The Role of Semiconductor Inputs in it Hardware Price Decline: Computers Vs. Communications
42 Pages Posted: 3 Feb 2003
Date Written: August 2002
Abstract
Sharp declines in semiconductor prices are largely responsible for observed declines in computer prices. Although communications equipment also has a large semiconductor content, communications equipment prices do not fall nearly as fast as computer prices. This paper partly resolves the puzzle - first noted by Flamm(1989) - by demonstrating that prices for chips used in communications equipment do not fall nearly as fast as prices for those chips used in computers, and those differences are large enough to potentially explain all of the output price differences.
Keywords: Price indexes, semiconductors, high-tech sector, computer prices, telecommunications prices
JEL Classification: L63, O30, O47
Suggested Citation: Suggested Citation
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