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Is the Internet Better than Electricity?

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  • Martin Brookes
  • Zaki Wahhaj

Abstract

This article looks at the economic impact of electrification in the United States to gain insights about the possible consequences of today’s information technologies. A close study reveals that electrification significantly raised productivity growth by spurring a redesign of the optimal factory but, strikingly, neither the firms producing the new technology, nor those using it, were able to increase their share of profits in GDP. The authors conclude that even in the unlikely event that the internet and IT matches electricity in economic terms, the only unambiguous beneficiaries would probably be consumers who are able to enjoy lower prices of goods and services and newer products.

Suggested Citation

  • Martin Brookes & Zaki Wahhaj, 2001. "Is the Internet Better than Electricity?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(2), pages 53-72, April.
    • Handle: RePEc:wej:wldecn:56
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    File URL: https://www.worldeconomics.com/Journal/Papers/Article.details?ID=56
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    Cited by:

    1. Bayoumi, Tamim & Haacker, Markus, 2002. "It's Not What You Make, It's How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries," CEPR Discussion Papers 3555, C.E.P.R. Discussion Papers.
    2. Crafts, Nicholas, 2002. "The Solow Productivity Paradox in Historical Perspective," CEPR Discussion Papers 3142, C.E.P.R. Discussion Papers.

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