4.3.1Variables at the National Level

The main variables are output, total capital, IT capital, non-IT capital, labor hours and the ratio of IT capital to total capital (IT ratio). Table 4.6 shows the values of these aggregate national variables for each year between 1977 and 1997. The percentage change from the previous year is also given for the output and IT capital variables.

Table 4.6Description of Variables at the National Level

Year	Output	Total Capital	ITCapital	Non-ITCapital	Labor Hours	IT ratio(%)	% Change in Output	% Change in IT Capital
1977	3.55	4.26	0.20	4.06	1.1	4.65	-	-
1978	3.73	4.42	0.22	4.20	1.2	5.02	5.1	12.1
1979	3.85	4.60	0.25	4.35	1.2	5.41	3.2	12.2
1980	3.84	4.76	0.28	4.48	1.2	5.83	-0.3	11.6
1981	3.92	4.93	0.31	4.62	1.2	6.23	2.1	10.4
1982	3.85	5.07	0.33	4.73	1.1	6.57	-1.8	8.5
1983	4.00	5.18	0.36	4.82	1.2	6.95	3.9	8.1
1984	4.32	5.36	0.40	4.97	1.2	7.37	8.0	9.7
1985	4.48	5.57	0.43	5.14	1.3	7.74	3.7	9.1
1986	4.57	5.73	0.47	5.27	1.3	8.11	2.0	7.9
1987	4.74	5.88	0.49	5.39	1.3	8.37	3.7	5.8
1988	5.00	6.03	0.52	5.51	1.3	8.64	5.5	5.9
1989	5.11	6.18	0.55	5.63	1.4	8.93	2.2	6.0
1990	5.13	6.33	0.58	5.75	1.4	9.13	0.4	4.5
1991	5.09	6.42	0.60	5.82	1.3	9.31	-0.8	3.5
1992	5.21	6.51	0.63	5.88	1.4	9.66	2.4	5.4
1993	5.37	6.63	0.67	5.96	1.4	10.13	3.1	6.8
1994	5.66	6.79	0.73	6.06	1.4	10.73	5.4	8.3
1995	5.85	7.00	0.82	6.18	1.5	11.67	3.4	12.2
1996	6.09	7.28	0.95	6.32	1.5	13.09	4.1	16.6
1997	6.39	7.63	1.15	6.48	1.6	15.04	4.9	20.7
Source: Based on BEA. Values for output and capital are in real 1992 trillion of dollars. Hours are in hundreds of billions (rounded to the first decimal). “IT ratio” is IT capital divided by total capital, in percent.

National output rose from 3,550 trillion 1992 dollars in 1977 to 6,390 trillion in 1997, with an average yearly growth rate of 2.8%. In 1980, 1982 and 1991, national output declined in real terms, corresponding to recession periods. On the other hand, the growth rate of IT capital (% change in IT capital) is much more important, averaging a yearly 8.8% growth. However, this rate of growth decreased in the late 1970s, seesawed in the 1980s, was at a bottom value of 3.5% in 1991, and started to increase thereafter. The growth rate of IT capital reached its 1979 value of 12.2% in 1995, and boomed to more than 20% in 1997. The ratio of IT capital to total capital (IT ratio) increased from less that 5% in 1977, to more than 15% in 1997. This is a direct consequence of booming investment in IT since the 1970s, and stresses the growing importance of this type of capital in the economy.