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Information Technology and the World Growth Resurgence


  • Dale W. Jorgenson
  • Khuong Vu


This paper analyzes the impact of investment in information technology (IT) on the recent resurgence of world economic growth. We describe the growth of the world economy, seven regions, and 14 major economies during the period 1989-2004. We allocate the growth of world output between input growth and productivity and find, surprisingly, that input growth greatly predominates! Moreover, differences in per capita output levels are explained by differences in per capita input, rather than variations in productivity. The contributions of IT investment have increased in all regions, but especially in industrialized economies and Developing Asia. Copyright Verein für Socialpolitik and Blackwell Publishing Ltd. 2007.

Suggested Citation

  • Dale W. Jorgenson & Khuong Vu, 2007. "Information Technology and the World Growth Resurgence," German Economic Review, Verein für Socialpolitik, vol. 8, pages 125-145, May.
  • Handle: RePEc:bla:germec:v:8:y:2007:i::p:125-145

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    References listed on IDEAS

    1. Francesco Daveri, 2002. "The New Economy in Europe, 1992--2001," Oxford Review of Economic Policy, Oxford University Press, vol. 18(3), pages 345-362.
    2. Timmer, Marcel P. & Ypma, Gerard & Ark, Bart van der, 2003. "IT in the European Union: driving productivity divergence?," GGDC Research Memorandum 200363, Groningen Growth and Development Centre, University of Groningen.
    3. Baldwin, John R. & Harchaoui, Tarek, 2002. "Productivity Growth in Canada," Productivity Growth in Canada, Statistics Canada, Economic Analysis Division, number stcb6e, February.
    4. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
    5. Jorgenson, Dale W. & Motohashi, Kazuyuki, 2005. "Information technology and the Japanese economy," Journal of the Japanese and International Economies, Elsevier, vol. 19(4), pages 460-481, December.
    6. Carsten A. Holz, 2006. "CHINA's REFORM PERIOD ECONOMIC GROWTH: HOW RELIABLE ARE ANGUS MADDISON's ESTIMATES?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 85-119, March.
    7. Carol Corrado & John Haltiwanger & Dan Sichel, 2005. "Measuring Capital in the New Economy," NBER Books, National Bureau of Economic Research, Inc, number corr05-1, January.
    8. Angus Maddison, 2006. "DO OFFICIAL STATISTICS EXAGGERATE CHINA's GDP GROWTH? A REPLY TO CARSTEN HOLZ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(1), pages 121-126, March.
    9. Piatkowski, Marcin & Bart, van Ark, 2005. "ICT and Productivity Growth in Transition Economies: Two-Phase Convergence and Structural Reforms," MPRA Paper 29398, University Library of Munich, Germany.
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    Cited by:

    1. Carmen Galve-Górriz & Ana Gargallo Castel, 2010. "Revisión del Estado de la sociedad de la información en España," REVISTA FACULTAD DE CIENCIAS ECONÓMICAS, UNIVERSIDAD MILITAR NUEVA GRANADA, June.
    2. Maya Eden & Paul Gaggl, 2018. "On the Welfare Implications of Automation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 15-43, July.
    3. F. Bacchini & M. E. Bontempi & R. Golinelli & C. Jona Lasinio, 2014. "ICT and Non-ICT investments: short and long run macro dynamics," Working Papers wp956, Dipartimento Scienze Economiche, Universita' di Bologna.
    4. Jens J. Krüger, 2016. "Radar scanning the world production frontier," Journal of Productivity Analysis, Springer, vol. 46(1), pages 1-13, August.
    5. Esteban Alfaro Cortés & José-Luis Alfaro Navarro, 2011. "Do ICT Influence Economic Growth and Human Development in European Union Countries?," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 17(1), pages 28-44, February.
    6. repec:kap:iaecre:v:17:y:2011:i:1:p:28-44 is not listed on IDEAS
    7. Michael C Burda & Battista Severgnini, 2009. "TFP Growth in Old and New Europe," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 51(4), pages 447-466, December.
    8. Díaz-Chao, Ángel & Sainz-González, Jorge & Torrent-Sellens, Joan, 2015. "ICT, innovation, and firm productivity: New evidence from small local firms," Journal of Business Research, Elsevier, vol. 68(7), pages 1439-1444.
    9. Beynon, Malcolm & Jones, Paul & Pickernell, David, 2016. "Country-level investigation of innovation investment in manufacturing: Paired fsQCA of two models," Journal of Business Research, Elsevier, vol. 69(11), pages 5401-5407.
    10. Grüner, Hans Peter, 2009. "Information technology: Efficient restructuring and the productivity puzzle," Journal of Economic Behavior & Organization, Elsevier, vol. 72(3), pages 916-929, December.
    11. Ronald Kumar, 2014. "Exploring the role of technology, tourism and financial development: an empirical study of Vietnam," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(5), pages 2881-2898, September.
    12. Ronald Kumar & Madhukar Singh, 2014. "Role of health expenditure and ICT in a small island economy: a study of Fiji," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(4), pages 2295-2311, July.
    13. Abhay Gupta, 2013. "Estimating Direct Gains in Consumer Welfare in Telecommunications Sector," Journal of Consumer Policy, Springer, vol. 36(2), pages 119-138, June.
    14. repec:rse:wpaper:v:13:y:2017:i:1:p:59-65 is not listed on IDEAS
    15. Diaz-Chao, Angel & Torrent-Sellens, Joan, 2010. "¿Pueden el uso de las TIC y los activos intangibles mejorar la competitividad? Un análisis empírico para la empresa catalana/Can ICT use and Intangible Assets Improve the Competitiveness? An Empirical," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 28, pages 477(22á.)-4, Agosto.
    16. Sumner La Croix, 2007. "Decomposing and Analyzing Korea’s Declining GDP Growth: Some Cautions and Suggestions," Working Papers 200721, University of Hawaii at Manoa, Department of Economics.
    17. Ronald Ravinesh Kumar & Peter Josef Stauvermann & Syed Jawad Hussain Shahzad, 2017. "Can technology provide a glimmer of hope for economic growth in the midst of chaos? A case of Zimbabwe," Quality & Quantity: International Journal of Methodology, Springer, vol. 51(2), pages 919-939, March.
    18. Misbah Tanveer Choudhry, 2013. "Age Dependency and Labor Productivity Divergence," Quaderni del Dipartimento di Economia, Finanza e Statistica 113/2013, Università di Perugia, Dipartimento Economia.

    More about this item

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence


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