The importance of being IT

Abstract

First the present article reports a growth accounting exercise for Italy and other seven OECD countries (USA, UK, Finland, Spain, France, Germany and Ireland) for the period 1980 - 2004. The exercise aims at singling out the principal growth factors among ICT / non ICT capital services, labour and total factor productivity, focusing above all on the first and last one. Then the paper compares the growth accounting results with two econometric models which use a Cobb Douglas production function, the same four factors and an ordinary least squares approach to determine the weight of each element. The comparison shows that, in the considered period, the new economy has been largely the first growth factor for all the considered countries except Italy and Spain. The estimations made show the new economy gave, in the period 1980-2004, a direct and indirect contribution to GDP growth of indicatively the 50% (as unweighed average of the considered countries).