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In this paper we address the question of how telecommunications affect economic growth, by estimating the effect of direct investment in telecommunications infrastructures on aggregate output, employment, and investment in Spain. In contrast with previous studies, the problem is analyzed in a dynamic multivariate framework which allows for explicit consideration of feedbacks among all the variables. We find significant effects of the investment in infrastructures of telecommunications on aggregate output, employment and investment which extend for several years. This might justify a policy for stimulating investment in this sector.