ICT and Productivity Resurgence: A Growth Model for the Information Age

Pub. Date
01 August, 2007

Since the mid-1990s, extraordinary advances in semiconductors have enhanced the embodied nature of information technology, fuelling efficiency growth in computers and communication equipment industries. The consequent fall in prices has enabled the rapid diffusion of these new technologies, which have reached the critical threshold to foster productivity growth. In light of the recent growth pattern of the United States, this paper presents a model where the endogenous engine of development is the learning-by-doing process stemming from the usage of ICT for investment and consumption. Based on a two-sector framework (à la Whelan) that distinguishes between ICT-producers and -users, the model yields a sound representation of the stylized facts of the Information Age.