It's Not What You Make, It's How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries
International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)
International Monetary Fund (IMF) - Research Department
CEPR Discussion Paper No. 3555
This Paper analyses the welfare benefits from falling relative prices of IT (Information Technology) goods across a wide range of countries. Using two separate methodologies and datasets, we find that welfare benefits mainly accrue to users of IT, not their producers, because of falling relative prices. This is important, as IT production and use are highly differentiated across countries, and implies that earlier work on how IT production affects real GDP, while useful in calibrating the overall benefits of the IT revolution, are a less valuable way of assessing the distribution of benefits.
Number of Pages in PDF File: 44
Keywords: Technological change, information technology, terms of trade, welfare benefits
JEL Classification: D60, F43, O47, O57
Date posted: October 25, 2002
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