Edward Conard

Top Ten New York Times Bestselling Author

  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
  • “Unintended Consequences represents the most cogent and persuasive analysis of the Financial Crisis to date.” - Andrei Shleifer, 1999 John Bates Clark Medal Winner
  • “…serious thinking for serious thinkers. …a thought-provoking blueprint for growing middle- and working-class incomes.” - Mitt Romney, former Governor of Massachusetts
  • “Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
Upside of Inequality Oxford Unintended Consequences

AI Summary. Manufacturing productivity growth fell behind other sectors after computer and semiconductor manufacturing productivity, which had grown at roughly 15% and 11% a year, decelerated substantially. The authors also present suggestive evidence that quality improvements are missed in price measures, estimating manufacturing productivity growth is understated by 0.8 percentage points, including 1.7 points for durable goods.

Enghin Atalay, Ali Hortacsu, Nicole Kimmel and Chad Syverson Working Paper
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Almost all measured productivity growth in US manufacturing since 1987 was in Computer and Electronic Products, but true TFP growth may be underestimated by 1.7pp in durables overall (and by 0.4pp in nondurables) due to quality improvements.

Why has manufacturing productivity growth fallen behind other sectors?

Core argument: Computer manufacturing total factor productivity grew about 15% per year and semiconductor manufacturing TFP more than 11% per year between 1987 and 2009, with both decelerating substantially by the early 2010s, which the authors link to manufacturing's lagging productivity growth.

In the late 2000s, manufacturing productivity growth started to fall behind productivity growth elsewhere. The first half of the article documents that these trends can be explained by the resolution of the ICT revolution. Between 1987 and 2009, Computer manufacturing TFP grew by an astronomical 15% per year. Semiconductor manufacturing TFP grew by more than 11% per year. By the early 2010s, productivity growth in these industries had decelerated substantially. We then marshal suggestive evidence that quality improvements and, by implication, productivity growth may be substantially underestimated [not only in computers and electronics, but] in durable goods manufacturing [overall]. Annual price changes of durable goods are 2.6 percentage points greater when using gross output deflators and import price indices than when using PCE price indices in computers and other electronic goods. Using BEA Input-Output matrices, we find that manufacturing TFP growth (from 1997 to 2023) is understated by 0.8 percentage points: 1.7 percentage points for durable goods industries and 0.4 percentage points for nondurable goods manufacturing industries.

Takeaways by Macro Roundup® AI

  1. Computer manufacturing total factor productivity grew about 15% per year and semiconductor manufacturing TFP more than 11% per year between 1987 and 2009, with both decelerating substantially by the early 2010s, which the authors link to manufacturing's lagging productivity growth.
  2. Using BEA Input-Output matrices, the authors estimate manufacturing TFP growth from 1997 to 2023 is understated by 0.8 percentage points, comprising 1.7 points for durable goods industries and 0.4 points for nondurable goods manufacturing.
  3. Annual price changes for computers and other electronic goods are 2.6 percentage points greater under gross output deflators and import price indices than under PCE price indices, which the authors offer as suggestive evidence that quality improvements are underestimated.

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