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Ingredients for the New Economy: How Much does finance matter?

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Author Info

  • Matteo Bugamelli

    ()
    (Bank of Italy, Economic Research Department)

  • Patrizio Pagano

    ()
    (Bank of Italy, Economic Research Department)

  • Francesco Paternò

    ()
    (Bank of Italy, Economic Research Department)

  • Alberto Franco Pozzolo

    ()
    (Bank of Italy, Economic Research Department)

  • Fabiano Schivardi

    ()
    (Bank of Italy, Economic Research Department)

  • Salvatore Rossi

    ()
    (Bank of Italy, Economic Research Department)

Abstract

Both macro and (still scarce) micro evidence support the idea that a new economy is emerging in the US, not (yet) in Europe. Some have argued that the inadequacies of EuropeÂ’s financial system are an important part of the explanation. This paper, after surveying the existing literature on the new productive paradigm and on the related financial aspects, both in the US and in Europe (in Italy in particular), claims that financing the new economy has more to do with traditional firms investing in ICT than with the creation of new firms in ICT-producing sectors. Saying that finance is a major obstacle in Europe to the development of the new economy may be an overstatement, though countries, like Italy, where the average size of firms is small are probably facing specific difficulties.

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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 418.

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Date of creation: Oct 2001
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Handle: RePEc:bdi:wptemi:td_418_01

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Keywords: growth accounting; information and communication technologies; firm organization; human capital; financing policies.;

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Cited by:
  1. Mauro Napoletano & Domenico Delli Gatti & Giorgio Fagiolo & Mauro Gallegati, 2005. "Weird Ties? Growth, Cycles and Firm Dynamics in an Agent-Based Model with Financial-Market Imperfections," LEM Papers Series 2005/03, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  2. Chiara Oldani, 2005. "L'impatto della New Economy sull'attività bancaria italiana: un'analisi qualitativa," Finance 0504001, EconWPA.
  3. Domanski, Dietrich, 2003. "Idiosyncratic Risk in the 1990s: Is It an IT Story?," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Roberta Zizza, 2002. "Forecasting the industrial production index for the euro area through forecasts for the main countries," Temi di discussione (Economic working papers) 441, Bank of Italy, Economic Research and International Relations Area.

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