Academic journal article Research-Technology Management

Does the "New Economy" Measure Up to the Great Inventions of the Past?

Academic journal article Research-Technology Management

Does the "New Economy" Measure Up to the Great Inventions of the Past?

Article excerpt

Does the "New Economy" Measure Up to the Great Inventions of the Past? Robert Gordon; Working Paper No. 7833; National Bureau of Economic Research, Cambridge, MA; Dec. 2000.

This Northwestern University economist and NBER research associate is skeptical that inventions like the computer and the Internet have brought the United States to the beginning of another industrial revolution. Without doubting that U.S. productivity has improved in recent years, he argues that the long-term improvements in productivity and living standards are incremental compared to the great inventions of the late 19th and early 20th century. He finds that the New Economy productivity gains are largely confined to the durable manufacturing sector, including the making of computers and semiconductors. Yet that industrial sector only comprises 12 percent of the economy. The New Economy productivity increases haven't spread to the remaining 88 percent of the economy. Dissecting the 1.35 percentage point acceleration in productivity growth achieved in 1995-99 as compared to 1972-95, Gordon calculates that 0. …

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