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Working Paper
Prices for Local Area Network Equipment
In this paper we examine quality-adjusted prices for local area network (LAN) equipment. Hedonic regressions are used to estimate price changes for the two largest classes of LAN equipment, routers and switches. A matched model was used for LAN cards and the prices for hubs were inferred by using an economic relationship to switches. Overall, we find that prices for the four groups of LAN equipment fell at a 17 percent annual rate between 1995 and 2000. These results stand in sharp contrast to the PPI for communications equipment that is nearly flat over the 1990s.
Working Paper
Labor supply and personal computer adoption.
The positive correlations found between computer use and human capital are often interpreted as evidence that the adoption of computers have raised the relative demand for skilled labor, the widely touted skill-biased technological change hypothesis. However, several models argue the skill- intensity of technology is endogenously determined by the relative supply of skilled labor. The authors use instruments for the supply of human capital coupled with a rich dataset on computer usage by businesses to show that the supply of human capital is an important determinant of the adoption of ...
Working Paper
Subprime mortgage delinquency rates
We evaluate the importance of three different channels for explaining the recent performance of subprime mortgages. First, the riskiness of the subprime borrowing pool may have increased. Second, pockets of regional economic weakness may have helped push a larger proportion of subprime borrowers into delinquency. Third, for a variety of reasons, the recent history of local house price appreciation and the degree of house price deceleration may have affected delinquency rates on subprime mortgages. While we find a role for all three candidate explanations, patterns in recent house price ...
Journal Article
The outlook for productivity growth: symposium summary
This Economic Letter summarizes several papers presented at the symposium "The Outlook for Future Productivity Growth" hosted November 14, 2008, by the Federal Reserve Bank of San Francisco's Center for the Study of Innovation and Productivity (CSIP). The papers are listed at the end and most are available online.
Journal Article
House prices and subprime mortgage delinquencies
In this Economic Letter, we explore how the pace of and change in house-price appreciation can affect the incentives and opportunities for borrowers in a market to avoid delinquencies and foreclosures. For instance, with likely gains in home equity in markets where house prices have risen significantly, a homeowner should have greater incentives and opportunities to keep a mortgage loan current. Indeed, we show that markets that recently experienced greater house-price appreciation tended to have lower delinquency rates and smaller increases in delinquency rates. We also find that ...
Working Paper
IT investment and firm performance in U.S. retail trade
We examine the relationship between investments in information technology (IT) and two measures of retail firm performance: labor productivity and productivity growth over the 1992 to 1997 period. We use untapped firm and establishment micro data from the Censuses of Retail Trade and the Assets and Expenditures Survey. We show that large firms account for most retail IT investment, employment and establishment growth. We find evidence of a significant relationship between IT investment intensity and productivity growth. We found no evidence of a similar link between IT and growth in the ...
Journal Article
IT investment: will the glory days ever return?
While the growth in IT investment has picked up during the recovery and expansion, it has not regained the very rapid pace of the glory days of the late 1990s. Will those glory days ever return? In exploring this question, this Economic Letter looks at one of the main drivers behind the earlier strength in IT investment?the falling prices of IT goods, which themselves were brought about by rapid technological advances in the field. The good news is that some evidence suggests that continued advances should help real IT investment achieve rates of growth that exceed the growth in other ...
Journal Article
The diffusion of personal computers across the United States
For the last fifteen years or so, information technology (IT) has become an ever more important part of the U.S. economy. Looking back over the period, there can be little doubt that the growing use of IT contributed significantly to the economy's performance, especially in the latter half of the 1990s, when output grew rapidly, unemployment declined to 25-year lows, productivity surged, and the inflation rate actually fell. ; A key question about IT's role in this performance is how its use spreads or diffuses throughout the economy. This Economic Letter focuses on a particular part of this ...
Journal Article
Financial innovations and the real economy: conference summary
This Economic Letter summarizes the papers presented at the conference ?Financial Innovations and the Real Economy? held at the Federal Reserve Bank of San Francisco by the Bank?s Center for the Study of Innovation and Productivity on November 16?17, 2006.
Working Paper
Consumer Sentiment, the Economy, and the News Media
The news media affects consumers’ perceptions of the economy through three channels. First, the news media conveys the latest economic data and the opinions of professionals to consumers. Second, consumers receive a signal about the economy through the tone and volume of economic reporting. Last, the greater the volume of news about the economy, the greater the likelihood that consumers will update their expectations about the economy. We find evidence that all three of these channels affect consumer sentiment. We derive measures of the tone and volume of economic reporting, building upon ...