Computers and GDP
The Graph of the Week is from the article "Strengthening Globalization’s Invisible Hand: What Matters Most?" by Thomas F. Siems and Adam S. Ratner, from the October 2006 issue of Business Economics. From the article:
Model II and Figure 4 depict the highly significant relationship between economic growth and computers per 1,000 people (the importance of technology). In today’s global economy, it is important to be connected and able to utilize computers to increase productivity. Modern information and communications systems can connect retailers, warehouses, manufacturers, suppliers, accountants, and financiers instantaneously. Consequently, any activity that can be digitized—including virtually all information flows—can be cheaply moved to anywhere in the world in seconds. The impact of improved computer technologies on global supply chains in recent years has been remarkable: companies are more efficient and competitive; consumers benefit from lower prices; and macroeconomies experience lower inflation, reduced economic volatility, stronger productivity growth, and improved living standards (see Siems (2005)).
NABE members can read the entire article online. There is an abstract available for the public.