UNIVERSITÄT POTSDAM - Prof. Dr. Paul JJ Welfens

is also included which means that three-fourths of Euroland is covered. Comparing
Euroland with the US on the basis of this limited sample is also inadequate since the
comparable basis would be roughly California plus Washington, New York, Michigan,
Illinois, Massachusetts and Florida.
The ECB’s first statement, namely that in the period 1990-2000 GDP per hour
worked in the euro area and the US was roughly equal, namely 1.8% and 1.7%, is misleading
since the US unemployment rate has reduced whereas it has increased in the
euro area; a methodologically correct analysis would calculate a hypothetical “comparable
employment labor productivity growth” (CELPG) – that is with a lower unemployment
rate / a higher employment rate in the euro zone whose development would
match that of the US; the CELPG rate would on theoretical grounds certainly be lower
than 1.8% for Euroland. The ECB’s second main statement is based on the comparison
of the US with Germany plus France, Italy, and Finland which is doubtful per se and
even more so when the main conclusion is derived: “This suggests that also in the
United States there is little evidence of positive spillover effects from ICT-producing
sectors to the rest of the economy in the period from 1991 to 1998” (ECB, 2001, p.43);
however, the empirical analysis of STIROH (2001) and VAN ARK (2001) suggests the
opposite. The third statement of the ECB also is rather doubtful and is based on an aggregate
growth accounting exercise with France, Germany, Italy and the Netherlands
representing Euroland. The ECB shows with respect to explaining labor productivity
growth – which declined from 2.4% in 1991-95 to 1.3% in 1996-99 – that ICT capital
deepening has gained in relevance for labor productivity over time: 0.39 percentage
points in 1996-99 compared to 0.26 in 1991-95. The role of other capital deepening has
declined from 0.73 percentage points to 0.28; that of total factor productivity growth
has fallen from 1.41 points to 0.61 percentage points – the latter might however simply
reflect a complex overlap of procyclical effects with unclear labor market effects on the
one hand and ICT spillover effects on the other hand. The conclusion drawn by the
ECB is not well founded as it states (ECB, 2001, p. 48): “The analysis of output and
productivity developments in the euro area undertaken in this article suggests that in
the period up to 2000 there were only very limited, if any, positive spillover effects
from the use of ICT.” It is unclear why the ECB is not also taking a look at non-euro
member countries such as the UK and Sweden. For the ECB in its certainly difficult
challenge to conduct monetary policy in a way which is both noninflationary and supporting
growth and employment – the latter to the extent that this causes minor inflation
risks.
ICT Analysis Versus ICT Potential Dynamics
It is not only important to understand the actual ICT dynamics in the EU which may or
may not be characterized by spillover effects in ICT use; it also is important to analyze
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