Technology Shocks, the Service Sector and Economic Growth

Gogol Thakur

MPRA Paper from University Library of Munich, Germany

Abstract: Advances in ICTs as well as financial developments have greatly increased the scope for joint utilisation of various industrial goods and services. For example, consumption of many durable goods like telecommunication equipment (e.g. mobile sets), various electronic products, computer hardware and automobiles leads to joint purchases of services such as telecommunications, software services, insurance and other financial services. In this paper, we propose a specification for demand interlinkage between industry and the service sector, indicative of such developments, wherein final demand for service not only depends on industrial output but also on the relative price of service. This specification implies that a labour productivity increase in the service sector, say due to adoption of ICTs, can generate enough demand to increase both the growth rate in the economy and the relative size of the service sector if demand for service per unit industrial output is sufficiently elastic with respect to its relative price.

Keywords: Service sector; Information and Communication Technologies (ICTs); Demand-led growth; Two sector growth models (search for similar items in EconPapers)
JEL-codes: O11 O14 O41 (search for similar items in EconPapers)
Date: 2016-07-21, Revised 2016-08-27
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/73364/1/MPRA_paper_73364.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/74004/1/MPRA_paper_74004.pdf revised version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:73364

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().