The Computer-Driven Productivity Boom

Abstract

Judging tivity boom has arrived. In the first quarter of 1998 computers apparently added more than 1.4 percentage points to the growth of the gross domestic product (GDP). Their impact on measured productivity growth was even larger. It is likely that this impact will increase in coming years as the importance of computers relative to the economy as a whole continues to expand. Computers are finally making a visible difference in the data. However, while computers are driving up the pace of productivity and GDP growth, they are not doing it in quite the way that the new-economy optimists might have envisioned. The upturn in GDP and productivity growth is due to the economy's greater productivity in producing computers, or at least the Commerce Department's measurement of productivity in this area. There is still no real evidence that computers are making a big difference in the economy's production of goods other than computers. In recent quarters, the Commerce Department's method of