The Internet and Economic Growth

In one study, we estimate the effect of broadband infrastructure on economic growth during the introduction phase of high-speed internet. Using annual data of OECD countries over the period 1996-2007, we find that the introduction and expansion of broadband internet was an important determinant of economic growth. During the period, a 10 percentage-point increase in broadband penetration - roughly the distance of Germany from leading OECD countries - raised annual per-capita growth by 0.9-1.5 percentage points. The estimation employs an instrumental-variable approach that exploits the size of pre-existing voice-telephony and cable-TV networks and a logistic form of the diffusion curve.

Here you can find a short non-technical overview on this topic.

Research paper:

Broadband Infrastructure and Economic Growth (with N. Czernich, O. Falck, and T. Kretschmer). Economic Journal 121 (552): 505-532, 2011

Material available only in German

Non-technical contribution:

Breitbandinfrastruktur und wissensbasiertes volkswirtschaftliches Wachstum (with N. Czernich, O. Falck, and T. Kretschmer). ifo Schnelldienst 62 (23): 29-34, 2009