Why hasn't the Internet helped the American economy grow as much as economists thought it would?
By Annie Lowrey
If you have attended any economists' cocktail parties in the past month or so—lucky you!—then you have probably heard chatter about Tyler Cowen's e-book, The Great Stagnation. The book seeks to explain why in the United States median wages have grown only slowly since the 1970s and have actually declined in the past decade. Cowen points to an innovation problem: Through the 1970s, the country had plenty of "low-hanging fruit" to juice GDP growth. In the past 40 years, coming up with whiz-bang, life-changing innovations—penicillin, free universal kindergarten, toilets, planes, cars—has proved harder, pulling down growth rates across the industrialized world.
But wait! you might say. In the 1970s, American businesses started pumping out amazing, life-changing computing technologies. We got graphing calculators, data-processing systems, modern finance, GPS, silicon chips, ATMs, cell phones, and a host of other innovations. Has the Internet, the most revolutionary communications technology advance since Gutenberg rolled out the printing press, done nothing for GDP growth? The answer, economists broadly agree, is: Sorry, but no—at least, not nearly as much as you would expect...[continued]
