Information technology and U.S. productivity growth: evidence from a prototype industry production account

The rapid productivity growth in the US during the Information Age, prior to the dot‐com bust in 2000, and the large contribution of the IT producing sector, is well known. Less known are the sources of the surprisingly rapid TFP growth during the slow growth period after 2000. We construct an account of US economic growth by aggregating over detailed industries using a new data set based on the NAICS classification. We find that, post 2000, TFP originating from the IT‐Producing sector decelerated relative to the IT boom, but still accounted for 40% of aggregate productivity growth. This deceleration was counterbalanced by the contribution from IT‐Using sectors, which buoyed aggregate TFP growth to almost the same rate as the 1995–2000 period. For aggregate GDP, the contributions to the growth rate of 2.8% during 2000–2007 were: capital input (1.7% points), labor input (0.4) and TFP (0.7).