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ICT and productivity growth in the United Kingdom

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Nicholas Oulton

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Abstract

This paper develops new estimates of investment in and output of information and communications technology (ICT). These new estimates imply that GDP growth has been significantly understated, particularly since 1994. A growth accounting approach is employed to measure the contribution of ICT to the growth of both aggregate output and aggregate input. On both counts, the contribution of ICT has been rising over time. From 1989 to 1998, ICT output contributed a fifth of overall GDP growth. Since 1989, 55% of capital deepening has been contributed by ICT capital, and 90% since 1994. ICT capital deepening accounts for 25% of the growth of labour productivity over 1989-98 and 48% over 1994-98. But even when output growth is adjusted for the new ICT estimates, both labour productivity and TFP growth are still found to slow after 1994.

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Paper provided by Bank of England in its series Bank of England working papers with number 140.

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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Christopher Gust & Jaime Marquez, 2002. "International comparisons of productivity growth: the role of information technology and regulatory practices," International Finance Discussion Papers 727, Board of Governors of the Federal Reserve System (U.S.). [Downloadable!]
  2. Nicholas Oulton & Sylaja Srinivasan, . "Capital stocks, capital services, and depreciation: an integrated framework," Bank of England working papers 192, Bank of England. [Downloadable!]
  3. Hasan Bakhshi & Nicholas Oulton & Jamie Thompson, . "Modelling investment when relative prices are trending: theory and evidence for the United Kingdom," Bank of England working papers 189, Bank of England. [Downloadable!]
  4. Gianfranco Enrico Atzeni & Oliviero Antonio Carboni, 2005. "ICT productivity and firm propensity to innovative investment: learning effect evidence from italina micro data," Industrial Organization 0503012, EconWPA. [Downloadable!]
    Other versions:
  5. Nicholas Crafts, 2002. "Productivity growth in the Industrial Revolution: a new growth accounting perspective," Proceedings, Federal Reserve Bank of San Francisco, issue Nov. [Downloadable!]
    Other versions:
  6. Crafts, Nicholas, 2002. "The Solow Productivity Paradox in Historical Perspective," CEPR Discussion Papers 3142, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  7. Stefanie Haller & Iulia Traistaru-Siedschlag, 2007. "The Adoption of ICT: Firm-Level Evidence from Irish Manufacturing Industries," Papers WP204, Economic and Social Research Institute (ESRI). [Downloadable!]
  8. Gilbert Cette & Jacques Mairesse & Yusuf Kocoglu, 2002. "The Diffusion of ICTs and Growth of the French Economy over the Long-term, 1980-2000," International Productivity Monitor, Centre for the Study of Living Standards, vol. 4, pages 27-38, Spring. [Downloadable!]
  9. Gilbert Cette & Christian Pfister, 2004. "Challenges of the “New Economy” for Monetary Policy," International Productivity Monitor, Centre for the Study of Living Standards, vol. 8, pages 27-36, Spring. [Downloadable!]
  10. Temple, Jonathan, 2002. "An Assessment of the New Economy," CEPR Discussion Papers 3597, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  11. Henry van der Wiel & George van Leeuwen, 2003. "Do ICT spillovers matter? Evidence from Dutch firm-level data," CPB Discussion Papers 26, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  12. Charles St-Arnaud, 2004. "Une approche éclectique d'estimation du PIB potentiel pour le Royaume-Uni," Working Papers 04-46, Bank of Canada. [Downloadable!]
  13. Johanna Melka & Nanno Mulder & Laurence Nayman & Soledad Zignago, 2003. "Skills, Technology and Growth is ICT the Key to Success? An Analysis of ICT Impact on French Growth," Working Papers 2003-04, CEPII research center. [Downloadable!]
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