Long Term Implications Of The ICT Revolution: Applying The Lessons Of Growth Theory And Growth Accounting
Source: Centre for Economic Performance
How big a boost to long run growth can countries expect from the ICT revolution? The author uses the results of growth accounting and the insights from a two-sector growth model to answer this question. The use of a two-sector rather than a one-sector model is required because of the very rapid rate at which the prices of ICT products have fallen in the past and are expected to fall in the future. According to the two-sector model, the main boost to growth comes from ICT use, not ICT production.