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Economic Growth of Japan and the United States in the Information Age

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  • Dale W. Jorgenson
  • Kazuyuki Motohashi

Abstract

In this paper we compare sources of economic growth in Japan and the United States from 1973 through 2000, 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 contribution of information technology to economic growth was strikingly similar in Japan and the United States in the last half of the 1990's. The growth rate of the Japanese economy declined drastically in the early 1990's, but revived modestly during the last half of the decade. In this period the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply and the rate of total factor productivity growth increased. However, the contributions of labor input and other sources of growth in Japan lagged far behind those in the United States.

Suggested Citation

  • Dale W. Jorgenson & Kazuyuki Motohashi, 2003. "Economic Growth of Japan and the United States in the Information Age," Discussion papers 03015, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:03015
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    References listed on IDEAS

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    4. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: U.S. Economic Growth in the Information Age," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
    5. Dale W. Jorgenson & Kun-Young Yun, 2002. "Investment, Volume 3: Lifting the Burden: Tax Reform, the Cost of Capital, and U.S. Economic Growth," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262100916, December.
    6. Dale Jorgenson & Kun-Young Yun, 2003. "Lifting the burden: fundamental tax reform and US economic growth," Chapters, in: Paul Butzen & Catherine Fuss (ed.), Firms’ Investment and Finance Decisions, chapter 1, pages 13-39, Edward Elgar Publishing.
    7. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Growth of US Industries and Investments in Information Technology and Higher Education," NBER Chapters, in: Measuring Capital in the New Economy, pages 403-478, National Bureau of Economic Research, Inc.
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    Citations

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    Cited by:

    1. Jorgenson, Dale W., 2005. "Les technologies de l’information et les économies du G7," L'Actualité Economique, Société Canadienne de Science Economique, vol. 81(1), pages 15-45, Mars-Juin.
    2. Keiko Ito & Kyoji Fukao, 2005. "Physical and Human Capital Deepening and New Trade Patterns in Japan," NBER Chapters, in: International Trade in East Asia, pages 7-52, National Bureau of Economic Research, Inc.
    3. Kobayashi, Keiichiro, 2007. "Payment Uncertainty And The Productivity Slowdown," Macroeconomic Dynamics, Cambridge University Press, vol. 11(2), pages 231-248, April.
    4. Keiichiro Kobayashi, 2006. "Payment uncertainty, the division of labor, and productivity declines in great depressions," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(4), pages 715-741, October.
    5. Kyoji Fukao & Tomohiko Inui & Hiroki Kawai & Tsutomu Miyagawa, 2004. "Sectoral Productivity and Economic Growth in Japan, 1970-98: An Empirical Analysis Based on the JIP Database," NBER Chapters, in: Growth and Productivity in East Asia, pages 177-228, National Bureau of Economic Research, Inc.
    6. Robert L. Clark & Naohiro Ogawa & Makoto Kondo & Rikiya Matsukura, 2010. "Population Decline, Labor Force Stability, and the Future of the Japanese Economy," European Journal of Population, Springer;European Association for Population Studies, vol. 26(2), pages 207-227, May.
    7. Escudero, Verónica & López Mourelo, Elva, 2012. "Improving Competitiveness and Fostering Productivity in Spain/Mejorar la competitividad y fomentar la productividad en España," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 30, pages 105-136, Abril.
    8. JORGENSON Dale W. & MOTOHASHI Kazuyuki, 2004. "Potential Growth Of The Japanese And U.S. Economies In The Information Age," ESRI Discussion paper series 088, Economic and Social Research Institute (ESRI).
    9. Miyagawa, Tsutomu & Ito, Yukiko & Harada, Nobuyuki, 2004. "The IT revolution and productivity growth in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 18(3), pages 362-389, September.
    10. David Natali, 2009. "The Lisbon strategy a decade on: a critical review of a multi-disciplinary literature," Transfer: European Review of Labour and Research, , vol. 15(1), pages 111-137, February.
    11. Shuzo Ueda & Kazuo Ogawa, 2012. "On the cost-reducing effects of embodied technical progress: a panel study of the steel industry in Japan," Journal of Productivity Analysis, Springer, vol. 37(2), pages 141-153, April.
    12. Ito, Keiko & 伊藤, 恵子 & イトウ, ケイコ & Fukao, Kyoji & 深尾, 京司 & フカオ, キョウジ, 2003. "Vertical Intra-Industry Trade and the Division of Labor in East Asia," Discussion Paper Series a444, Institute of Economic Research, Hitotsubashi University.
    13. repec:esj:esridp:88 is not listed on IDEAS
    14. B.K. Atrostic & Kazuyuki Motohashi & Sang Nguyen, 2008. "Computer Network Use and Firms' Productivity Performance: The United States vs. Japan," Working Papers 08-30, Center for Economic Studies, U.S. Census Bureau.

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