Federici, Daniela and Saltari, Enrico and Wymer, Clifford (2015): Endogenizing the ICT sector: A multisector approach.

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Abstract
In this paper we present a nonlinear model where ICT sector is endogenized. In the model there are two intermediate goods: a traditional good produced by capital and labor and the ICT good produced by innovative capital and skilled labor. The final good is obtained combining the two intermediate goods. The model is specified and estimated as continuoustime general disequilibrium framework. Our main results are the following. We find that the elasticity of substitution of the aggregate sector has a value intermediate between that of the ICT sector and that of the traditional sector, since the input complementarity is tighter in the former than in the latter. Moreover, in all the sectors elasticities are well below 1. As for the traditional sector, whose share is predominant in the production of the final good, the input complementarity helps explain most of the labour share decline of Italian economy as a consequence of the slowdown in the growth of capital intensity. In the ICT sector, technological progress, both in the form of capital augmenting and capital bias, showed a decline over the sample period with an obvious negative consequence on the global evolution of the technical progress. The results about the dynamics of the two intermediate sectors allows to interpret the "Italian paradox" of an industrial structure marked by an increasing weight of the traditional sector.
Item Type:  MPRA Paper 

Original Title:  Endogenizing the ICT sector: A multisector approach 
Language:  English 
Keywords:  Nested CES production function; Elasticity of substitution; Endogenous technical progress and ICT technical change; Disequilibrium model; Continuoustime econometrics. 
Subjects:  C  Mathematical and Quantitative Methods > C5  Econometric Modeling > C51  Model Construction and Estimation E  Macroeconomics and Monetary Economics > E2  Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E22  Investment ; Capital ; Intangible Capital ; Capacity E  Macroeconomics and Monetary Economics > E2  Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23  Production O  Economic Development, Innovation, Technological Change, and Growth > O4  Economic Growth and Aggregate Productivity > O41  One, Two, and Multisector Growth Models 
Item ID:  66723 
Depositing User:  Prof. Enrico Saltari 
Date Deposited:  17 Sep 2015 18:34 
Last Modified:  28 Sep 2019 08:48 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/66723 