Information Technology and the World Economy
This article analyses the impact of investment in information technology (IT) on the recent resurgence of world economic growth. We describe the growth of the world economy, seven regions, and 14 major economies during the period 1989–2004. We allocate the growth of world output between input growth and productivity and find, surprisingly, that input growth greatly predominates. Moreover, differences in per capita output levels are explained by differences in per capita input rather than variations in productivity. The contributions of IT investment have increased in all regions, but especially in industrialized economies and Developing Asia.
KeywordsAsian miracle Growth accounting Human capital Information technology and the world economy Input growth Productivity growth
The Economic and Social Research Institute provided financial support for work on the G7 economies from its program on international collaboration through the Nomura Research Institute. Alessandra Colecchia, Mun S. Ho, Kazuyuki Motohashi, Koji Nomura, Jon Samuels, Kevin J. Stiroh, Marcel Timmer, and Bart van Ark provided valuable data. The Bureau of Economic Analysis and the Bureau of Labor Statistics assisted with data for the United States and Statistics Canada contributed the data for Canada. We are grateful to all of them but retain sole responsibility for any remaining deficiencies.
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