Simulating the New Economy
The IT, the Internet, or the Computing & Communications (C&C) technology revolution has been central to the economic discussion for several decades. Before the mid-1990s the catchword was the “productivity paradox” coined by Robert Solow, who stated in 1987 that “computers are everywhere visible, except in the productivity statistics”. Then the New Economy and fast productivity growth fueled by C&C technology suddenly became the catchword of the very late 1990s. Its luster however, faded almost as fast as it arrived with the dot.com deaths of the first years of the new millennium. With this paper we demonstrate that the two paradoxes above are perfectly compatible within a consistent micro (firm) based macro theoretical framework of endogenous growth. Within the same model framework also a third paradox can be resolved, namely the fact that the previous major New Industry creation, the Industrial Revolution, only involved a handful of Western nations that had got their institutions in order. If the New Economy is a potential reality, one cannot take for granted that all industrial economies will participate successfully in its introduction. It all depends on the local receiver competence to build industry on the new technology. We, hence, also demonstrate within the same model the existence of the risk of failing altogether to capture the opportunities of a New Economy.
|Date of creation:||21 Jun 2004|
|Date of revision:|
|Publication status:||Published in Structural Change and Industrial Dynamics, 2004, pages 289-314.|
|Contact details of provider:|| Postal: |
Phone: 08-441 59 00
Fax: 08-441 59 29
Web page: http://www.ratio.se/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ballot, Gerard & Fakhfakh, Fathi & Taymaz, Erol, 2001. "Firms' human capital, R&D and performance: a study on French and Swedish firms," Labour Economics, Elsevier, vol. 8(4), pages 443-462, September.
- Eliasson, Gunnar, 1991. "Modeling the experimentally organized economy : Complex dynamics in an empirical micro-macro model of endogenous economic growth," Journal of Economic Behavior & Organization, Elsevier, vol. 16(1-2), pages 153-182, July.
- Andrew Atkeson & Patrick J. Kehoe, 2001.
"The transition to a new economy after the Second Industrial Revolution,"
606, Federal Reserve Bank of Minneapolis.
- Andy Atkeson & Pat Kehoe, 2002. "The transition to a new economy after the Second Industrial Revolution," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
- Andrew Atkeson & Patrick J. Kehoe, 2001. "The Transition to a New Economy After the Second Industrial Revolution," NBER Working Papers 8676, National Bureau of Economic Research, Inc.
- Robert J. Gordon, 2000. "Interpreting the "One Big Wave" in U.S. Long-Term Productivity Growth," NBER Working Papers 7752, National Bureau of Economic Research, Inc.
- Gunnar Eliasson & Asa Eliasson, 1996. "The biotechnological competence bloc," Revue d'Économie Industrielle, Programme National Persée, vol. 78(1), pages 7-26.
- Eliasson, Gunnar, 1977. "Competition and Market Processes in a Simulation Model of the Swedish Economy," American Economic Review, American Economic Association, vol. 67(1), pages 277-81, February.
- Gordon, Robert J, 2000.
"Does the 'New Economy' Measure up to the Great Inventions of the Past?,"
CEPR Discussion Papers
2607, C.E.P.R. Discussion Papers.
- Robert J. Gordon, 2000. "Does the "New Economy" Measure Up to the Great Inventions of the Past?," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 49-74, Fall.
- Robert J. Gordon, 2000. "Does the "New Economy" Measure up to the Great Inventions of the Past?," NBER Working Papers 7833, National Bureau of Economic Research, Inc.
- Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," American Economic Review, American Economic Association, vol. 91(1), pages 1-32, March.
- Carlsson, Bo A W, 1983. "Industrial Subsidies in Sweden: Macro-Economic Effects and an International Comparison," Journal of Industrial Economics, Wiley Blackwell, vol. 32(1), pages 1-23, September.
- Ballot, Gérard & Taymaz, Erol, 1993. "Firm-Sponsored Training, Technical Progress and Aggregate Performance in a Micro-Macro Model," Working Paper Series 402, Research Institute of Industrial Economics.
- Eliasson, Gunnar & Johansson, Dan & Taymaz, Erol, 2005. "Firm Tunrover and the Rate of Macroeconomic Growth - Simulating the Macroeconomic Effects of Schumpeterian Creative Destruction," Ratio Working Papers 66, The Ratio Institute.
- Dale W. Jorgenson, 2001. "Information Technology and the U. S. Economy," Harvard Institute of Economic Research Working Papers 1911, Harvard - Institute of Economic Research.
- repec:cup:cbooks:9780521333962 is not listed on IDEAS
- Eliasson, Gunnar, 1988. "The Firm as a Competent Team," Working Paper Series 207, Research Institute of Industrial Economics, revised Feb 1990.
- Anonymous, 1991. "Research Reports And Updates," Journal of Food Distribution Research, Food Distribution Research Society, vol. 22(1), February.
- Eliasson, Gunnar, 1990. "The firm as a competent team," Journal of Economic Behavior & Organization, Elsevier, vol. 13(3), pages 275-298, June.
- Eliasson, Gunnar, 1984. "Micro heterogeneity of firms and the stability of industrial growth," Journal of Economic Behavior & Organization, Elsevier, vol. 5(3-4), pages 249-274.
When requesting a correction, please mention this item's handle: RePEc:hhs:ratioi:0052. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin Korpi)
If references are entirely missing, you can add them using this form.