EconPapers    
Economics at your fingertips  
 

ENDOGENIZING THE ICT SECTOR: A MULTISECTOR APPROACH

Clifford R. Wymer, Enrico Saltari and Daniela Federici

Macroeconomic Dynamics, 2019, vol. 23, issue S1, 25-58

Abstract: In this paper, we present a nonlinear model where the information and communication technology (ICT) sector is endogenized. In the model, there are two intermediate goods: a traditional good produced by capital and labor and the ICT good produced by innovative capital and skilled labor. The final good is obtained combining the two intermediate goods. The model is specified and estimated as continuous-time general disequilibrium framework. Our main results are the following. We find that the elasticity of substitution of the aggregate sector has a value intermediate between that of the ICT sector and that of the traditional sector, indicating that the input complementarity is tighter in the former than in the latter. Moreover, in all the sectors elasticities are well below 1. As for the traditional sector, whose share is predominant in the production of the final good, the input complementarity helps explain most of the labor share decline of Italian economy as a consequence of the slowdown in the growth of capital intensity. In the ICT sector, technological progress, both in the form of capital augmenting and capital bias, showed a decline over the sample period with an obvious negative consequence on the global evolution of the technical progress. The results about the dynamics of the two intermediate sectors allow to interpret the “Italian paradox” of an industrial structure marked by an increasing weight of the traditional sector and the difficulties encountered by the Italian economy in exiting from its actual worst recession since the 1930s.

Date: 2019
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.cambridge.org/core/product/identifier/ ... type/journal_article link to article abstract page (text/html)

Related works:
Working Paper: Endogenizing the ICT sector: A multi-sector approach (2015) Downloads
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:cup:macdyn:v:23:y:2019:i:s1:p:25-58_00

Access Statistics for this article

More articles in Macroeconomic Dynamics from Cambridge University Press Cambridge University Press, UPH, Shaftesbury Road, Cambridge CB2 8BS UK.
Bibliographic data for series maintained by Kirk Stebbing ().

 
Page updated 2025-03-31
Handle: RePEc:cup:macdyn:v:23:y:2019:i:s1:p:25-58_00