Return of the Solow Paradox? It, Productivity, and Employment in U.S. Manufacturing

23 Pages Posted: 25 Jan 2014  

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

David H. Autor

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

David Dorn

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute)

Gordon H. Hanson

University of California, San Diego (UCSD) - Graduate School of International Relations and Pacific Studies (IRPS); National Bureau of Economic Research (NBER)

Brendan Price

Massachusetts Institute of Technology (MIT) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: January 2014

Abstract

An increasingly influential "technological-discontinuity" paradigm suggests that IT-induced technological changes are rapidly raising productivity while making workers redundant. This paper explores the evidence for this view among the IT-using U.S. manufacturing industries. There is some limited support for more rapid productivity growth in IT-intensive industries depending on the exact measures, though not since the late 1990s. Most challenging to this paradigm, and our expectations, is that output contracts in IT-intensive industries relative to the rest of manufacturing. Productivity increases, when detectable, result from the even faster declines in employment.

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Suggested Citation

Acemoglu, Daron and Autor, David H. and Dorn, David and Hanson, Gordon H. and Price, Brendan, Return of the Solow Paradox? It, Productivity, and Employment in U.S. Manufacturing (January 2014). NBER Working Paper No. w19837. Available at SSRN: https://ssrn.com/abstract=2384295

Daron Acemoglu (Contact Author)

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David H. Autor

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David Dorn

University of Zurich - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR) ( email )

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IZA Institute of Labor Economics

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Germany

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Gordon H. Hanson

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Brendan Price

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