 The growing impact of ICT productivity via the cost of capital: Evidence from the U.S. and JapanMun Ho, Koji Nomura and Jon D. Samuels Telecommunications Policy, 2023, vol. 47, issue 9 Abstract: We identify and measure two impacts of industry-level total factor productivity (TFP) growth on aggregate price change in the U.S. and Japan. The first is a standard effect from the definition of aggregate GDP. TFP change lowers aggregate prices ceteris paribus. The second is that a change in TFP in the production of investment goods lowers the cost of capital via lower investment prices. We call this the cost-of-capital effect and formulate an expanded growth accounting framework to capture both effects. We apply it to a harmonized dataset for the two countries and find that the standard effect has fallen since the peak around 2000 due to lower TFP growth and a diminished share of GDP. However, the cost-of-capital effect has risen in importance and offsets part of this decline in the standard effect. Keywords: Total factor productivity; Computer industry; User cost of capital; Information and communication technology (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:telpol:v:47:y:2023:i:9:s0308596123001465 Ordering information: This journal article can be ordered from DOI: 10.1016/j.telpol.2023.102635 Access Statistics for this article Telecommunications Policy is currently edited by Erik Bohlin More articles in Telecommunications Policy from Elsevier |
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