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ICT-Investment, Knowledge Accumulation and Endogenous Growth

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  • Zon, Adriaan van

    (MERIT)

Abstract

In this paper we present an endogenous growth model based on Lucas (1988). We have extended the Lucas model by incorporating ICT-capital next to human capital. We take account of spillovers from ICT use in human capital formation to final output production. The effects on growth of these spillovers depend very much on whether they are external or completely internalised. We find that welfare is positively affected, the stronger these spillovers are, but also the more these spillovers are internalised. In addition, we find that in the case of limited internalised knowledge spillovers, we may face a multiple equilibria steady state growth situation, that has an inherent tendency to select the non-optimum (high growth) equilibrium in which all types of capital are ‘over accumulated’, including ICT-capital. This suggests that there is room for policy intervention here, because there exists an ‘optimum’ value of the knowledge-spillover parameter where both equilibria coincide and over accumulation does not happen.

Suggested Citation

  • Zon, Adriaan van, 2001. "ICT-Investment, Knowledge Accumulation and Endogenous Growth," Research Memorandum 037, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:umamer:2001037
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    File URL: https://www.merit.unu.edu/publications/rmpdf/2001/rm2001-037.pdf
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    Cited by:

    1. Samia Nour, 2014. "The Importance (Impacts) of Knowledge at the Macro–Micro Levels in the Arab Gulf Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 5(3), pages 521-537, September.
    2. Meijers, Huub, 2007. "ICT Externalities: Evidence from cross country data," MERIT Working Papers 021, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    Keywords

    economics of technology ;

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