ABSTRACT
This paper investigates the impact of internet on economic growth and this impact during the recession. The data are drawn from World Bank in a panel of 201 countries from 1988 to 2010. Results from an OLS model reveal that a 10 percentage point increase in internet penetration rate raises real GDP per capita by 0.57 to 0.63 percentage points. Dur- ing the recession relative to expansion, the coefficient of internet reduces but it still remains statistically positive. This suggests that internet provides a way to solve the problem of economic recession. Our results are robust to the inclusion of time and country fixed effects.