Telecommunications technology, sectoral prices and international competitiveness

Francis J. Cronin, Mark A. Gold and Steven Lewitzky

Telecommunications Policy, vol. 16, issue 7, 553-564

Abstract: The impact of technological advances in telecommunication service production over the interval 1963-1982 upon the prices of telecommunication services and other categories of commodity output is calculated and compiled to show effects upon broader price indices, the wholesale price index (WPI) and the consumer price index (CPI). The analysis reveals the impact of telecommunications advances on US sectoral prices to be significant. Moreover, technical advances in US telecommunications have played an important role in international competitiveness and trade. Because existing technological advances have not become fully diffused in the USA these results raise questions concerning the diffusion process, and suggest there are social benefits to accelerated diffusion.

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