There is a large body of research investigating the impact of information and communication technologies (ICT) on economic growth; however, the empirical evidence on growth and its volatility simultaneously driven by ICT diffusion has still remained scarce so far. To fill this void, system...

We develop a model in which innovations in an economy's growth potential are an important driving force of the business cycle. The framework shares the emphasis of the recent new shock literature on revisions of beliefs about the future as a source of fluctuations, but differs by tying these...