TELECOMMUNICATIONS AND GROWTH - THE CONTRIBUTION OF TELECOMMUNICATIONS INFRASTRUCTURE INVESTMENT TO AGGREGATE AND SECTORAL PRODUCTIVITY

Given the weakening economic performance of the USA in recent years, p roductivity growth has become increasingly the focus of discussions by policy makers at both the federal and state level. While much attenti on has been directed towards the institutional and social causes under lying stagnant productivity levels, little effort has been given to id entifying and measuring the factors that have consistently contributed to the nation's productivity over recent historical periods. For exam ple, industry-specific advancements that not only affect a sector's ow n productivity but permeate the economy can contribute to overall nati onal productivity. This is the case with telecommunications. The empir ical findings in this study suggest that investment in telecommunicati ons infrastructure is causally related to the nation's total factor pr oductivity and that contributions to aggregate and sectoral productivi ty growth rates from telecommunications advancements are both quantifi able and substantial.