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Information technologies, embodiment and growth

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  • Boucekkine, Raouf
  • de la Croix, David

Abstract

This paper studies the conditions under which an IT revolution may occur and have permanent effects on long-term growth. To this end, we construct a multi-sectoral growth model with endogenous embodied technical progress. The R&D sector expands the range of softwares. The capital sector produces efficient capital combining hardware with available softwares. Technological progress is therefore embodied: New softwares can only be run on the most recent generations of hardware. The new softwares are copyrighted during a fixed period of time. First, we analytically characterize the balanced growth paths of the model. Then we focus on the dynamic response of the economy to technological shocks. Substitution effects favorable to the IT sectors are shown to arise when positive supply shocks affect the production of efficient capital and/or the creation of new softwares. Positive shocks specific to the capital sector are unable to produce effects on long-term growth, in contrast to the shocks specific to the R&D sector.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Dynamics and Control.

Volume (Year): 27 (2003)
Issue (Month): 11-12 (September)
Pages: 2007-2034

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Handle: RePEc:eee:dyncon:v:27:y:2003:i:11-12:p:2007-2034

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  1. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-62, June.
  2. Boucekkine, Raouf & del Rio, Fernando & Licandro, Omar, 2000. "A Schumpeterian Vintage Capital Model: An Attempt at Synthesis," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000023, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  11. Raouf BOUCEKKINE & David DE LA CROIX & Yiannis VAILAKIS, 2002. "Technological Shocks and IT Revolutions," Discussion Papers (REL - Recherches Economiques de Louvain) 2002015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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Citations

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Cited by:
  1. De, Supriyo, 2014. "Intangible capital and growth in the ‘new economy’: Implications of a multi-sector endogenous growth model," Structural Change and Economic Dynamics, Elsevier, vol. 28(C), pages 25-42.
  2. Chatelain, Jean-Bernard & Ralf, Kirsten & Amable, Bruno, 2010. "Patents as Collateral," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 1094-1104.
  3. Yu. Yatsenko & N. Hritonenko, 2007. "Network economics and optimal replacement of age-structured IT capital," Computational Statistics, Springer, vol. 65(3), pages 483-497, June.
  4. Keiichi Kishi, 2013. "Dynamic analysis of wage inequality and creative destruction," Discussion Papers in Economics and Business 13-20, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  5. BOUCEKKINE, Raouf & DE LA CROIX, David & VAILAKIS, Yiannis, . "Technological shocks and IT revolutions," CORE Discussion Papers RP -1646, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  6. Mattalia, Claudio, 2013. "Embodied technological change and technological revolution: Which sectors matter?," Journal of Macroeconomics, Elsevier, vol. 37(C), pages 249-264.
  7. Mauro Bambi & Omar Licandro, 2011. "Endogenous Growth and Wave-Like Business Fluctuation," Working Papers 533, Barcelona Graduate School of Economics.
  8. Mattalia, Claudio, 2012. "Human capital accumulation in R&D-based growth models," Economic Modelling, Elsevier, vol. 29(3), pages 601-609.

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