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Organizing growth

  • Garicano, Luis
  • Rossi-Hansberg, Esteban

We propose a framework to study the impact of information and communication technology on growth through its impact on organization and innovation. Agents accumulate knowledge to use available technologies and invent new ones. The use of a technology requires the development of organizations to coordinate the work of experts, which takes time. We find that while advances in information technology always increase growth, improvements in communication technology may lead to lower growth and even to stagnation, since the payoff to exploiting available technologies through organizations increases relative to the payoff from developing new innovations.

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 147 (2012)
Issue (Month): 2 ()
Pages: 623-656

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Handle: RePEc:eee:jetheo:v:147:y:2012:i:2:p:623-656
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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