Telecommunications, factor substitution and economic growth

De La Grandville (1989) suggests that large elasticities of substitution between factor inputs and a change in relative prices might (i) explain historical economic growth in developing countries and (ii) account for the varying growth among sectors within economies undergoing technological change. Yuhn (1991) supports de La Grandville first hypothesis in his finding that Korea's economic growth relative to the United States, over a given interval, could be explained by the higher elasticities of substitution between labor and capital in Korea relative to those of the United States. This paper explores de La Grandville's second hypothesis with respect to telecommunications. (JEL L9, O).