Carnegie-Rochester Conference Series on Public Policy最新文献

Not long ago, discussions of the computer revolution by economists centered on the disappointing payoff computers seemed to be having on aggregate, industry, or firm-level movements in productivity, but this disappointed has passed and the business pages are filled with stories heralding the arrival of the “new economy”. This paper investigates the role of computers, software, and communications equipment in the recent surge in U.S. productivity growth in a neoclassical model of investment and production in an attempt to clarify the potential importance of frictions in the transition to a more computer-intensive mode of production on the productivity effects of high-tech equipment. The estimated response of investment in high-tech equipment to its relative price is substantial and sluggish. The high-price elasticity of high-tech capital implies, in conjunction with reasonable assumptions about future declines in high-tech equipment prices and multifactor productivity throughout the economy, that trend GDP growth over 2001–2005 is likely to range between 3 percent and 3-$\text{3}\text{4}$ percent. The estimated investment frictions are suggestive of complicated dynamics in the short-run impact of high-tech investment on productivity; firm-level evidence suggests such short-run effects may be important, as do the large costs of training workers and installing high-tech capital.

Quah's [1993a] transition matrix analysis of world income distribution based on annual data suggests an ergodic distribution with twin peaks at the rich and poor end of the distribution. Since the ergodic distribution is a highly non-linear function of the underlying transition matrix, it is estimated extremely noisily. Estimates over the foreseeable future are more precise. However, the Markovian assumptions underlying the analysis are much better satisfied with an analysis based on five-year transitions than one-year transitions. Such an analysis yields an ergodic distribution with 72% of mass in the top income category, but a prolonged transition, during which some inequality measures increase.

The rosy ergodic forecast and prolonged transition arise because countries' relative incomes move both up and down at moderate levels, but once countries reach the highest income category, they rarely leave it. This is consistent with a model in which countries search among policies until they reach an income level at which further experimentation is too costly. If countries can learn from each other's experience, the future may be much brighter than would be predicted based on projecting forward the historical transition matrix.

Kremer, Onatski, and Stock (KOS) criticize twin peaks dynamics in the evolution of cross-country income dynamics. They suggest instead convergence to a single peak at high incomes, with a prolonged transition when polarization and inequality increase. This article makes three points. First, the data are as consistent with a twin peaks characterization as they are for KOS's preferred description—in KOS's own analysis as well as across other studies. Second, the substantive economic message is identical in both twin peaks and KOS views: the global poor are substantial and will continue so—whether for centuries or for infinity is nit-picking. Finally, getting the empirics right matters greatly for theories of economic growth.

The factory system, which arose with the British Industrial Revolution, was responsible for bringing about the separation of the location of consumption (the household) and that of production (the plant or office). This separation has had large effects on economic welfare. The reasons behind the emergence of the factory system are analyzed here, and a new interpretation is proposed, based on the need to divide up the growing knowledge base of production in an age of technological advances. The possibilities and implications of telecommuting as a reversal of this trend are examined.