Arnold Kling

The Pessimist

Arnold Kling, Great Questions of Economics
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Ilkka Tuomi makes a number of points concerning Moore's Law.

Strictly speaking there is no such Law. Most discussions that quote Moore's Law are historically inaccurate and extend its scope far beyond available empirical evidence. Indeed, sociologically Moore's Law is a fascinating case of how myths are manufactured in the modern society and how such myths rapidly propagate into scientific articles, speeches of leading industrialists, and government policy reports around the world.

He points out that there are various formulations of Moore's Law. Moreover, regardless of which formulation one uses--"the number of transistors on a chip will double every eighteen months" or "the cost of computing will halve every eighteen months" or another formulation--the data tend to show a greater doubling time, perhaps closer to three years. For long term predictions, such as those made by Ray Kurzweil, that difference in doubling time is very significant.

At another level, Tuomi argues against treating improvements in computing as exogenous manna from a technological heaven. Instead, he argues that they are a response to demand forces.

Discussion Question. The effect of computers on overall productivity growth is the product of the rate of productivity growth in computers and the share of computers in the economy. For example, if productivity growth in computers is 20 percent per year and the share is 6 percent, then they contribute 1.2 percentage points to productivity growth. Will the share rise or fall over the next decade, and how does your answer affect the productivity outlook?

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