Is the Productivity Slowdown in the US and the Acceleration in the Euro Area Structural or Cyclical?

Transcription

1 The Creation of Economic and Corporate Wealth in a Dynamic Economy Is the Productivity Slowdown in the US and the Acceleration in the Euro Area Structural or Cyclical? By Dale W. Jorgenson Harvard University January 16,

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3 EU KLEMS PROJECT INTERMEDIATE RELEASE: November 6, EU ECONOMIES: U.S., Australia, Canada, Japan, and Korea U.S. DATA SOURCES: Labor, Capital, and Intermediate Inputs COMPLETION DATE: June 30, 2008

4 INFORMATION TECHNOLOGY AND THE AMERICAN GROWTH RESURGENCE AFTER THE CRASH: The IT Boom, the Dot-Com Crash, and the Jobless Recovery WHAT S NEW? 85 Industries Covering DATA SOURCES: Labor, Capital, and Intermediate Input THE NEW AGENDA: Trade and Services to the Fore

5 IT-RELATED INDUSTRIES IT-PRODUCING INDUSTRIES Communications Equipment Computer services Computers & Office Equipment Electronic Components IT-USING INDUSTRIES Audio and video equip Insulated wire Other Electrical machinery Aerospace Air transport. Business svc exc computer Educational services (private) Gas utilities Insurance carriers, ins agents, services Legal services Machinery excl computers Measuring instruments Medical equipment and opthalmic goods Misc professional services Misc repair Motion pictures Nondeposit; Sec-com brokers;inves Other Instruments Other Transportation equipment Printing and reproduction Publishing Radio and TV Research Ships and boats Social svc and membership org Telephone and telegraph Transportation svcs & Pipelines Wholesale trade

6 NON-IT INDUSTRIES Agri services, forestry Apparel Auto services Chemicals excl drugs Coal mining Construction Depository Inst Drugs Eating and drinking Electric utilities (pvt) Fabricated metal prd Farms Fishing Food Furniture and fixtures Government Health services, nec Hospitals, private Hotels Leather Local passenger transit Lumber and wood Metal mining Misc manufacturing Motor vehicles Nonmetal mining Nonmetallic mineral products Nursing and personal care facilities Offices of health practitioners Oil and gas extraction Paper and allied Personal services Petroleum and coal products Primary metals Railroad transportation Real Estate- other Recreation services Retail trade exc motor veh Retail trade; motor vehicles Rubber and misc plastics Textile Tobacco Trucking and warehousing Water and sanitation Water transport.

7 ROLE OF INFORMATION TECHNOLOGY: Growth of Output OUTPUT SHARES OF IT: Computers, Communications Equipment, Semiconductors, and Software OUTPUT CONTRIBUTION BY TYPE: Computers, Communications Equipment, Semiconductors, and Software OUTPUT CONTRIBUTION OF IT: IT-Producing, IT-Using, and Non-IT Value Added

8 Relative Prices of Computers, Communications, Semiconductors, and Software and Computer Services Industry Output, Log Scale (2000=1) Computers Communications Equipment Electronic Components Software and Computer Services

9 4.0 Value Added Shares of Information Technology by Type, Share of Current Dollar GDP Computers Communications Equipment Electronic Components Software and Computer Services Total IT

10 0.8 Industry Contributions to Value Added Value added weighted contributions of industry value added Annual Contribution (%) Computers Communications Equipment Electronic Components Software and Computer Services

11 4.50 Industry Contributions to Value Added Growth Value added weighted contributions of industry value added Annual Contribution (%) Non-IT Industries IT-Using Industries IT-Producing Industries

12 GROWTH IN THE NEW MILLENNIUM: IT Investment and Productivity Growth TOTAL FACTOR PRODUCTIVITY: IT-Producing, IT-Using, and Non-IT Production SOURCES OF U.S. ECONOMIC GROWTH: Capital Input, Labor Input, and TFP AVERAGE LABOR PRODUCTIVITY GROWTH: Capital Deepening, Labor Quality, TFP

13 1.60 Industry Contributions to Productivity Growth Domar weighted productivity Non-IT Industries IT-Using Industries IT-Producing Industries

14 Change in Contribution to Productivity: less IT-Users Telephone and telegraph Business svc exc computer Insurance carriers, ins agents, services Air transport. Social svc and membership org Misc professional services Wholesale trade Radio and TV Machinery excl computers Medical equipment and opthalmic goods Measuring instruments Aerospace Publishing Gas utilities Audio and video equip Legal services Ships and boats Educational services (private) Other Electrical machinery Transportation svcs & Pipelines Other Transportation equipment Printing and reproduction Other Instruments Misc repair Insulated wire Research Motion pictures Nondeposit; Sec-com brokers;inves

15 4.50 Sources of U.S. Economic Growth Annual Contribution (%) Non-college Labor College Labor Non-IT Capital IT Capital Aggregate TFP

16 3.50 Sources of U.S. Labor Productivity Growth Annual Contribution (%) Reallocation of Hours Non-college Labor Quality College Labor Quality Non-IT Capital Deepening IT Capital Deepening Aggregate TFP

17 Sources of Growth by Country: World and Regions Annual Contribution (%) World G7 Developing Asia Non-G7 Latin America Eastern Europe Sub-Saharan Africa Hours Quality Non-IT Capital IT Capital TFP N. Af rica & M. East

18 Sources of Growth by Country: G7 Annual Contribution (%) US Canada UK France Germany Italy Japan Hours Quality Non-IT Capital IT Capital TFP

19 Sources of Growth by Country: Developing and Transition Economies Annual Contribution (%) South Korea Brazil China India Indonesia Mexico Russian Federation Hours Quality Non-IT Capital IT Capital TFP

20 THE NEW AGENDA: IT PRODUCTION: Permanent vs. Transitory Changes IT UTILIZATION: Trade and Services to the Fore THE OUTLOOK: Potential for Growth Unchanged THE U.S. AND THE WORLD ECONOMY: Where Do We Stand?