Resources for the Future

This paper presents new data on the sources of growth for the U.S. economy over the period 1977-2000. The principal innovation is the incorporation of detailed information for individual industries, including those involved in the production of information technology equipment and software. We show that economic growth is dominated by investments in information technology and highe r education, both for individual industries and the economy as a whole. We also show that a jump in information technology investment, gains in the employment of college-educated workers, and the revival of total factor productivity growth account for the resurgence of the U.S. economy since 1995