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Information and Communication Technologies in a Multi-Sector Endogenous Growth Model

  • Evangelia Vourvachaki

This paper investigates the impact of Information and Communication Technologies (ICT) on growth in an economy, consisting of three sectors, ICT-producing, ICT-using and non-ICT-using. The benefits from ICT come from the falling prices of the ICT-using sector's good, which is used for the production of intermediate goods. Their falling prices provide incentives for investment for sectors using them, so the non-ICT using sector experiences sustained growth driven by capital accumulation. Rates of growth across the three sectors differ, but the aggregate economy is on a balanced growth path with constant labour shares across sectors. US evidence confirms the model's predictions.

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Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0750.

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Date of creation: Aug 2006
Date of revision:
Handle: RePEc:cep:cepdps:dp0750
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