Digitalization in Open Economies: Theory and Policy Implications (Contributions to Economics)

✍ Scribed by Michael Vogelsang

• Publisher: Physica
• Year: 2010
• Tongue: English
• Leaves: 270
• Category: Library

✦ Synopsis

Digital strings are not visible, but affect all economic segments. This book studies the phenomenon of digitalization with the instruments of economics in order to explore the interdependencies between digitalization, economic policy, and macroeconomic variables of open economies. Digitalization is separated into the three components networks, IT services, and digital goods which are then incorporated into macroeconomic models of trade theory in open economies. This approach allows to formally describe the cross-effects between digitalization and macroeconomic variables of a country. Specifically, it is used to analyze interdependencies between macroeconomic variables and networks, IT services, and digital goods, and to determine the challenges of digitalization for economic policy and regulation.

✦ Table of Contents

Digitalization in Open Economies
Part I Characteristics of the Digital Economy
1 Introduction
2 Digitalization
2.1 Overview on Digitalization
2.1.1 History
2.1.2 Digitalization and the Internet
2.1.2.1 Structure of the Internet
2.1.2.2 General Purpose Technology
2.1.3 Indices of Digitalization
2.2 Characteristics of Networks, IT Servicesand Digital Goods
2.2.1 Networks
2.2.2 IT Services
2.2.3 Digital Goods
2.2.4 Related Topics
2.2.4.1 Information and Communication Technology (ICT)
2.2.4.2 Software on the Borderline Between Goods and Services
2.2.4.3 Open-Source Software
2.3 Recent Developments
2.3.1 Networks
2.3.1.1 Overview
2.3.1.2 Peering and Transit
2.3.1.3 Price Development
2.3.1.4 Recent Innovations
2.3.2 IT Services
2.3.2.1 Overview
2.3.2.2 Outsourcing and Offshoring
2.3.2.3 Recent Innovations: Service-Oriented Architectures
2.3.3 Digital Goods
2.3.3.1 Overview
2.3.3.2 Music Industry
2.3.3.3 Recent Innovations
2.3.4 Related Topics
2.3.4.1 Computer Power and Price Measurement
2.3.4.2 ICT
2.3.4.3 Voice over IP
2.3.4.4 E-Commerce
2.3.4.5 Digital Divide
2.4 The Impact for Productivity: Results fromICT Research
2.4.1 Introduction
2.4.2 Theoretical Foundations: Neoclassical Growth Assumptions
2.4.2.1 Neoclassical Case
2.4.3 Productivity Accounting and Empirical Studies Regarding ICT
2.4.3.1 Firm-Level Studies
2.4.3.2 Sectoral Decomposition of Productivity Figures: Industry-Level Studies
2.4.3.3 Macro-Level Studies and Sectoral Decomposition of TFP
2.4.3.4 Interpretation and Limitations
2.4.4 Productivity Measurement and Digital Goods
2.4.4.1 Software Accounting
2.4.5 Summary and Open Questions
2.4.5.1 Common Sense
2.4.5.2 Questions to be Solved
2.5 Summary of Part I
Part II Economic Theory
3 Theoretical Foundations
3.1 Some Microeconomic Aspects
3.1.1 Networks
3.1.2 IT Services
3.1.3 Digital Goods
3.1.4 Market Structure
3.2 Dynamics of Two-Sided Markets
3.2.1 Introduction
3.2.2 Two Sided Markets: Literature Overview
3.2.2.1 Empirical Evidence and Anti-Trust Policy
3.2.3 Model: Basic Set-Up of Two-Sided MarketsOptimization
3.2.4 Model: Development of a Business Strategy
3.2.4.1 Splitting the Phases
3.2.5 Summary
3.3 Theories on Internationalization
3.3.1 Key Drivers in Management Literature
3.3.1.1 Business Strategies and Internationalization
3.3.1.2 IT Outsourcing and IT Offshoring
3.3.2 Macroeconomic Theorieson Internationalization
3.3.2.1 Traditional Approaches: Trade and FDI
3.3.2.2 Theory on Fragmentation
3.4 IT Administration Rights
3.4.1 Introduction
3.4.2 The Model of IT Administration Rights
3.4.3 Distribution of IT Administration Rights
3.4.4 Potential Caveats
3.4.5 Alternative Formulation
3.4.6 Summary and Outlook
