Internet development holds the promise of transmitting economic value across physical space at zero marginal cost. In such a 'weightless economy', what factors matter for the location of economic activity and thus for economic development? This paper sketches a model of spatial dynamics over a three-dimensional globe, where transportation costs don't matter. The paper develops conditions under which clusters of activity emerge.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
2293.
Find related papers by JEL classification: D30 - Microeconomics - - Distribution - - - General O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Regional, Urban, and Rural Analyses O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes
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