1. NTTS Satellite event 17 February Brussels Hugo de Bondt
Dutch growth accounts, intangibles and choice of ICT deflators
NTTS Satellite event 17 February Brussels
Hugo de Bondt

2. Background ICT deflators vary Byrne & Corrado 2016:
“Official prices are found to substantially understate ICT price declines.”
“The paper's primary conclusion is that real ICT price declines remain squarely in negative territory”

3. Byrne and Corrado results

4. Eurostat data on deflators
Deflators for computers in most EU member states go down:

5. Computer prices (derived from net stocks)
Source: Eurostat

6. Eurostat data on deflators
But for software the picture is more mixed:

7. Software prices (derived from net stocks)
Source: Eurostat

8. Implications for growth accounts
Deflators for computers differ from software
Allow for (more) quality-increases in software and telecommunications equipment
thereby adjusting the capital contribution

9. Implications for growth accounts
Research project ICT & economic growth
Financed by ministry of Economic Affairs
Describe the role of ICT in the Dutch Economy
Replication of Chapter 3 in ICT and Economic Growth:
Use computer deflators for software and telecommunications equipment
Growth accounts based on ESA 2010;

10. Implications for growth accounts
Dutch Growth Accounts
Based on ESA 2010
Y-KLEMS and VA-KL
Both ex-ante and ex-post rates of return to capital
Commercial sector

11. Implications for growth accounts
Capital contributions with computer deflators for ICT capital, commercial sector
2002/2015
official data
computer deflator
percentage point
Capital
0,2
0,6
ICT capital
0,3
0,7
computers
0,1
software
0,5
communication equipment
0,0
Non-ICT capital
-0,1
Source: Statistics Netherlands

12. Implications for growth accounts
Capital contribution more than doubles
Mainly because of the software-contribution
Telecommunication is larger, but are still zero due to its relative small cost share within capital services
Not yet researched:
Also the volume-change of value added changes (through own-account production)
This then changes the estimate of mfp (by the ratio of the value-added difference and the capital services difference)

13. References
Byrne, D. and C. Corrado, ‘ICT prices and ICT services; what do they tell us about productivity and technology?’, The Conference Board EPWP Series #16-05 (2016).
Statistics Netherlands, ICT and Economic Growth, (The Hague/ Heerlen 2015).