By Catherine L. Mann, the Institute for International Economics, June 2006

“. . . essential reading for CEOs, students, and policymakers. This book goes beyond the hype, anecdotes, and political rhetoric by mining the critical data underlying the central phenomena of globalization."

Information technology (IT) was key to the superior overall macroeconomic performance of the United States in the 1990s—high productivity, high growth, low inflation, and low unemployment. But IT also played a role in increasing earnings dispersion in the labor market—greatly rewarding workers with high education and skills. This US performance did not happen in a global vacuum. Globalization of US IT firms promoted deeper integration of IT throughout the US economy, which in turn promoted more extensive globalization in other sectors of the US economy and labor market.

How will the increasingly globalized IT industry affect US long-term growth, intermediate macro performance, and disparities in the US labor market? What policies are needed to ensure that the United States remains first in innovation, business transformation, and education and skills, which are prerequisites for US economic leadership in the 21st century? This book traces the globalization of the IT industry, its diffusion into the US economy, and the prospects and implications of more extensive technology-enabled globalization of products and services.

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Book Contents (PDFs):

Preface

Executive Summary

Acknowledgments

1. Accelerating Globalization: Why Focus on Information Technology?

2. Linkages Between US Firms and Global Markets for IT Products

3. Globalization and IT Prices, Diffusion, and Productivity

4. Information Technology, Outsourcing, and the New International Trade in Services

5. Information Technology and Labor Markets

6. Globalization of Innovation

7. A Look Forward with a Policy Agenda

Appendix A: Methodology and Definitions

References

Index

About the Author:

Catherine L. Mann, Senior Fellow at the Institute since 1997, held several posts at the Federal Reserve Board of Governors (1984and 1989, including assistant director and special assistant to the staff director, International Finance Division (1994. She was a senior economist on the staff of the Presidentouncil of Economic Advisers (1991, the principal staff member for the chief economist of the World Bank (19889), and a Ford Foundation fellow at the National Bureau of Economic Research (1987). She is an adjunct professor at the Owen School of Management at Vanderbilt University and has also taught at the University of Chicago, Princeton University, University of Maryland, Georgetown University, Boston College, and MIT. She is author or coauthor of APEC and the New Economy (2002), Global Electronic Commerce: A Policy Primer (2000), and Is the U.S. Trade Deficit Sustainable? (1999).

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