Information Carrier Technology and Growth

Abstract

We build a novel endogenous growth model incorporating information carrier technology, in which knowledge may be lost during storage and difficult to disseminate, thus hindering innovation. Along the asymptotic balanced growth path, the growth rate of information carrier technology and the population growth rate are substitutes in determining the growth rate of output per capita and the fraction of labor allocated to R&D. Our model also provides a new explanation for the transition from stagnation to growth during the first Industrial Revolution, shedding light on unified growth theory, and helps us understand the core mechanism of the digital economy.

Keywords: Information carrier technology, Unified growth theory, Endogenous growth, Knowledge spillover

JEL Classification: O33, O41, D83, E26