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Shifting Trends in Semiconductor Prices and the Pace of Technological Progress

Shifting Trends in Semiconductor Prices and the Pace of Technological Progress Abstract This paper examines three questions motivated by previous research on semiconductors and productivity growth: Why did semiconductor prices fall so rapidly in the second half of the 1990s? Why has the rate of price decline slowed since 2001? And to what extent are these price swings associated with changes in the rate of advance in semiconductor technology? We show that the price swings are statistically significant and that they reflect changes in both price-cost markups and cost trends. Further analysis indicates that the shift to faster cost declines in the mid-1990s likely corresponded to a speed-up in the pace of advance in semiconductor technology. However, the slower cost declines since 2001 appear not to have been mirrored by a deceleration in technology. Consequently, researchers should be cautious about associating price or cost movements for semiconductors with changes in the pace of underlying technology even over moderately long periods. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Business Economics Springer Journals

Shifting Trends in Semiconductor Prices and the Pace of Technological Progress

Aizcorbe, Ana; Oliner, Stephen D; Sichel, Daniel E
Business Economics , Volume 43 (3): 17 – Jul 1, 2008
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Publisher
Springer Journals
Copyright
2008 National Association for Business Economics
ISSN
0007-666X
eISSN
1554-432X
DOI
10.2145/20080303
Publisher site
See Article on Publisher Site

Abstract

Abstract This paper examines three questions motivated by previous research on semiconductors and productivity growth: Why did semiconductor prices fall so rapidly in the second half of the 1990s? Why has the rate of price decline slowed since 2001? And to what extent are these price swings associated with changes in the rate of advance in semiconductor technology? We show that the price swings are statistically significant and that they reflect changes in both price-cost markups and cost trends. Further analysis indicates that the shift to faster cost declines in the mid-1990s likely corresponded to a speed-up in the pace of advance in semiconductor technology. However, the slower cost declines since 2001 appear not to have been mirrored by a deceleration in technology. Consequently, researchers should be cautious about associating price or cost movements for semiconductors with changes in the pace of underlying technology even over moderately long periods.

Journal

Business Economics – Springer Journals

Published: Jul 1, 2008

Keywords: economics, general; political economy/economic systems; business and management, general

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