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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 ...
Working Paper
Portable random number generators
Computers are deterministic devices, and a computer-generated random number is a contradiction in terms. As a result, computer-generated pseudorandom numbers are fraught with peril for the unwary. We summarize much that is known about the most well-known pseudorandom number generators: congruential generators. We also provide machine-independent programs to implement the generators in any language that has 32-bit signed integers-for example C, C++, and FORTRAN. Based on an extensive search, we provide parameter values better than those previously available.
Journal Article
The state of modern economics : Econoblogs
Economists think out loud online
Conference Paper
The resurgence of growth in the late 1990s: is information technology the story?
The performance of the U.S. economy over the past several years has been remarkable, including a rebound in labor productivity growth after nearly a quarter century of sluggish gains. To assess the role of information technology in the recent rebound, this paper re-examines the growth contribution of computers and related inputs with the same neoclassical framework that we have used in earlier work. ; Our results indicate that the contribution to productivity growth from the use of information technology - including computer hardware, software, and communication equipment - surged in the ...
Working Paper
Computers, obsolescence, and productivity
This paper examines the role that computers have played in boosting U.S. economic growth in recent years. The paper focuses on two effects--the effect of increased productivity in the computer-producing sector and the effect of investments in computing equipment on the productivity of those who use them--and concludes that together they account for almost all of the recent acceleration in U.S. labor productivity. In calculating the computer-usage effect, standard NIPA measures of the capital stock are inappropriate for growth accounting because they do not account for technological ...
Journal Article
Fed computer systems and the year 2000
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.
Report
Is equipment price deflation a statistical artifact?
I argue that equipment price deflation might be overstated because the methods used to measure it rely on the erroneous assumption of perfectly competitive markets. The main intuition behind this argument is that what these price indices might actually capture not a price decrease but the erosion of the market power of existing vintages of machines. To illustrate my argument, I introduce an endogenous growth model in which heterogeneous final goods producers can choose the technology they will use. The various technologies are supplied by monopolistically competing machine suppliers. This ...
Working Paper
Computers and the trade deficit: the case of the falling prices
This paper investigates two issues related to international trade in computers: measurement and prediction. Because of the rapid technological advancement in the computer industry, the Bureau of Economic Analysis (BEA) measures computer prices using techniques that adjust for quality change. The constructed hedonic index is essentially a domestic price measure, but the BEA uses it for the deflation of international sales and purchases of computers. This paper begins with a review of the theory behind hedonic price indexes, and then proceeds to discuss the concerns that arise when a domestic ...