Productivity Optimist

Brad DeLong has yet another interesting post, this time on the productivity outlook. (See his number 2002-03-30)

If it is indeed the case that uses of information technology are growing faster than their prices are declining--perhaps because this is one of the few waves of innovation that are true general-purpose technologies--than the late 1990s are likely to substantially underestimate what future productivity growth is likely to be.

DeLong breezes through several analytical models which all suggest that much of the boost to productivity growth from information technology may still be ahead of us.

Discussion Question. Economics used to be known as the Dismal Science, in part because of what is known as the Law of Diminishing Returns. Is there any reason to believe that we have reached a point of diminishing returns for information technology innovation?