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Information and communication technologies and medium-run fluctuations

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  • Brianti, Marco
  • Gáti, Laura

Abstract

This paper explores the possibility that productivity improvements in information and communication technologies (ICT) are a source of medium-run fluctuations in total factor productivity (TFP) and economic activity. We document in a structural VAR setting that supply shocks in the ICT sector are followed by hump-shaped and long-lasting increases in TFP. Following the ICT literature, we use a two-sector model to suggest a mechanism behind the hump-shaped TFP response: that ICT is a general-purpose technology (GPT). Using impulse-response matching, we show that a model with a spillover from ICT capital is able to match the hump-shaped TFP response, hinting at the importance of the diffusion of ICT.

Suggested Citation

  • Brianti, Marco & Gáti, Laura, 2023. "Information and communication technologies and medium-run fluctuations," Journal of Economic Dynamics and Control, Elsevier, vol. 156(C).
    • Handle: RePEc:eee:dyncon:v:156:y:2023:i:c:s016518892300146x
    DOI: 10.1016/j.jedc.2023.104740
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    More about this item

    Keywords

    Information and communication technologies; General-purpose technologies; Two-sector models; Total factor productivity;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles

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