Transcript information technology and us economic growth

U.S. Growth and Productivity using new
National Accounts with Intellectual Property
Dale Jorgenson, Mun Ho, Jon Samuels**
Harvard University, and ** BEA
Asia KLEMS Workshop
Tokyo, October 17 2014
The views expressed in this paper are solely those of the authors and are not
necessarily those of the Bureau of Economic Analysis, U.S. Department of 1
Commerce.
Agenda
- Revision to US National Accounts
- IT and R&D at the industry level
- 63-year Economic History,1947-2010
The Sources of Growth
- Divide into 3 sub-periods:
- 1947-73 Post-war Recovery
- 1973-95 The Long Slump
- 1995-2012 Growth and Recession
2
Revisions to U.S. National Accounts 2013
R&D as Investment
Entertainment & oth artistic originals as Investment
Transfer costs of houses as Investment
Pension plans and wages on accrual basis
3
Revision to U.S. National Accounts 2013
2007
GDP
Consumption
Investment
Nonresid structures
Equipment
Intellectual Prop
Software
R&D
Artistic originals
Resid structures
Inventories
Net exports
Government
New a/c
14480
9744
2644
497
886
538
244
223
70
689
35
-710
2802
Revision
452
-28
349
-28
18
294
-1
223
70
60
5
3
128
4
Revision to growth rates
1973-95 1995-2012
Revised accounts
GDP
2.86%
2.47%
Investment
3.03%
2.66%
GDP
2.79%
2.37%
Investment
2.93%
2.49%
Previous accounts
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6
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9
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IT and R&D use at the industry
level
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Growth Accounting Summary
PPF over industry value added
 ln VtGDP   j w jt  ln V jt
Aggregate TFP from PPF:
Tagg
 ln VtGDP  vKt  ln Ktagg  vLt  ln Lagg

v
t
t
Aggreg TFP = Domar sum of industry tfp and reallocations:
vtTagg

j
w jt
vVjt
vTjt  RtK  RtL
 ln Y j  vKjt  ln K jt  vLjt  lnL jt  vXjt  ln X jt  vTjt
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Industry Contributions
to Aggregate TFP
Growth, 1995-2012
Computer
Wholesale
Retail Trade
Securities & inv.
Broadcasting, telecom
Publishing (inc software)
Computer systems
Farms
Utilities
Restaurants
Information, data proc
S&L Gen Government
Hospitals
Chemicals
Banks
Other services
Rental
Petroleum
Construction
Total
Domar
TFP Contrib to
Weight Growth Agg TFP
0.038
7.156
0.296
0.075
1.473
0.111
0.086
1.091
0.098
0.029
1.940
0.046
0.047
0.946
0.046
0.023
1.488
0.032
0.018
1.736
0.031
0.023
0.711
0.018
0.029
0.617
0.011
0.035
0.059
0.002
0.008 -0.536
-0.001
0.128 -0.012
-0.002
0.049 -0.511
-0.023
0.048 -0.517
-0.026
0.053 -0.567
-0.029
0.040 -0.736
-0.031
0.019 -2.665
-0.049
0.031 -0.336
-0.052
0.088 -1.120 18 -0.108
1.807
0.506
Contributions of Individual
Industries to Productivity
Growth, 1947-2012
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SOURCES OF U.S. ECONOMIC GROWTH
Contribution of Capital Input
IT and Non-IT Capital
Contribution of Labor Input
College educated and Non-college
Contribution of Productivity
Replication vs. Innovation
 ln Vt  vKIT  ln K tIT  vRD  ln K tRD  voth  ln K toth
noncol
vL ,Col  ln Lcollege

v

ln
L
 vTt
t
L , nC
t
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Growth accounting with and without Intellectual Property
Capital, 1973-95
Contributions
Value Added
Revised w IPP
Old version
2.75
2.65
IT-Producing Industries
0.33
0.33
IT-Using Industries
1.76
1.70
Non-IT Industries
0.66
0.62
Capital Input
1.54
1.31
IT Capital
0.47
0.46
Non-IT Capital
1.07
0.85
R&D Capital
Labor Input
0.15
0.98
1.05
College Labor
0.66
0.70
Non-college Labor
0.32
0.35
Aggregate TFP
0.22
0.28
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SUMMARY
- Including R&D and Artistic Originals in capital input raised Capital
input and GDP growth slightly, and reduce role of TFP slightly
- Historically, input growth in the major source of growth,
capital contributed 1.6% out of 3.0%. R&D only 0.18%
- TFP contribution was highest during the Jobless Growth 2000-05
period of low investment and low growth
- Effect of Financial Crisis.
* IT-Production productivity relatively unchanged.
* Big fall in productivity of non-IT group leading to zero aggregate
TFP.
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Extra Slides
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The Evolution of Labor Input.
More Information Technology and
more Educated workers
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Highlighting the role of Information Technology
Divide industries into 3 groups:
1) IT producing
2) IT-intensive using
3) non-IT intensive using
IT-intensity index is the ratio of IT capital input plus IT
intermediates to total capital input plus IT intermediates:
III j 
K IT
jT  AIT , j ,T
K jT  AIT , j ,T
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Classification of Industries (IT Intensity 2005)
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Classification of Industries (IT Intensity 2005)
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Classification of Industries (IT Intensity 2005)
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Industry Contributions to
Value Added Growth; 19472010
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