.10 15.35 5.41 105.64 1.11 297.05 1.10 18.06 5.02 121.57 1.09 311.95 1.11 19.30 4.22 140.37 1.10 324.37 1.11 22.97 3.53 151.41 1.04 334.48 1.10 24.05 2.68 173.39 1.04 342.48 1.09 27.20 2.07 191.63 1.02 353.46 1.07 34.28 1.81 215.13 1.02 362.23 1.03 39.71 1.44 239.73 1.00 380.00 1.00 42.49 1.00 266.63 0.97 407.58 0.99 46.20 0.69 302.41 0.96 440.52 0.97 52.30 0.48
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From page 212... ...
All price indexes are normalized to 1.0 in 1996.
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From page 213... ...
APPENDIX A 213 Software Capital Service Flow Communications Capital Service Flow Computer and Software CD Service Flow Value Price Value Price Value Price 0.00 0.00 2.55 0.50 0.00 0.00 0.02 0.64 2.65 0.47 0.00 0.00 0.08 0.61 2.85 0.45 0.00 0.00 0.15 0.65 3.44 0.48 0.00 0.00 0.22 0.60 3.32 0.42 0.00 0.00 0.34 0.59 3.68 0.42 0.00 0.00 0.52 0.64 4.73 0.50 0.00 0.00 0.74 0.65 5.00 0.48 0.00 0.00 1.03 0.68 5.14 0.45 0.00 0.00 1.29 0.69 5.43 0.44 0.00 0.00 1.57 0.69 6.02 0.44 0.00 0.00 2.09 0.74 7.23 0.48 0.00 0.00 2.83 0.83 8.34 0.51 0.00 0.00 3.01 0.77 8.86 0.51 0.00 0.00 3.47 0.77 12.48 0.68 0.00 0.00 3.99 0.78 11.48 0.58 0.00 0.00 5.17 0.88 13.41 0.64 0.00 0.00 5.60 0.84 13.61 0.62 0.00 0.00 6.26 0.86 22.37 0.94 0.00 0.00 7.31 0.91 19.02 0.72 0.02 17.84 8.19 0.89 26.30 0.89 0.07 19.01 9.99 0.93 23.94 0.72 0.20 25.93 11.76 0.94 23.89 0.64 0.25 13.90 12.54 0.87 25.32 0.62 0.74 11.96 15.11 0.92 29.54 0.67 2.07 10.39 19.02 0.99 33.20 0.70 2.37 6.07 22.41 0.99 39.30 0.77 2.70 4.93 25.88 0.99 43.39 0.79 4.84 5.61 31.84 1.07 55.49 0.94 4.91 3.54 37.72 1.11 67.22 1.07 6.65 3.24 45.96 1.16 67.90 1.02 7.89 2.85 51.07 1.10 69.86 1.00 10.46 2.97 54.07 1.01 66.05 0.91 11.66 2.44 69.11 1.12 70.72 0.94 14.96 2.25 69.32 0.98 80.23 1.02 16.26 1.71 84.14 1.05 89.16 1.09 16.14 1.17 89.18 0.99 101.18 1.17 22.64 1.13 101.46 1.00 92.91 1.00 30.19 1.00 119.80 1.04 100.13 1.00 33.68 0.71 128.32 0.97 103.35 0.94 36.53 0.48
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From page 214... ...
Price of labor input and index of labor quality are normalized to 1.0 in 1996.
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From page 215... ...
