Robert Gordon asked whether the 1990s tech boom really measured up to earlier periods of productivity growth, in a Journal of Economic Perspectives article.
The paper looks at the growth of the US economy during the tech boom of the late 1990s. It talks about the rise of the computer age, calling it the "New Economy," and questions whether the productivity growth during that time really matched up with earlier economic booms like the First Industrial Revolution (1760-1830) and the Second one powered by electricity (1860-1900).
Between 1995 and 1999, the data looked great with output, growth, and productivity all increasing. It almost looked like we were heading into another golden age, maybe even a Third Industrial Revolution. But the author argues that growth from computers didn't spread throughout the whole economy. In earlier periods, productivity growth came from investment and infrastructure that changed everything. Computers started to show diminishing returns, and the impact during the 90s was limited to leisure and parts of manufacturing.
The article makes an interesting point, but hindsight really changes how we see it. Reading this in 2025, it's obvious the author couldn't have known how far the internet would go and how it would shape globalization, communication, and basically every part of daily life. I understand where he was coming from because at the time, the computer industry didn't seem revolutionary like electricity or printing. If the internet had stayed small and stuck to manufacturing, I would probably still agree with him. But the influence of the internet went way beyond what anyone expected.
In today's context, I would frame this question in terms of AI. Everyone is calling it the next big thing, and it's similar to the reading because right now we don't know how far AI will go. I wonder if it will reshape certain industries or the whole economy. People and companies who specialize in AI are becoming very rich. On the other hand, we constantly hear that AI will take people's jobs and lead to universal basic income. Will it only drive up wealth for a small group of people? Does replacing people count as growth, or is it hurting the economy by cutting wages and spending power?
These are complex questions, especially because it's such a new technology and we don't know the extent of AI yet. I think it's worth exploring with data on which industries use AI, productivity changes, jobs, and unemployment rates. That would help us see how AI is being adopted and whether it's a real turning point or just another hype cycle.