Economic growth in the New Economy: evidence from advanced economies
Firstly, by surveying recent research, this paper confirms that both the production and use of ICT have been the factors behind the improved economic performance of the United States in the 1990s. However, the evidence for the New Economy is much weaker outside the United States. Secondly, the paper applies growth accounting to estimate the impacts in Finland. It is shown that the contribution to output growth from ICT use has increased from 0.3 percentage points in the early 1990s to 0.7 points in the late 1990s. In addition, the fast growth of multi-factor productivity in the ICT-producing industries has had an even larger impact. But, unlike in the US, there has been no acceleration in the trend rate of labour productivity.