Comments on Haimowitz,

1
Comments on Haimowitz, Has the Surge in Computer
Spending Fundamentally Changed the Economy?

• Spending for computers has increased both in
  absolute terms and as a percent of GDP.
• Average growth per year of the computer sector
  1982-96 was 26 percent compared to annual GDP
  growth of 2.6 percent.
• Some economists and technology industry boosters
  claim that the spending for computers is a highly
  important factor in explaining robust growth and
  moderate inflation in the U.S. since 1982.
• Does this argument hold water?

2
Real Computer Spending as a Share in the Major
GDP Categories
Source Haimowitz (1998, p. 31).
3
Haimowitzs method
Growth rate of the real capital stock of
computing equipment
Contribution of Computer Equipment to Growth
Income share of computing equipment
?

• Where,
• Income share of computing is the change in in
  real output (real income) resulting from an
  incremental change in the stock of computer
  equipment, ceteris paribus.

4
Contribution of Computing Equipment to Nonfarm
Output
Source Haimowitz (1998, p. 34)
5
In other words, Haimowitz estimates that about
10 1/2 percent of the growth of real output in
the U.S. between 1992-92 can be explainedby
increases in spendingfor computers and software