There has been a revival of interest in the problem of how to handle embodied technical progress with the information revolution, and the development of quality adjusted
computer price indices.
Quality Adjustment to
Computer Prices: The Role of Durability and Changing Software" pp.
While the trimmed measure still strips out gasoline the majority of the time, it also strips out the price of goods that fall the most, like
computer prices, leaving a more balanced measure.
Computers, after all, were invented in the 1940s, computer sales have been growing at a rapid rate since the 1950s, and academic studies seem to show
computer prices falling at roughly 20 percent annual rates of decline since the early 1950s.
Computer prices may have continually come down in terms of today's real dollars, but there are many people spread throughout our community who cannot afford them.
From 1959 to 2000, the GDP price deflator rose 3.9 percent per year, while
computer prices fell 19.3 percent per year.
While discounts in
computer prices -- up to 40 percent in some cases -- may help fuel consumer sales, businesses are wary of making major investments in outdated technology, regardless of the low prices.
* "A Note on the Impact of Hedonics and Computers on Real GDP," which reviewed the data on hedonic price indexes and their impact on real GDP growth and concluded that there was no evidence of an overstatement in the measured decline of
computer prices. [December 2000]
The difference reflects the historically low relative price of capital goods in the UK and is clearly affected by falling
computer prices. [3]
The rise of microchip power and fall in
computer prices have ushered in what some analysts call the next stage in engineering technology--greater and better visualization capabilities.
Computer prices are at a historic low and continue to fall, while computer power continues to increase dramatically.
