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Studying general purpose technologies in a multi-sector framework: The case of ICT in Denmark

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  • Strohmaier, R.
  • Rainer, A.

Abstract

General purpose technologies (GPTs) are technical breakthroughs that are able to spur and sustain growth via their pervasive use in the economy. This paper attempts to study the effects of these innovations for the economic system on a theoretical and empirical level. First, an input–output approach is combined with the replicator dynamics of evolutionary game theory, in order to give a rationale how the adoption of an innovation at the firm level leads to a changing production mode at the industry level. Subsequently, a structural decomposition analysis for Denmark from 1966 to 2007 tracks the impact of the current GPT, the information and communication technologies (ICT), on aggregate and sectoral labor productivity growth. Findings show that the broad diffusion of ICT affected growth significantly only after 2000, owing to technical change, substitution and capital deepening, and can be associated with skill-induced wage dispersion.

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  • Strohmaier, R. & Rainer, A., 2016. "Studying general purpose technologies in a multi-sector framework: The case of ICT in Denmark," Structural Change and Economic Dynamics, Elsevier, vol. 36(C), pages 34-49.
    • Handle: RePEc:eee:streco:v:36:y:2016:i:c:p:34-49
    DOI: 10.1016/j.strueco.2015.10.003
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    More about this item

    Keywords

    General purpose technologies; Structural decomposition analysis; ICT; Evolutionary economics; Labor productivity;
    All these keywords.

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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