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Information Technologies, Economic Growth and Productivity Shocks

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  • Claudio MATTALIA

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) and Universita degli Studi di Torino - Italy)

Abstract

This paper develops a multi-sectoral endogenous growth model in order to reproduce some of the essential characteristics of the so-called “ICT Revolution”. The economy consists of four sectors and the most important features are the embodied nature of technological progress, the horizontal differentiation and the “lab-equipment” specification of R&D. After the description of the different sectors, the equilibrium conditions are obtained, the balanced growth path is characterized analytically and the corresponding steady state system is derived. From this system some analytical results can be obtained, in particular it turns out that shocks on the productivity of the different sectors have permanent effects on long-term growth (contrary to the version of the model without the “lab-equipment” assumption, where only a shock on the productivity of the R&D sector influences long-term growth). These results are confirmed, in the last part of the paper, by the numerical simulation of the model, that allows also to analyse the short-run response of the system to the different shocks that can hit the economy and to study the robustness of the model.

Suggested Citation

  • Claudio MATTALIA, 2002. "Information Technologies, Economic Growth and Productivity Shocks," LIDAM Discussion Papers IRES 2002026, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2002026
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2002-26.pdf
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    References listed on IDEAS

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    5. Greenwood, Jeremy & Hercowitz, Zvi & Krusell, Per, 1997. "Long-Run Implications of Investment-Specific Technological Change," American Economic Review, American Economic Association, vol. 87(3), pages 342-362, June.
    6. Boyan Jovanovic & Jeremy Greenwood, 1999. "The Information-Technology Revolution and the Stock Market," American Economic Review, American Economic Association, vol. 89(2), pages 116-122, May.
    7. Jeremy Greenwood & Boyan Jovanovic, 2001. "Accounting for Growth," NBER Chapters, in: New Developments in Productivity Analysis, pages 179-224, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Mattalia, Claudio, 2012. "Human capital accumulation in R&D-based growth models," Economic Modelling, Elsevier, vol. 29(3), pages 601-609.
    2. Claudio, MATTALIA, 2005. "Human Capital Accumulation in R&D-based Growth Models," Discussion Papers (ECON - Département des Sciences Economiques) 2005046, Université catholique de Louvain, Département des Sciences Economiques.

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    More about this item

    Keywords

    Information Technology; Endogenous Growth;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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