Japan's IT puzzle: Neither a Solow paradox nor a new economy

Research output: Contribution to journalArticle


The purpose of this paper is to examine the impact of information technology (IT) on the Japanese economy. For this purpose, we conduct growth accounting analysis over the last 30 years, reviewing the contribution of information technology to the economic growth. This analysis yields two observations. First, Japan experienced a massive IT investment boom in the late 1980s and resultant productivity surge in both aggregate labor productivity and total factor productivity (TFP). Second, the investment boom, however, ended abruptly in the early 1990s when new types of open-network technology surged throughout the world. Since then the information technology has never contributed the changes of productivity growth. Therefore, it can be concluded that we see neither a “Solow paradox” nor a “new economy” in Japan.
Original languageEnglish
Pages (from-to)22-31
Number of pages10
JournalInfoCom REVIEW
Issue number44
Publication statusPublished - Mar 2008

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)


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