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Information and Communication Technologies in a Multi-Sector Endogenous Growth Model

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  • Evangelia Vourvachaki

Abstract

This paper investigates the impact of Information and Communication Technologies (ICT) on growth in an economy, consisting of three sectors, ICT-producing, ICT-using and non-ICT-using. The benefits from ICT come from the falling prices of the ICT-using sector's good, which is used for the production of intermediate goods. Their falling prices provide incentives for investment for sectors using them, so the non-ICT using sector experiences sustained growth driven by capital accumulation. Rates of growth across the three sectors differ, but the aggregate economy is on a balanced growth path with constant labour shares across sectors. US evidence confirms the model's predictions.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0750.

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Date of creation: Aug 2006
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Handle: RePEc:cep:cepdps:dp0750

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: multi-sector economy; endogenous growth; balanced growth path; Information and Communication Technologies;

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References

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  1. L. Rachel Ngai & Christopher Pissarides, 2004. "Structural change in a multi-sector model of growth," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 3550, London School of Economics and Political Science, LSE Library.
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Citations

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Cited by:
  1. Dale W. Jorgenson & Marcel P. Timmer, 2011. "Structural Change in Advanced Nations: A New Set of Stylised Facts," Scandinavian Journal of Economics, Wiley Blackwell, Wiley Blackwell, vol. 113(1), pages 1-29, 03.
  2. L. Rachel Ngai & Roberto M. Samaniego, 2006. "An R&D-Based Model of Multi-Sector Growth," CEP Discussion Papers, Centre for Economic Performance, LSE dp0762, Centre for Economic Performance, LSE.
  3. Ngai, Liwa Rachel & Samaniego, Roberto, 2007. "On the Long run Determinants of Industry TFP Growth Rates," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6408, C.E.P.R. Discussion Papers.
  4. Vahagn Jerbashian, 2011. "The Telecommunications Industry and Economic Growth: How the Market Structure Matters," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c016_027, DEGIT, Dynamics, Economic Growth, and International Trade.
  5. Rachel Ngai & Roberto Samaniego, 2011. "Accounting for Research and Productivity Growth Across Industries," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 475-495, July.
  6. Francesco VENTURINI, 2008. "Information Technology, Research & Development, or Both? What Really Drives A Nation's Productivity," Working Papers, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali 321, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  7. L. Rachel Ngai & Roberto M. Samaniego, 2008. "Research and Productivity Growth Across Industries," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 4410, London School of Economics and Political Science, LSE Library.
  8. Katrin Tinn & Evangelia Vourvachaki, 2009. "Can Optimism about Technology Stocks Be Good for Welfare? Positive Spillovers vs. Equity Market Losses," CERGE-EI Working Papers wp383, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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