Dan Sichel and Steve Oliner conclude that eighty percent of the acceleration in measured productivity growth in the second half of the 1990s is due to information technology investment. Moreover, there are large chunks of the economy in which productivity growth is not well-measured at all. Many of these chunks are ones in which we would expect computer investment to yield substantial gains. However, there are no firm, reliable numbers on the magnitude of official statistics' understatement of productivity growth. There are only guesses.
Businesses today can control their inventories much more effectively.
Interest and storage costs are lower. Stock-outs are less frequent, and less costly. If the reduction in inventories made possible by modern information and communications technologies is close to reaching its limit, then we can expect that one consequence of the new economy is to moderate the inventory-driven portion of the business cycle. Thus the higher the rate of productivity growth, the lower the natural rate of unemployment. If it is correct, the low current natural rate is another benefit that the U.S. is reaping from the new economy.