How Fast Do Personal Computers Depreciate? Concepts and New Estimates

FRB of San Francisco Working Paper No. 2003-20

58 Pages Posted: 27 May 2004

See all articles by Mark E. Doms

Mark E. Doms

Federal Reserve Bank of San Francisco

Wendy E. Dunn

Board of Governors of the Federal Reserve System

Stephen D. Oliner

American Enterprise Institute

Daniel E. Sichel

Wellesley College; NBER

Multiple version iconThere are 2 versions of this paper

Date Written: November 26, 2003

Abstract

This paper examines the prices for communications equipment, an important component of information technology. Unlike prices for computers which officially fall sharply every year, the official prices for communications equipment have barely budged over the past decade. This paper combines earlier work on prices for several segments of communications equipment with new results for public exchanges, fiber optic equipment, and modems. The results suggest that prices for communications equipment fall much faster than official statistics would indicate, but not as fast as computers. The results presented in this paper, if incorporated into the NIPAs, would decrease MFP growth by about 0.1 percentage point per year and increase the contribution of capital deepening by a likewise amount. Also, GDP growth would be boosted marginally.

Keywords: Computers

JEL Classification: L63

Suggested Citation

Doms, Mark E. and Dunn, Wendy E. and Oliner, Stephen D. and Sichel, Daniel E., How Fast Do Personal Computers Depreciate? Concepts and New Estimates (November 26, 2003). FRB of San Francisco Working Paper No. 2003-20, Available at SSRN: https://ssrn.com/abstract=550444 or http://dx.doi.org/10.2139/ssrn.550444

Mark E. Doms (Contact Author)

Federal Reserve Bank of San Francisco ( email )

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San Francisco, CA 94105
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Wendy E. Dunn

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Stephen D. Oliner

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
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2024195205 (Phone)

HOME PAGE: http://www.aei.org/scholar/stephen-d-oliner/

Daniel E. Sichel

Wellesley College ( email )

106 Central St.
Wellesley, MA 02181
United States

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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