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MENTAL MODEL · M2056

Solow Paradox

Solow Paradox
BusinessHigh supportMacroeconomics
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Version 1.0.0 · Updated 2026-07-30

CORE DEFINITION

"You can see the computer age everywhere but in the productivity statistics." It refers to the phenomenon that despite significant advances in IT technology, the growth of total factor productivity (TFP) has not correspondingly surged, and even slowed in some periods. -

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Solow noted that IT is everywhere but not visible in productivity statistics. Reasons include: lag in productivity measurement, IT benefits offset by organizational learning costs, benefits concentrated in unmeasured areas, and the need for complementary reorganization to release benefits. Short-term investments often increase costs before showing results.

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Source support: Explicit

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    en.wikipedia.orghttps://en.wikipedia.org/wiki/Productivity_paradoxZH · Explicit
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