Monday, January 30, 2012

3 February 2012: Information Technology and Indian Economy

Jyoti Vig
University of Minnesota

This paper attempts to study the impact of information technology on
explaining the structural features of the Indian economy such as an
increasing share of services in GDP and an increase in contribution of
services in the acceleration in output per worker since 1993-2004
(Bosworth and Collins 2008). Using a multi-sector framework with three
final goods and one intermediate good (stylized as information
technology) we ask if this framework can reproduce the above
structural features.

Simulating greater absorption of IT in the economy (Jorgenson 2001) we
observe that our benchmark model allows for a close fit of GDP and
sector outputs for the period 1991 to 2003, however the model
severally undershoots for the period thereafter. To mimic the impact
of greater IT absorption in the domestic economy we apply a parametric
experiment and call it the “Jorgenson Effect”. We ask whether this new
economy can account for the sharp acceleration in GDP and sectoral
outputs observed in the benchmark. Though we observe a closer fit of
the data, the new economy still undershoots growth for the period

Date: February 3, 2012
Time: 11:30 A.M.

Seminar Room 2
Indian Statistical Institute Delhi Centre,
7, S. J. S. Sansanwal Marg,
New Delhi-110016 (INDIA)


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