How Much Does IT Consumption Matter for Growth? Evidence from National Accounts

Francesco Venturini, Polytechnic University of Marche

Abstract

An international comparison on the adoption of Information Technologies by households is carried out in this paper by employing a growth accounting approach. It is shown that home computers contributed to the recent output growth of the EU and the US more than some kinds of high-tech investment (communication equipment and software). This finding suggests that the literature on new economy has thus far left unexplored a sizeable part of IT-led growth. Whereas the major continental countries in Europe exhibit a scarce propensity to adopt home computers, Denmark and the UK stand out for a large growth contribution of IT consumption, even superior to the US. Overall, the divergence between the EU and the US in the dynamic pattern of output growth is found to be widely dependent on a different application of ICT both for production and consumption aims.