3.2Theoretical Answers to the Productivity Paradox

Since Solow’s famous quip questioning the productive capacity of computers, authors have expended considerable efforts scrutinizing the relationships between information technologies in general and different measures of productivity. Basically, the productivity paradox debate divides the advocates and the opponents of the “new economy,” which is driven by a technological revolution born from the fusion of computing and communication technologies. From the literature originating over this debate, six main hypotheses have been isolated as potential explanations for the productivity paradox: (1) mismeasurement, (2) long learning lags, (3) mismanagement, (4) complementarity, (5) redistribution and (6) small income share. Table 3.1 classifies the literature according to authors’ sensitivity to these hypotheses. This section briefly describes each of these arguments.