Substitutability and Accumulation of Information Technology Capital in U.S. Industries
AbstractThe substitution toward information technology (IT) capital fueled by the rapid decline in IT prices is regarded as an important source of U.S. economic growth. Using data on 41 U.S. industries for the period from 1984 to 1999, this article examines the degree of substitutability between IT capital and other inputs and quantifies the contribution of IT substitution to the accumulation of IT capital per hour worked. Estimates of various elasticities of substitution indicate that IT capital and other factors of production are substitutes. In particular, the substitution of IT capital for other inputs is salient in the industries with less IT capital. Among the sources of IT capital deepening, IT substitution accounts for about 60% of growth in IT capital per hour worked.
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Bibliographic InfoArticle provided by Southern Economic Association in its journal Southern Economic Journal.
Volume (Year): 72 (2006)
Issue (Month): 4 (April)
Find related papers by JEL classification:
- D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
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- Hoxha, Indrit & Kalemli-Ozcan, Sebnem & Vollrath, Dietrich, 2011.
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CEPR Discussion Papers
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- Sebnem Kalemli-Ozcan & Dietrich Vollrath & Indrit Hoxa, 2009. "How Big Are The Gains From International Financial Integration?," 2009 Meeting Papers 143, Society for Economic Dynamics.
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