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Its Not What You Make, Its How You Use IT: Measuring the Welfare Benefits of the IT Revolution Across Countries

  • Tamim Bayoumi
  • Markus Haacker

This paper analyzes the welfare benefits from falling relative prices of IT (information technology) goods across a wide range of countries. We find, using two separate methodologies and datasets, that welfare benefits mainly accrue to users of IT, not their producers, because of falling relative prices. This is important, as IT production and use are highly differentiated across countries, and implies that earlier work on how IT production affects real GDP, while useful in calibrating the overall benefits of the IT revolution, are a less valuable way of assessing the distribution of benefits.

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File URL: http://cep.lse.ac.uk/pubs/download/DP0548.pdf
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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0548.

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Date of creation: Sep 2002
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Handle: RePEc:cep:cepdps:dp0548
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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  1. Sue Fernie & Helen Gray, 2002. "It's a family affair: the effect of union recognition and human resource management on the provision of equal opportunities in the UK," LSE Research Online Documents on Economics 20089, London School of Economics and Political Science, LSE Library.
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  7. Martin Neil Baily, 2001. "Macroeconomic implications of the new economy," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 201-268.
  8. Martin Neil Baily, 2001. "Macroeconomic Implications of the New Economy," Working Paper Series WP01-9, Peterson Institute for International Economics.
  9. Dirk Pilat & Frank C. Lee, 2001. "Productivity Growth in ICT-producing and ICT-using Industries: A Source of Growth Differentials in the OECD?," OECD Science, Technology and Industry Working Papers 2001/4, OECD Publishing.
  10. Martin Brookes & Zaki Wahhaj, 2001. "Is the Internet Better than Electricity?," World Economics, World Economics, Economic & Financial Publishing, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 2(2), pages 53-72, April.
  11. repec:cup:cbooks:9780521453455 is not listed on IDEAS
  12. Stephen J Nickell & Stephen Redding & Joanna Swaffield, 2002. "Educational attainment, labour market institutions, and the structure of production," LSE Research Online Documents on Economics 3706, London School of Economics and Political Science, LSE Library.
  13. Dale W. Jorgenson & Kevin J. Stiroh, 2000. "Raising the Speed Limit: US Economic Growth in the Information Age," OECD Economics Department Working Papers 261, OECD Publishing.
  14. Karl Whelan, 2000. "A guide to the use of chain aggregated NIPA data," Finance and Economics Discussion Series 2000-35, Board of Governors of the Federal Reserve System (U.S.).
  15. Kevin J. Stiroh, 2001. "Information technology and the U.S. productivity revival: what do the industry data say?," Staff Reports 115, Federal Reserve Bank of New York.
  16. Paul Schreyer, 2000. "The Contribution of Information and Communication Technology to Output Growth: A Study of the G7 Countries," OECD Science, Technology and Industry Working Papers 2000/2, OECD Publishing.
  17. C. Knick Harley, 1998. "Cotton Textile Prices and the Industrial Revolution," Economic History Review, Economic History Society, vol. 51(1), pages 49-83, 02.
  18. repec:ucn:oapubs:10197/253 is not listed on IDEAS
  19. Erik Brynjolfsson, 1994. "Some Estimates of the Contribution of Information Technology to Consumer Welfare," Working Paper Series 161, MIT Center for Coordination Science.
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