Prices for Communications Equipment: Rewriting the Record

FEDS Working Paper No. 2015-069

http://dx.doi.org/10.17016/FEDS.2015.069

56 Pages Posted: 21 Sep 2015

See all articles by David M. Byrne

David M. Byrne

Board of Governors of the Federal Reserve System

Carol A. Corrado

The Conference Board; Georgetown University - Center for Business and Public Policy

Date Written: September 18, 2015

Abstract

Communication equipment plays as large a role in high-tech investment as computers, yet prices for communication equipment have not been studied as extensively as prices for computers and electronic components. Prices for satellites, cell phones, and the ground stations for these systems — important components of a nation’s communications infrastructure — are difficult to locate in official statistics. This paper develops new price measures for 16 types of communications equipment from 1963 to 2009. Indexes for some (e.g., cellular phone systems) experience declines of 15-20 percent per year, similar to the decline in quality-adjusted prices for computers, and suggest that advances in wireless communications technology have been very rapid. All told, our price index for domestic production falls 4.8 percent per year on average over the time period we study and 9.8 percent per year on average since 1985 — nearly 10 percentage points faster than the official U.S. producer price index introduced in that year.

Keywords: ICT, communications equipment, price measurement, technical change, wireless technology

JEL Classification: E01, L16, L63, N12, N72, O30

Suggested Citation

Byrne, David M. and Corrado, Carol A., Prices for Communications Equipment: Rewriting the Record (September 18, 2015). http://dx.doi.org/10.17016/FEDS.2015.069. Available at SSRN: https://ssrn.com/abstract=2662599 or http://dx.doi.org/10.2139/ssrn.2662599

David M. Byrne (Contact Author)

Board of Governors of the Federal Reserve System ( email )

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Washington, DC 20551
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Carol A. Corrado

The Conference Board ( email )

845 Third Avenue
New York, NY 10022
United States
202-340-0252 (Phone)

Georgetown University - Center for Business and Public Policy ( email )

Washington, DC 20057
United States

HOME PAGE: http://cbpp.georgetown.edu

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