Working Paper
Computers and Economic Growth in Finland

The effect of computer technology on Finnish economic growth in 1983-96 is examined to shed light into the famous productivity paradox. Using the neoclassical growth accounting framework, the contribution of computer hardware, software and labor to gross and net output growth is assessed at aggregate level. The results suggest that a considerable amount of real growth can be attributed to computers. Almost eight per cent of the net growth can be attributed to information technology. This is about two thirds of the contribution of other fixed capital stock. However, the role of multifactor  productivity  still dominated  in  the  growth  accounting.  In addition to basic results, the assumptions of growth accounting are relaxed to extend the model.