ABSTRACT
Computers,
Obsolescence, and Productivity (Review of Economics
and Statistics, August 2002).
What effect have
computers had on U.S. productivity growth? This paper shows that increased productivity
in the computer-producing sector and the effect of investment in computers on
the productivity of those who use them together account for the recent acceleration
in U.S. labor productivity. In calculating the computer-usage effect, standard
NIPA measures of the computer capital stock are inappropriate because they do
not account for technological obsolescence; this occurs when machines that are
still productive are retired because they are no longer near the technological
frontier. Using a framework that accounts for technological obsolescence, alternative
stocks are developed that imply larger computer-usage effects.