How does computer advancement affect the economy

New technologies, such as 5G telecommunications, self-driving vehicles and mRNA-based drugs and vaccines, have the potential to shape our future. Anticipation of their impact may already be affecting the economy today.

How can news about future technologies affect the economy? How can we measure the effect of productivity news shocks? Since there are many ways to measure news shocks, do they have consistent implications?

Where can I find out more? Overview article about news shock driven business cycles. Evidence on the effects of productivity news shocks on inflation and consumer confidence.

Information on the international transmission of technology news shocks. Who are experts on this question? Recent Questions. Do you have a question surrounding any of these topics? Or are you an economist and have an answer? Ask a Question OR. Funded By. Contributing organisations. What are the backward linkages of industrial diversification on the local capacity to create patents and scientific papers?

Which occupations are key to facilitate the diffusion of industries to particular locations and what are the educational profiles of those occupations?

What is the role of human mobility and the attraction of talent in the successful development of STI? To sum up, this study group pursues three purposes:. As the situation continues to change rapidly, our top priority remains the health, safety, and well-being of our community, on and off campus. We are planning for several contingency scenarios and taking decisive, informed action to limit the spread of COVID while ensuring the continuity of our teaching and research mission.

The University and our programs remain open and operational with appropriate measures to protect the health of the community. Harvard University, the Faculty of Arts and Sciences and Harvard Departments, Schools and various Centers regularly issue updates to the community in order to keep you informed of additional measures.

Flowers in the software industry have bloomed prolifically. Once upon a time there were a few large vendors; now thousands and thousands of small vendors are in business.

Imagination and initiative have soared in consequence. But quality may have been compromised -- not necessarily by neglect but perhaps because matters have become too complex for anyone to fathom fully.

Thus, for example, one high-level computer language works with DOS and Windows but not with Windows A certain well-known Fortran compiler for Windows95 works flawlessly -- but if you try to execute a program it has compiled, it will tell you that it may not execute correctly in DOS mode and will ask whether you want it to produce a proper DOS version.

If you reply no and execute anyway, it works; if you say yes, it bombs. And it would be interesting to know how many person-hours and billions of dollars will have been spent by December 31, , on fixing the "year problem" that affects a vast number of computer programs. Interdependence can be hazardous.

Not long ago most of us worked on freestanding computers; now virtually everything is networked. This development has been mostly to the good. It has paved the way, for example, for enormous advances in information transfer and processing.

But being linked to seemingly everyone by far fewer than six degrees of separation has its dark side. A decade ago a clever hacker prepared a computer "worm" in the form of a Christmas greeting, which he sent by E-mail over IBM's worldwide message network. Recipients, upon opening the mail, would see a cute little Christmas tree displayed on the screen. Unbeknownst to them, however, the E-mail also interrogated their E-mail address books.

It then duplicated itself the requisite number of times and sent itself to each address. At these new destinations it repeated the process. Within a few hours the network was so badly overloaded that it was almost brought to a halt. Three additional reasons pertain to economists' bread-and-butter concern: the efficient use of resources. Inappropriate pricing. Information is valuable; thus it makes sense for the creators of databases and the providers of access to databases to charge for their use.

But the marginal cost of providing access to a database is very close to zero; hence the socially optimal price charged for such access should also be very close to zero. But at such a low price the initial investment cannot be recouped; even operating costs may not be recoverable. Hence database access is typically sold at prices higher than marginal cost, which introduces monopoly elements into the industry and makes the use of information resources less intensive than it would be under competitive pricing.

In the case of the Internet, even getting an effective pricing system up and running has proved daunting. But here an opposite problem has arisen: the price charged for Internet access is often zero, so the resource is grotesquely overused. The result is that congestion on the information superhighway at rush hours rivals congestion on conventional highways. If things don't improve, Yogi Berra's aphorism may soon apply: The place is so crowded that nobody goes there any more.

Games people play. Many of the resources made available by information technology provide amusement but have no visible impact on productivity. In fact, some of the fun may come at the expense of productivity. Aimless surfing of the Internet, social exchange over chat lines, membership in endless listservs, and computer games are all fun, but they probably reduce rather than enhance business productivity.

And we have not even mentioned junk E-mail. Information overload. Improvements in information technology are, of course, designed to get more and more information to more and more people more and more rapidly. To a truly remarkable extent the information revolution has achieved this goal -- and progress continues unabated. Now ask yourself a question: How often do you feel that the sheer quantity -- not the quality, mind you, but the quantity -- of information reaching you is insufficient?

Speaking for ourselves, we receive by conventional paper means alone far more information than we can possibly process. Often electronic transmissions just add to the glut.

Computers may work a million times as fast as they did a human generation ago, but the information-processing capabilities of the human brain have undergone no such technological revolution. In truth, most people now spend a significant amount of time just sifting through the information that bombards them each day.

Search engines are an apt modern metaphor for the information-overload problem. How many times have you searched for a combination of words, only to be told that your machine has found 19, matches for you to inspect? But it's become harder to keep up with those changes lately, as new technologies have diffused through workplaces in ways that statisticians still don't fully understand. That mismeasurement could be part of the reason why growth numbers have been disappointing in recent years.

If federal agencies haven't been able to capture all new economic activity, that's a lot less concerning than the idea that America is really becoming a less dynamic nation. Take the discrepancies that BEA corrected for in cell phones and cloud computing. Both came to the agency's attention through the work of three economists at the Federal Reserve, who didn't think the enormous investments being made by tech companies after were showing up in the official growth numbers.

After speaking with big tech companies and digging into data the BEA already had, Corrado and fellow Federal Reserve economists Daniel Sichel and David Byrne concluded that what looked like purchases of manufacturing components was actually investment in huge data centers for cloud storage, which packs more of a punch in GDP calculations.

Related: How the US economy is doing now in four charts. Byrne and Corrado also developed new measurements of cell phone prices , which accounted for rapid increases in power and quality. That boosted growth as well — showing that Internet and communications technology really are contributing to the economy in ways that hadn't been fully realized. The tech industry itself has been saying this for years.