ICT and Productivity Resurgence: a growth model for the Information Age

By the mid-1990s, the extraordinary advances in semiconductors enhanced the embodied nature of information technology, fuelling the efficiency growth in computers and communication equipment industries. The consequent fall in prices enabled the rapid diffusion of these new technologies, which have thus reached the critic threshold to foster productivity growth. In light of the recent growth pattern of the United States, this paper presents a model where the endogenous engine of development is the learningby-doing process stemming from the usage of ICT for investment and consumption. Relying upon a two-sector framework (a' la Whelan) that distinguishes between ICT-producers and -users, our model provides a sound representation of the stylized facts of the Information Age.