Information carrier technology and growth

Abstract This paper develops an endogenous growth model that incorporates information carrier technology, highlighting that knowledge loss during storage and low communication efficiency hinder innovation. The model identifies a turning point: prior to it, economic stagnation prevails with unchanging production technology; afterward, research and development activity drives technological progress and economic growth. On the asymptotic balanced growth path, the growth rates of information carrier technology and population act as substitutes in determining the growth rate of per capita output and the fraction of labor allocated to research and development. This model offers novel insights into unified growth theory and the mechanisms underpinning the digital economy.