For those of you dealing with productivity in micro or growth in macro I have something for you. And if you already passed either or both, file it for next time. Annie Lowrey has a very thought-provoking piece at Slate. (HT to Marginal Revolution.)
She asks why the internet hasn't turned out to be the great technological boost to growth and productivity that we thought it would be. She also puts it another way: if it is, why can't we measure the effect? How would you measure the computer surplus on most internet content. Can we adequately describe "willingness to pay" until there's actually a charge? I suspect we will find out as more and more content becomes subscriber-access. But the point is there will still remain a good deal that's free. And what is the value of that content - what is the consumer surplus for the user?
Lowrey points out that a lot of older technology had a much bigger measurable impact on GDP - things like planes, trains and automobiles. And everyone thought computers were going to create a huge productivity boom and usher in an era of structural change. (Oddly enough, they seem to have had the most impact in the manufacturing sector - helping us make more stuff at lower cost.) Why did those technological breakthroughs translate into workplace productivity enhancements - saving money and lowering prices?
I'm not sure what the answer is for her question. Excuse me now…I have to get back to my game of minesweeper.