The Role of Semiconductor Inputs in it Hardware Price Decline: Computers Vs. Communications

42 Pages Posted: 3 Feb 2003

See all articles by Ana M. Aizcorbe

Ana M. Aizcorbe

U.S. Bureau of Economic Analysis (BEA)

Kenneth Flamm

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

Anjum Khurshid

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs

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

Aizcorbe, Ana M. and Flamm, Kenneth and Khurshid, Anjum, The Role of Semiconductor Inputs in it Hardware Price Decline: Computers Vs. Communications (August 2002). Available at SSRN: https://ssrn.com/abstract=333601 or http://dx.doi.org/10.2139/ssrn.333601

Ana M. Aizcorbe (Contact Author)

U.S. Bureau of Economic Analysis (BEA) ( email )

1441 L Street NW
Washington, DC 20910
United States

Kenneth Flamm

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States
512-471-8952 (Phone)
512-471-1835 (Fax)

Anjum Khurshid

University of Texas at Austin - Lyndon B. Johnson School of Public Affairs ( email )

2300 Red River St., Stop E2700
PO Box Y
Austin, TX 78713
United States
512-471-0201 (Phone)
512-471-1835 (Fax)

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