THE EU IN THE WORLD ECONOMY By Dale W. Jorgenson Harvard University March 15, 2007 European Union.
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THE EU IN THE WORLD ECONOMY By Dale W. Jorgenson Harvard University March 15, 2007 http://post.economics.harvard.edu/faculty/ jorgenson/ European Union Brussels, Belgium
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Transcript of THE EU IN THE WORLD ECONOMY By Dale W. Jorgenson Harvard University March 15, 2007 European Union.
THE EU IN THE WORLD ECONOMY
By
Dale W. JorgensonHarvard University
March 15, 2007
http://post.economics.harvard.edu/faculty/jorgenson/
European UnionBrussels, Belgium
Economic Growth in the Information Age
INTRODUCTION:
Prices of Information Technology
ROLE OF INFORMATION TECHNOLOGY:
IT Prices and the Cost of Capital
WORLD GROWTH RESURGENCE:
IT Investment and Productivity Growth
ECONOMICS ON INTERNET TIME:
The New Research Agenda
ROLE OF INFORMATION TECHNOLOGY:IT Prices, Investment, and Productivity.
CAPITAL CONTRIBUTION BY TYPE:
Computers, Communications Equipment, and Software.
INPUT SHARES OF IT:
Computers, Communications Equipment, and Software.
CAPITAL CONTRIBUTION:
IT versus Non-IT Capital Services.
0.00
0.50
1.00
1.50
2.00
2.50
1960-1995 1995-2000 2000-2004
An
nu
al C
on
trib
uti
on
(%
)
Non-IT Capital Services IT Capital Services
Capital Input Contribution of Information Technology
Annual percentage growth rates, weighted by income shares.
Capital Input Contribution: G7
-0.50
0.00
0.50
1.00
1.50
2.00
2.50
3.0019
80-1
989
1989
-199
5
1995
-200
0
2000
-200
4
1981
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
1980
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
1980
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
1980
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
1980
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
1980
-198
9
1989
-199
5
1995
-200
0
2000
-200
4
US Canada UK France Germany Italy Japan
An
nu
al C
on
trib
uti
on
(%
)
Non-IT Capital IT Capital
Capital Input Contribution: World and Regions
-1.50
-1.00
-0.50
0.00
0.50
1.00
1.50
2.00
2.5019
89-1
995
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
World G7 Developing Asia Non-G7 Latin America Eastern Europe Sub-SaharanAfrica
N. Africa &M. East
An
nu
al C
on
trib
uti
on
(%
)
Non-IT Capital IT Capital
Capital Input Contribution: Developing and Transition Economies
-2.00
-1.00
0.00
1.00
2.00
3.00
4.0019
89-1
995
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
Brazil China India Indonesia Mexico Russia S. Korea
An
nu
al C
on
trib
uti
on
(%
)
Non-IT Capital IT Capital
WORLD GROWTH RESURGENCE: IT Investment and Productivity Growth.
LABOR INPUT GROWTH:
Hours Worked and Labor Quality.
TOTAL FACTOR PRODUCTIVITY:
IT-Production versus Non-IT Production.
SOURCES OF ECONOMIC GROWTH:
Capital Input, Labor Input, and TFP.
-0.20
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1960-1995 1995-2000 2000-2004
Non-IT Industries IT-Using Industries IT-Producing Industries
Industry Contributions to Productivity GrowthDomar weighted productivity.
Change in Contribution to Productivity: 2000-2004 less 1960-1995IT-Users
-0.15 -0.1 -0.05 0 0.05 0.1 0.15 0.2 0.25
Nondeposit; Sec-com brokers;InvesGas utilities
Other Electrical machineryMotion pictures
Other Transportation equipmentPrinting and reproduction
Other InstrumentsTransportation svcs & Pipelines
Insulated wireEducational services (private)
Legal servicesResearch
PublishingMisc repair
Ships and boats Audio and video equip
AerospaceMeasuring instruments
Misc professional servicesMedical equipment and opthalmic goods
Machinery excl computersRadio and TV
Social svc and membership orgAir transport.
Telephone and telegraphInsurance carriers, ins agents, services
Business svc exc computerWholesale trade
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
1960-1995 1995-2000 2000-2004
Ann
ual
Con
trib
utio
n (%
)
Non-college Labor College Labor Non-IT Capital IT Capital Aggregate TFP
Sources of U.S. Economic Growth
Sources of Gross Domestic Product Growth
Labor Input Non-IT Capital Input IT Capital Input TFP
-1.00
0.00
1.00
2.00
3.00
4.00
5.00198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
1-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
198
0-1
989
198
9-1
995
199
5-2
000
200
0-2
004
US Canada UK France Germany Italy Japan
An
nu
al
Co
ntr
ibu
tio
n (
%)
Sources of Growth by Country: World and Regions
-10.00
-8.00
-6.00
-4.00
-2.00
0.00
2.00
4.00
6.00
8.00
10.0019
89-1
995
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
World G7 Developing Asia Non-G7 Latin America Eastern Europe Sub-SaharanAfrica
N. Africa &M. East
An
nu
al C
on
trib
uti
on
(%
)
Labor Non-IT Capital IT Capital TFP
Sources of Economic Growth: Developing and Transition Economies
-10.0
-5.0
0.0
5.0
10.0
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
1989
-199
5
1995
-200
0
2000
-200
4
Brazil China India Indonesia Mexico Russia S. Korea
An
nu
al
Co
ntr
ibu
tio
n (
%)
Labor Non-IT Capital IT Capital TFP
ECONOMICS ON INTERNET TIME: The New Research Agenda.
• Modeling IT-Producing and IT-Using Industries: investment versus TFP as sources of economic growth.
•The Solow Paradox -- we see computers everywhere but in the productivity statistics -- versus the Information Age.
•Equity Valuations and Growth Prospects: accumulation of intangible assets versus irrational exuberance.
•Widening Wage Inequality:capital-skill complementarity versus skill-biased technical change.