APPENDIX A 215 Weekly Hourly Hours Employment Hours Compensation Worked 58,209 38.0 2.3 115,167 58,853 37.7 2.5 115,403 58,551 37.4 2.6 113,996 59,681 37.5 2.7 116,348 60,166 37.5 2.7 117,413 61,307 37.4 2.9 119,111 63,124 37.4 3.0 122,794 65,480 37.1 3.3 126,465 66,476 36.8 3.4 127,021 68,063 36.5 3.7 129,194 70,076 36.4 4.0 132,553 69,799 35.8 4.3 130,021 69,671 35.8 4.6 129,574 71,802 35.8 5.0 133,554 75,255 35.7 5.3 139,655 76,474 35.0 5.7 139,345 74,575 34.6 6.3 134,324 76,925 34.6 7.0 138,488 80,033 34.6 7.5 143,918 84,439 34.5 8.1 151,359 87,561 34.5 8.8 157,077 87,788 34.1 9.6 155,500 88,902 33.9 10.2 156,558 87,600 33.6 11.1 153,163 88,638 33.9 11.9 156,049 93,176 34.0 12.4 164,870 95,410 33.9 13.0 168,175 97,001 33.5 14.2 169,246 99,924 33.7 14.1 174,894 103,021 33.6 14.3 179,891 105,471 33.7 15.3 184,974 106,562 33.6 16.1 186,106 105,278 33.2 16.9 181,951 105,399 33.2 18.3 182,200 107,917 33.5 18.8 187,898 110,888 33.6 18.9 193,891 113,707 33.7 19.3 199,341 116,083 33.6 19.8 202,655 119,127 33.8 20.3 209,108 121,934 33.7 21.3 213,951
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From page 216... ...
__. ~ Computer Investment —Communications Investment ~ Computer and Software CD Services Notes: All prices indexes are relative to the output price index.
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From page 217... ...
-- - Software Capital Computer and Software CD Services Chart 4: Sources of U.S. Economic Growth, 1959-1998 o.o 1959-73 1973-90 1990-95 · Capital and CD Services Labor Input TFP Notes: An input's contribution is the average share-weighted, annual growth rate.
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From page 218... ...
go ~ ~ o 5.0 4.5 4.0 3.5 2.03.0 2.5 1.5 1.0 0.5 0.0 1.2 1.0 0.8 0.8 0.4 0.2 o If_ 4~ 3~ ~ ^~ 6~y Chad 5: Output ContMbuDon of Information Technology, lg5g-lOg8 1 g5g-73 1 g73-gO 1 ggO-g5 1 gg5-g8 ~ ~0_ ~ ~~ Notes: An outputs contrlbu110n Is the average sham-weighted, annual growth rate. Chad 6: Output ContMbuDon of Information Technology Assets, 1 g5g-1 gg8 1 g5g-73 1 g73-gO 1 ggO-g5 1 gg5-g8 _ Computer and S~m Consumption Software Investment Computer and Software CD Services Computer Lena Communlca110ns Investment Now An outputs con~buDon Is He age sham-~h~d, annual gash _.
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From page 219... ...
CD refers to Consumer Durables. Chart 8: Input Contribution of Information Technology, 1959-1998 0.0 1959-73 1 973-90 1990-95 1 995-98 Computer Capital By| Software Capital Communications Capital ~ Computer and Software CD Notes: An input's contribution is the average share-weighted, annual growth rate.
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From page 220... ...
Chart 10: TFP Decomposition for Alternative Deflation Cases Base Case Moderate Price Decline Rapid Price Decline 1990-95 1 995-98 1 995-98 | Information Technology ||| Non-lnformation Technology 1 995-98 Notes: Annual contribution of information technology is the share-weighted decline in relative prices.
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From page 221... ...
APPENDIX A 221 Chart 1 1: Industry Contributions to Aggregate Total Factor Productivity Growth, 1958-1996 Services Construction Petroleum and Gas Fl RE Gas Utilities Goverment Enterprises Printing and Publishing Metal Mining ~ Tobacco Products I General Government Private Households Leather Products Lumber and Wood I Nonmetallic Mining Coal Mining ~ Furniture and Fixtures · Stone, Clay, and Glass OtherTransportation Equipment · Primary Metals Miscellaneous Manufacturing Electric Utilities Paper Products Motor Vehicles _ Rubber and Plastic _ Petroleum Refining _ Textile Mill Products —Instruments _ ~ ~ ~ ~ Annaml and Textile ~ or ~ Fabricated Metals Chemical Products Communications . Food Products Warehouse Industrial Machinery and Equipment Electronic and Electric Equipment Trade -0.100 -0.050 0.000 0.050 0.100 0.150 0.200 0.250 Each industry's contribution is calculated as the product of industry productivity growth and the industry Domar weight, averaged for 1958-1996.
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Key Terms
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