It's Not What You Make, It's How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries

44 Pages Posted: 25 Oct 2002  

Tamim Bayoumi

International Monetary Fund (IMF); Centre for Economic Policy Research (CEPR)

Markus Haacker

International Monetary Fund (IMF) - Research Department

Date Written: September 2002

Abstract

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.

Keywords: Technological change, information technology, terms of trade, welfare benefits

JEL Classification: D60, F43, O47, O57

Suggested Citation

Bayoumi, Tamim and Haacker, Markus, It's Not What You Make, It's How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries (September 2002). CEPR Discussion Paper No. 3555. Available at SSRN: https://ssrn.com/abstract=345361

Tamim Bayoumi (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-6333 (Phone)
202-623-4795 (Fax)

Centre for Economic Policy Research (CEPR)

77 Bastwick Street
London, EC1V 3PZ
United Kingdom

Markus Haacker

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-4089 (Phone)
202-589-4089 (Fax)

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