Information and communication technologies and medium-run fluctuations

Marco Brianti and Laura Gáti

Journal of Economic Dynamics and Control, 2023, vol. 156, issue C

Abstract: This paper explores the possibility that productivity improvements in information and communication technologies (ICT) are a source of medium-run fluctuations in total factor productivity (TFP) and economic activity. We document in a structural VAR setting that supply shocks in the ICT sector are followed by hump-shaped and long-lasting increases in TFP. Following the ICT literature, we use a two-sector model to suggest a mechanism behind the hump-shaped TFP response: that ICT is a general-purpose technology (GPT). Using impulse-response matching, we show that a model with a spillover from ICT capital is able to match the hump-shaped TFP response, hinting at the importance of the diffusion of ICT.

Keywords: Information and communication technologies; General-purpose technologies; Two-sector models; Total factor productivity (search for similar items in EconPapers)
JEL-codes: E3 (search for similar items in EconPapers)
Date: 2023
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Working Paper: Information and Communication Technologies and Medium-Run Fluctuations (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:156:y:2023:i:c:s016518892300146x

DOI: 10.1016/j.jedc.2023.104740

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