Information and communications technology as a general-purpose technology: evidence from U.S industry data

Susanto Basu and John Fernald ()

No 2006-29, Working Paper Series from Federal Reserve Bank of San Francisco

Abstract: Many people point to information and communications technology (ICT) as the key for understanding the acceleration in productivity in the United States since the mid-1990s. Stories of ICT as a 'general purpose technology' suggest that measured TFP should rise in ICT-using sectors (reflecting either unobserved accumulation of intangible organizational capital, spillovers, or both), but with a long lag. Contemporaneously, however, investments in ICT may be associated with lower TFP as resources are diverted to reorganization and learning. We find that U.S. industry results are consistent with GPT stories: the acceleration after the mid-1990s was broadbased--located primarily in ICT-using industries rather than ICT-producing industries. Furthermore, industry TFP accelerations in the 2000s are positively correlated with (appropriately weighted) industry ICT capital growth in the 1990s. Indeed, as GPT stories would suggest, after controlling for past ICT investment, industry TFP accelerations are negatively correlated with increases in ICT usage in the 2000s.

Keywords: Information technology; Labor productivity; Industrial productivity (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-eff, nep-ino and nep-knm
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Related works:
Journal Article: Information and communications technology as a general purpose technology: evidence from U.S. industry data (2008)
Journal Article: Information and Communications Technology as a General‐Purpose Technology: Evidence from US Industry Data (2007)
Journal Article: Information and Communications Technology as a General-Purpose Technology: Evidence from US Industry Data (2007)
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