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

  • Evangelia Vourvachaki

This paper investigates the growth impact of Information and Communication Technologies (ICT) in an economy consisting of three sectors, ICT-producing, ICT-using and non-ICTusing. The ICT progress causes falling prices of the consumption and intermediates produced by the ICT-using sector, providing incentives for investment in the sectors using them. Therefore, the non-ICT-using sector benefits indirectly from ICT, while households' utility increases. The magnitude of the growth transmission mechanism relies on the ICT-using sector production shares. Aggregate economy is on a constant growth path, where growth rates differ across sectors. The model predictions are broadly consistent with the U.S. growth experience.

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Paper provided by The Center for Economic Research and Graduate Education - Economics Institute, Prague in its series CERGE-EI Working Papers with number wp386.

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Date of creation: Aug 2009
Date of revision:
Handle: RePEc:cer:papers:wp386
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