ICT, Reallocation and Productivity

Eric Bartelsman

No 486, European Economy - Economic Papers 2008 - 2015 from Directorate General Economic and Financial Affairs (DG ECFIN), European Commission

Abstract: This paper starts by reviewing medium- to long-term growth prospects provided in recent academic and policy research. The paper argues that, owing to the on-going advances in ICT, much higher growth is technologically feasible, but that a considerable amount of churn and reallocation across firms in the market sector. Next, the paper presents evidence on recent patterns of reallocation in EU countries. Based on theoretical findings from heterogeneous firm dynamics models, the paper will describe how various types of policy could affect the processes of allocation and selection and thereby growth prospects. Finally, the paper will combine empirical and theoretical insights to point towards promising policy directions. Conditional on the policy environment, labor productivity growth in the EU of 2.5 percent per year for the next 20-30 years appears attainable.

JEL-codes: E23 J63 L16 O40 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2013-04
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:euf:ecopap:0486

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