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

Go to the website.

This paper by Robert J. Gordon, published in 2000, has become a classic. The paper raised "doubts about the validity of this comparison (of the New Economy -- the Internet and the accompanying acceleration of technical change in computers and telecommunications) with the Great Inventions of the past. It dissects the recent productivity revival and separates the revival of 1.35 percentage points (comparing 1995-99 with 1972-95) into 0.54 of an unsustainable cyclical effect and 0.81 points of acceleration in trend growth. The entire trend acceleration is attributed to faster multi-factor productivity (MFP) growth in the durable manufacturing sector, consisting of computers, peripherals, telecommunications, and other types of durables. There is no revival of productivity growth in the 88 percent of the private economy lying outside of durables; in fact when the contribution of massive investment in computers in the nondurable economy is subtracted, MFP growth outside of durables has actually decelerated." (Quoted from the abstract.)

The paper is available on the IDEAS database. What makes the webpage especially valuable, however, is that it has links to eleven papers on the database that Gordon referenced in the paper, and to 56 papers in the database that in turn have referenced this paper. Thus the webpage serves as a good introduction to a stream of economic analysis on the impact of ICTs.