ICT Diffusion and Potential Output Growth
26 Pages Posted: 19 Dec 2010
Date Written: April 2004
The sustained increase in productivity gains from the spread of ICTs may increase potential output growth in the medium to long term via capital deepening effects and total factor productivity (TFP) gains, and in the short to medium term via the lagged adjustment of wages to productivity gains. The orders of magnitude resulting from the assessment data presented indicate that the medium to long-term effect could be significant. However, there does not appear to be any empirical evidence to support the existence of the temporary short to medium-term effect.
Keywords: Growth, potential output growth, ICT, investment, new economy
JEL Classification: O3, O4
Suggested Citation: Suggested Citation