On the Relationship between Telecommunications Investment and Economic Growth in the United States

Telepolicy Working Paper

6 Pages Posted: 7 Aug 2003

See all articles by Richard O. Beil

Richard O. Beil

Auburn University - Harbert College of Business

George S. Ford

Phoenix Center for Advanced Legal & Economic Public Policy Studies

John D. Jackson

Auburn University - Department of Economics

Date Written: June 2003

Abstract

Using a time series of fifty years, the relationships between investment by telecommunications firms and Gross Domestic Product in the United States are examined. Granger-Sims causality tests are conducted, with proper allowance for both the non-stationarity of the data and lag length. These tests indicate that investment by telecommunications firms is caused by, but does not cause, economic activity, and the findings are robust across lag lengths. The evidence suggests that policies aimed at stimulating the U.S. economy by accelerating investment in the telecommunications sector may not be successful.

Keywords: telecommunications, investment, causality, granger, 1996 Telecommunications Act, unbundling, economic growth, recession, policy

JEL Classification: L5, L9, O4

Suggested Citation

Beil, Richard O. and Ford, George S. and Jackson, John Douglas, On the Relationship between Telecommunications Investment and Economic Growth in the United States (June 2003). Telepolicy Working Paper. Available at SSRN: https://ssrn.com/abstract=422521 or http://dx.doi.org/10.2139/ssrn.422521

Richard O. Beil

Auburn University - Harbert College of Business ( email )

415 Magnolia Ave.
Auburn, AL 36849
United States

George S. Ford (Contact Author)

Phoenix Center for Advanced Legal & Economic Public Policy Studies ( email )

5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
United States

John Douglas Jackson

Auburn University - Department of Economics ( email )

415 W. Magnolia
Auburn, AL 36849-5242
United States

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