The role of ICT productivity in Korea-Japan multifactor CES productions and trades

Jiyoung Kim, Satoshi Nakano, Kazuhiko Nishimura

Research output: Contribution to journalArticlepeer-review

Abstract

In this paper, we examine the economic impact of information and communication technology (ICT) innovation, within a general equilibrium framework of empirically estimated constant-elasticity-of-substitution (CES) production frontiers. Such innovation generates not only productivity growth and price changes, but it also triggers changes in the economic structure of production and trade patterns. This process ostensibly increases the social welfare. To study the impact of ICT innovation, we construct a bilateral general-equilibrium model that spans 350 commodities and sectors of trade between Japan and the Republic of Korea. We estimate all CES parameters from published statistics, including linked input–output tables and Comtrade databases. A small exogenous productivity shock in the ICT is examined in terms of potential price reductions of all commodities in both countries.

Original languageEnglish
Pages (from-to)1613-1627
Number of pages15
JournalApplied Economics
Volume53
Issue number14
DOIs
Publication statusPublished - 2021

Keywords

  • Armington elasticities
  • CES production function
  • general equilibrium modelling
  • information and communication technology
  • linked input–output table

ASJC Scopus subject areas

  • Economics and Econometrics

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