Information and Communication Technologies in a Multi-Sector Endogenous Growth Model
CERGE-EI Working Paper No. 386
61 Pages Posted: 24 Jun 2009
There are 2 versions of this paper
Information and Communication Technologies in a Multi-Sector Endogenous Growth Model
Date Written: May 1, 2009
Abstract
This paper investigates the growth impact of Information and Communication Technologies (ICT) in an economy consisting of three sectors: ICT-producing, ICT-using, and non-ICT-using. The ICT progress causes falling prices of the consumption and intermediates produced by the ICT-using sector, providing incentives for investment in the sectors using them. Therefore, the non-ICT-using sector benefits indirectly from ICT, while households utility increases. The magnitude of the growth transmission mechanism relies on the ICT-using sector production shares. Aggregate economy is on a constant growth path, where growth rates differ across sectors. The model predictions are broadly consistent with the U.S. growth experience.
Keywords: multi-sector economy, endoegnous growth, constant growth path, information and communication technologies
JEL Classification: O40, O41
Suggested Citation: Suggested Citation
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