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Institutions, Telecommunications Dynamics and Policy Challenges: Theory and Empirical Analysis for Germany

Andre Jungmittag and Paul Welfens

No disbei133, EIIW Discussion paper from Universitätsbibliothek Wuppertal, University Library

Abstract: The telecommunications sector was liberalized in the US and the EU in 1984 and 1998, respectively. In EU countries, price cap regulation has shaped this sector in a pro-competitive way that - with telecommunications obviously being a key element of the information and communications sector (ICT) - has obviously contributed to higher employment and growth. Integrating the use of telecommunications in a macroeconomic production function is the analytical starting point for our interdependent analysis of output, use of telecommunications and employment. Based on unit root and co-integration analysis as well as an error correction three-equation model which are estimated simultaneously, we present results both on long run links and short run links between telecommunications, output and employment. Considering various scenarios suggests that a fall in the relative price of telecommunications can generate a cumulated employment increase of 760,000 within seven years. This points to the need for maintaining the regulation of fixed-line telecommunications networks in Germany with due emphasis on efficiency-enhancing competition. The institutional setup for regulating telecommunications could be improved in Germany and other EU countries.

Keywords: telecommunications dynamics; institutional setup (search for similar items in EconPapers)
JEL-codes: E0 L96 O0 (search for similar items in EconPapers)
Pages: 34 Pages
Date: 2005-05
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