Information and Communication Technology as Technical Change in Matching and Production
AbstractIn this paper we integrate two workhorse models in economics: The monopolistic competition model of Dixit and Stiglitz and the search unemployment model of Pissarides. Information and communication technology (ICT) is interpreted as i) technical progress in the matching function of the Pissarides labour market search model where it is increasing the probability of filling a vacancy, and ii) as technical change in the production function of the Dixit-Stiglitz goods market model where it is increasing fixed costs and decreasing variable costs. All effects together, modelled as a permanent once-and-for-all ICT shock, increase the vacancy/ unemployment ratio, decrease the long-run equilibrium unemployment rate, and increase wages.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 79 (2003)
Issue (Month): 3 (07)
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ICT; monopolistic competition; unemployment; O33; E13; E24;
Other versions of this item:
- Ziesemer,Thomas, 2002. "ICT as Technical Change in the Matching and Production Functions of a Pissarides-Dixit-Stiglitz model," Research Memorandum 022, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- Ziesemer,Thomas, 2001. "ICT as Technical Change in the Matching and Production Functions of a Pissarides-Dixit-Stiglitz model," Research Memorandum 024, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
- E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution
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