ICT Diffusion and Potential Output Growth

Cette, Gilbert; Mairesse, Jacques; Kocoglu, Yusuf

doi:10.2139/ssrn.1727276

Cited by 76 publications

(9 citation statements)

References 80 publications

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“…As in Cette, Kocoglu and Mairesse (2005), we observe in nominal terms in the US a notable stability in the capital coefficient over the last few decades (Chart 1). The stability assumption, thus, seems realistic.…”

Section: Estimating the Capital Stocksupporting

confidence: 61%

“…Concerning K, the volume of capital, we assume that in the long term, at the potential path, the capital coefficient (ratio of capital divided by GDP) remains constant in nominal terms (cf. Cette, Kocoglu and Mairesse, 2005):…”

Section: Estimating the Capital Stockmentioning

confidence: 99%

“…The underlying idea is that quality improvements in investment in terms of productive performance are at least partly incorporated into the measurement of investment prices in national accounts through hedonic or matching methods. This is mainly done for ICT since this investment benefits more than others from performance improvements (for a summary on these aspects, see Cette, Kocoglu and Mairesse, 2005;Byrne, Oliner and Sichel, 2013;and Byrne, Fernald and Reinsdorf, 2016). So, the gains in capital performance impact both investment prices and TFP.…”

Section: Estimating Tfpmentioning

confidence: 99%

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Long-term Growth Impact of Climate Change and Policies: The Advanced Climate Change Long-term (ACCL) Scenario Building Model

Alestra¹,

Cette

Chouard

et al. 2020

SSRN Journal

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This paper provides a tool to build climate change scenarios to forecast Gross Domestic Product (GDP), modelling both GDP damage due to climate change and the GDP impact of mitigating measures. It adopts a supply-side, long-term view, with 2060 and 2100 horizons. It is a global projection tool (30 countries / regions), with assumptions and results both at the world and the country / regional level. Five different types of energy inputs are taken into account according to their CO2 emission factors. Full calibration is possible at each stage, with estimated or literature-based default parameters. In particular, Total Factor Productivity (TFP), which is a major source of uncertainty on future growth and hence on CO2 emissions, is endogenously determined, with a rich modeling encompassing energy prices, investment prices, education, structural reforms and decreasing return to the employment rate. We present four scenarios: Business As Usual (BAU), with stable energy prices relative to GDP price; Decrease of Renewable Energy relative Price (DREP), with the relative price of non CO2 emitting electricity decreasing by 2% a year; Low Carbon Tax (LCT) scenario with CO2 emitting energy relative prices increasing by 1% per year; High Carbon Tax (HCT) scenario with CO2 emitting energy relative prices increasing by 3% per year. At the 2100 horizon, global GDP incurs a loss of 12% in the BAU, 10% in the DREP, 8% in the Low Carbon Tax scenario and 7% in the High Carbon Tax scenario. This scenario exercise illustrates both the "tragedy of the horizon", as gains from avoided climate change damage net of damage from mitigating policies are negative in the medium-term and positive in the long-term, and the "tragedy of the commons", as climate change damage is widely dispersed and particularly severe in developing economies, while mitigating policies should be implemented in all countries, especially in advanced countries modestly affected by climate change but with large CO2 emission contributions.

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Section: Estimating the Capital Stocksupporting

confidence: 61%

Section: Estimating the Capital Stockmentioning

confidence: 99%

Section: Estimating Tfpmentioning

confidence: 99%

See 1 more Smart Citation

Long-term Growth Impact of Climate Change and Policies: The Advanced Climate Change Long-term (ACCL) Scenario Building Model

Alestra¹,

Cette

Chouard

et al. 2020

SSRN Journal

Self Cite

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“…The literature widely recognizes that digital innovation in the form of information and communication technologies (ICT) has a significant influence on economic growth and productivity (see, for instance, Cette et al, 2005;Farkhanda, 2007;Venturini, 2009;Dimelis and Papaioannou, 2010;Heeks, 2010;Cortes and Navarro, 2011;Ahmed and Ridzuan, 2013;Rath, 2016;Niebel, 2018). As a consequence, rapid adoption of ICT in terms of access and use is observed worldwide (Chinn and Fairlie, 2007;Lam and Shiu, 2010;ITU, 2018).…”

Section: Introductionmentioning

confidence: 99%

Do Information and Communication Technologies Foster Economic Growth in Indonesia?

Rath¹,

Hermawan²

2019

BEMP

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This paper investigates, using annual data from 1980 to 2014, whether adoption of information and communication technologies (ICT) fosters economic growth in Indonesia. We employ an Autoregressive Distributed Lag cointegration technique on an augmented neoclassical growth model. The empirical results indicate a positive effect of ICT development on economic growth in both the long-run and short-run. The other regressors, such as total factor productivity, human capital, and capital per worker, also positively affect economic growth. From a policy perspective, the Indonesian government should promote ICT development through greater investment.

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“…A model similar in structure to the present one but with a quite different interpretation is in Barro and Sala-i-Martin (1995), chapter 5. The two-sector model with faster technical progress in investment goods was revived by Whelan (2001) and applied by Martin (2001) to study the US economy and by Cette et al (2005) to compare France and the US It was also employed by Bakhshi and Larsen (2005) to analyse the impact of macroeconomic shocks in the UK context. Oliner and Sichel (2002) employ the steady state of a five-sector model for some of their projections of the US economy.…”

Section: A Two-sector Model 10mentioning

confidence: 99%

Prospects for UK growth in the aftermath of the financial crisis

Oulton¹

2016

The UK Economy in the Long Expansion and Its Aftermath

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The productivity performance of the UK economy in the period 1990-2007 was excellent. Based entirely on pre-crisis data, and using a two-sector growth model, I project the future growth rate of GDP per hour in the market sector to be 2.61% p.a. But the financial crisis and the Great Recession which began in Spring 2008 have dealt this optimistic picture a devastating blow. Both GDP and GDP per hour have fallen and are still below the level reached at the peak of the boom. So I discuss a wide range of hypotheses which seek to explain the productivity collapse, including the impact of austerity. Most of the conclusions here are negative: the explanation in question doesn't work. I next turn to the long run impact of financial crises, particularly banking crises, on productivity, capital, TFP and employment. Based on a crosscountry panel analysis of 61 countries over 1950-2010, I argue that banking crises generally have a long run impact on the level of productivity but not necessarily on its long run growth rate. I therefore predict that the UK will eventually return to the growth rate predicted prior to the crisis. This prediction is conditional on the UK continuing to follow good policies in other respects, in particular not allowing the government debt-GDP ratio to rise excessively. Nonetheless the permanent reduction in the level of GDP per worker resulting from the crisis could be substantial, about 5½%. The crosscountry evidence also suggests that there are permanent effects on employment, implying a possibly even larger hit to the level of GDP per capita of about 9%.

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ICT Diffusion and Potential Output Growth

Cited by 76 publications

References 80 publications

Long-term Growth Impact of Climate Change and Policies: The Advanced Climate Change Long-term (ACCL) Scenario Building Model

Long-term Growth Impact of Climate Change and Policies: The Advanced Climate Change Long-term (ACCL) Scenario Building Model

Do Information and Communication Technologies Foster Economic Growth in Indonesia?

Prospects for UK growth in the aftermath of the financial crisis

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