4 Networks in a Fragmentation Model
4.1 Setup of the Model
4.2 Trade-Off Between International and Local Producers
4.3 Digitalization
4.4 Interpretation
5 IT Services in a General Equilibrium Macro-Model
5.1 Introduction
5.2 General Equilibrium in the Integrated Economy
5.2.1 Structure of the Model
5.2.2 Basic Set-Up: Integrated Economy
5.2.2.1 Demand
5.2.2.2 Production
5.2.3 Organization
5.2.3.1 Timing of the Nash Bargaining
5.2.3.2 Optimal Output
5.2.3.3 Comparison of Separation, Integration and Complete Contracts
5.2.4 Ownership Structures
5.2.5 General Equilibrium
5.3 Two-Country Model
5.3.1 Factor Price Equalization
5.3.2 Trade in Intermediates
5.3.3 Trade in IT Services
5.4 Summary and Interpretation
6 Model: Entry of a Digital Goods Producer
6.1 Introduction
6.2 Quality Competition
6.2.1 Closed Economy
6.2.2 Market Entry from Abroad
6.3 Two-Sided Markets
6.4 Interpretation
6.4.1 Potential Expansion
7 Comparison of the Models
7.1 Framework
7.2 Differences in Theoretical Structures
7.3 Main Conclusions
Part III Economic Policy
8 General Political Perspectives
8.1 Economic Policy: Principles, Objectives,and Instruments
8.1.1 General Goals
8.1.2 Principles of Economic Policyin the Digital Age
8.1.3 Overcoming the Digital Divide
8.1.4 Media Policy
8.1.4.1 Trade-Off Between Culture and Business
8.1.4.2 Broadcast Regulation
8.1.5 Data Privacy and Safety
8.1.6 Regulation and Competition Policy
8.1.6.1 Conceptual Issues
8.1.6.2 Modus Operandi in EU
8.1.7 Digitalization, Employment, and Education
8.1.8 Trade Policy
8.1.8.1 Overview
8.1.8.2 Types of Trade Agreements
8.2 Institutional Players
8.2.1 The WTO System
8.2.1.1 Overview
8.2.1.2 GATT
8.2.1.3 GATS System
8.2.1.4 Differences Between GATS and GATT
8.2.1.5 TRIPS Agreement and WIPO
8.2.1.6 ITA
8.2.1.7 Moratorium on E-Commerce
8.2.1.8 GPA
8.2.1.9 Dispute Settlement
8.2.1.10 Summary of WTO System
8.2.2 The European Community Approach
8.2.3 Internet Governance
9 Policy for Networks, Services, Digital Goods
9.1 Networks
9.1.1 Political Goals
9.1.2 Access Prices and Interconnection
9.1.2.1 Lessons from the Telecommunications Sector
9.1.2.2 Theory of Interconnection Applied on IP-Based Connections
9.1.3 Regulatory Instruments
9.1.4 New Generation Networks
9.1.5 Network Neutrality
9.2 IT Services
9.2.1 Goals
9.2.2 Standards
9.2.3 GATS and IT Services
9.2.4 National Initiatives and E-Government
9.3 Digital Goods
9.3.1 Overview and Policy Challenges
9.3.2 Intellectual Property Rights (IPR)
9.3.2.1 IPR and Competition Policy
9.3.2.2 Copyright Protection and Digital Rights Management
9.3.2.3 Software Patents in the Light of Theory
9.3.3 Trade Policy
9.3.3.1 Digitally-Delivered Goods: GATT or GATS?
9.3.3.2 EC and US Positions in WTO Negotiations
9.3.3.3 Prospects and Evaluation of the Classification Issue
9.3.4 Consequences of the Two-Sided MarketsApproach
9.4 Convergence Issues
9.4.1 Overview
9.4.2 Voice Over IP
9.4.3 Broadcast Over IP
9.4.4 International Policy Aspects
10 Integrating Theory and Policy
10.1 Conclusions from Parts I–III
10.2 Proposal for an Integrated Policy Perspective
10.3 Policy Challenges
11 Summary
12 Appendices
12.1 Telegraph Lines
12.2 Sells and Purchases Ordered over the Internet
12.3 Exports and Communication: An Empirical Analysis
12.3.1 Descriptive Analysis
12.3.2 Econometric Analysis I: Estimationfor Total Exports
12.3.3 Econometric Analysis II: Estimationfor Export Share
12.3.4 Interpretation
12.4 Variables of the IT Services Model
12.5 Calculation of the Demand Function for y(i)
12.6 Incomplete Contracts
12.7 Complete Contracts
12.7.1 Calculation of First Derivate of with Regardto
12.7.2 Number of Variants Produced in a Country
12.8 EU-Markets Susceptible to Ex Ante Regulation
12.9 Regulatory Price Instruments
References