Abstract
Semiconductor technology lies at the heart of the revolution in information technology. While the official price index in the National Income and Product Accounts for computers has been revised to account for changes in the performance characteristics of computer systems (Cole, et al. 1986), no comparable modification has been made to the price of semiconductor devices. Yet semiconductor devices incorporated in telecommunication equipment have been largely responsible for the technological change that led to deregulation of the telecommunication services industry. The rapid rate of adoption of advanced telecommunication equipment and the decline in cost (without corresponding decline in quality) of telecommunication services are indirect qualitative evidence for embodied quality change in telecommunication equipment. Our empirical investigation is designed to develop quantitative evidence for quality change in semiconductor devices based on their use in telecommunication equipment. We have carried out a similar investigation for the contribution of semiconductor devices to productivity growth in computer equipment (Jang and Norsworthy 1988). In that case, however, the prior quality adjustment of computer industry output for improved performance left large unexplained total factor productivity growth.
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Jang, SL., Norsworthy, J.R. (1991). Productivity Growth and Technological Change in the United States Telecommunications Equipment Manufacturing Industries. In: Crew, M.A. (eds) Competition and the Regulation of Utilities. Topics in Regulatory Economics and Policy Series, vol 7. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4048-9_7
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DOI: https://doi.org/10.1007/978-1-4615-4048-9_7
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