Information Technology and the Japanese Economy

Dale W. Jorgenson, Kazuyuki Motohashi

NBER Working Paper No. 11801
Issued in November 2005
NBER Program(s):   PR

In this paper we compare sources of economic growth in Japan and the United States from 1975 through 2003, focusing on the role of information technology (IT). We have adjusted Japanese data to conform to U.S. definitions in order to provide a rigorous comparison between the two economies. The adjusted data show that the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply after 1995. The contribution of total factor productivity growth from the IT sector in Japan also increased, while the contributions of labor input and productivity growth from the Non-IT sector lagged far behind the United States. Our projection of potential economic growth in Japan from for the next decade is substantially below that in the United States, mainly due to slower growth of labor input. Our projections of labor productivity growth in the two economies are much more similar.

(311 K)

Published:

• Jorgenson, Dale W. and Kazuyuki Motohashi. "Information Technology And The Japanese Economy," Journal of the Japanese and International Economies, 2005, v19(4,Dec), 460-481. ,
• Information Technology and the G7 Economies, Dale W. Jorgenson, in Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches (2007), University of Chicago Press
  

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