Economic Growth And Information Technology: A Note

Abstract

The usage of information technology (IT) towards sustainable economic growth is found to yield three main effects: (1) an efficiency effect , (2) a scale effect, and (3) a capital utilization effect. The first two effects are multiplicative whereas the third effect is additive on aggregate output productivity. In essence, this paper suggests that IT is more productive only if the economy is capable of replacing its sustainable capital resources at a rate exceeding that of consumption sacrifice.