You Say You Want A Revolution; Information Technology and Growth
The information technology (IT) revolution has arrived, but how much will it change the world? It has been established that IT is contributing to labor productivity growth through both increases in the levels of IT capital per worker and total factor productivity (TFP) growth in the production of IT equipment. The main outstanding issue is whether IT is contributing to TFP growth more generally. Using data on IT expenditure and production for a broad sample of countries, we find a positive, large, and significant effect of IT expenditure on the acceleration in TFP in the late 1990s and a smaller-and significant-effect of IT production. We also find evidence that the impact of IT expenditure on TFP growth increases over time, suggesting that spillovers materialize gradually. Our results suggest that the increase in IT expenditure across industrial countries during 1995-2000 will eventually lead to an average increase in TFP growth of about one-third of 1 percent per year.
|Date of creation:||01 Apr 2002|
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- Bart van Ark, 2001. "The Renewal of the Old Economy: An International Comparative Perspective," OECD Science, Technology and Industry Working Papers 2001/5, OECD Publishing.
- 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.
- Dale W. Jorgenson & Kevin J. Stiroh, 2000.
"Raising the Speed Limit: U.S. Economic Growth in the Information Age,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 31(1), pages 125-236.
- 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.
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- Nicholas Oulton, 2002.
"ICT and Productivity Growth in the United Kingdom,"
Oxford Review of Economic Policy,
Oxford University Press, vol. 18(3), pages 363-379.
- Kevin J. Stiroh, 2001.
"Information technology and the U.S. productivity revival: what do the industry data say?,"
115, Federal Reserve Bank of New York.
- Kevin J. Stiroh, 2002. "Information Technology and the U.S. Productivity Revival: What Do the Industry Data Say?," American Economic Review, American Economic Association, vol. 92(5), pages 1559-1576, December.
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