Technological innovation drives productivity which drives economic growth and rising living standards. And the more rapid the increases in the capability of computing equipment, the more rapid the decline in the price of that equipment, given a fixed capability. …

So here’s the problem: Prices for information technology equipment are declining at the slowest pace in over a generation. And to the economic team at JPMorgan, this suggests the pace of technological advance is also slowing. If they’re right, this phenomenon would have a big impact on the US economy and workers. …

The downside here is that a slowdown in price declines has been accompanied by a slowdown in tech investment. And less tech investment, Feroli explains, “means less capital deepening, which could help explain why productivity growth has been soft in recent years.”

But there might be an upside to all this, he argues. Slower gains in technology and productivity, at least for a bit, might make it easier to absorb workers — labor in place of capital — back into the economy.