Shifting Trends In Semiconductor Prices And The Pace Of Technological Progress

This paper examines three questions motivated by previous research on semiconductors and productivity growth: Why did semiconductor prices fall so rapidly in the second half of the 1990s, why has the rate of price decline slowed since 2001, and to what extent are these price swings associated with changes in the rate of advance in semiconductor technology? The author shows that the price swings are statistically significant and that they reflect changes in both price-cost markups and cost trends.