The question of why US productivity seems to have stagnated since the 1970s, the same period in which information technology has exploded and was supposed to re

The question of why US productivity seems to have stagnated since the 1970s, the same period in which information technology has exploded and was supposed to revolutionize everything is known as the "Productivity Paradox". The key article in this area is http://ccs.mit.edu/papers/CCSWP130/ccswp130.html http://ccs.mit.edu/papers/CCSWP130/ccswp130.html . You can also look at the Wikipedia article, but be warned that it's kind of a mishmash: http://en.wikipedia.org/wiki/Productivity_paradox http://en.wikipedia.org/wiki/Productivity_paradox The Productivity Paradox is a highly controversial subject with no solid answers. Four main explanations are: 1) Mismeasurement of outputs and inputs. That is, productivity measurements are not showing the "real" state of productivity. In particular, quality improvements don't show up in the statistics. 2) Lags due to learning and adjustment. That is, just like it took industry a long time to make full use of electricity, productivity improvements from computer technology will take time. 3) Redistribution and dissipation of profits. E.g. Amazon makes a lot more money, local bookstores lose money, and the economy as a whole breaks even. 4) Mismanagement of information and technology. That is, the investment in computers is just a waste of money. The first two explanations are the "optimistic" ones in the sense that technology does in fact benefit the economy, while the last two are the "pessimistic" explanations, that technology isn't helping.