THE EU IN THE WORLD ECONOMY By Dale W. Jorgenson Harvard University March 15, 2007 European Union.

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Presentation transcript:

THE EU IN THE WORLD ECONOMY By Dale W. Jorgenson Harvard University March 15, European Union Brussels, 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.

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.

Sources of Gross Domestic Product Growth Labor Input Non-IT Capital Input IT Capital InputTFP

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.