Endogenous Economic Growth through Connectivity
AbstractIn this paper we show the benefits of regional connectivity and specialization to growth. Starting with one region we show how welfare measured by utility per head increases as the number of connected regions increase. We assume a common connectivity infrastructure implemented by satellite, through which the 'Great Connector' (GC) is able to add new regions to the pool of connected regions by taking a tax form those already connected. We find that increasing production costs leads to faster transitions towards the steady state whereas increasing transportation and communication costs tends to lengthen the transition. The results point to reductions in transportation and communication costs in particular as a suitable vehicle to speed up growth. The results also show a strong positive effect of reductions in the cost of making new connections. This has a significant impact on both the steady state growth rate and on transitional growth, while significantly reducing the transition period.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by United Nations University, Maastricht Economic and social Research and training centre on Innovation and Technology in its series UNU-MERIT Working Paper Series with number 001.
Date of creation: 2010
Date of revision:
Contact details of provider:
Web page: http://www.merit.unu.edu
Connectivity; Satellites; Growth; Specialization; Networks;
Find related papers by JEL classification:
- O25 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- F15 - International Economics - - Trade - - - Economic Integration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
- NEP-FDG-2010-01-30 (Financial Development & Growth)
- NEP-GEO-2010-01-30 (Economic Geography)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hanson, G.H., 1999.
"`Market Potential, Increasing Returns, and Geographic Concentration,"
439, Research Seminar in International Economics, University of Michigan.
- H. Hanson, Gordon, 2005. "Market potential, increasing returns and geographic concentration," Journal of International Economics, Elsevier, vol. 67(1), pages 1-24, September.
- Gordon H. Hanson, 1998. "Market Potential, Increasing Returns, and Geographic Concentration," NBER Working Papers 6429, National Bureau of Economic Research, Inc.
- Lars-Hendrik Röller & Leonard Waverman, 1996.
"Telecommunications Infrastructure and Economic Development: A Simultaneous Approach,"
CIG Working Papers
FS IV 96-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Lars-Hendrik Roller & Leonard Waverman, 2001. "Telecommunications Infrastructure and Economic Development: A Simultaneous Approach," American Economic Review, American Economic Association, vol. 91(4), pages 909-923, September.
- Röller, Lars-Hendrik & Waverman, Leonard, 2000. "Telecommunications Infrastructure And Economic Development: A Simultaneous Approach," CEPR Discussion Papers 2399, C.E.P.R. Discussion Papers.
- Brunner, Martin & Strulik, Holger, 2002.
"Solution of perfect foresight saddlepoint problems: a simple method and applications,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 26(5), pages 737-753, May.
- Martin Brunner & Holger Strulik, 2002. "Code for "Solution of Perfect Foresight Sattlepoint Problems: A Simple Method and Applications"," QM&RBC Codes 93, Quantitative Macroeconomics & Real Business Cycles.
- Masahisa Fujita & Paul Krugman & Anthony J. Venables, 2001. "The Spatial Economy: Cities, Regions, and International Trade," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262561476.
- Romer, Paul M, 1990.
"Endogenous Technological Change,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S71-102, October.
- Davis, Donald R. & Weinstein, David E., 2003.
"Market Size, Linkages, and Productivity: A Study Of Japanese Regions,"
UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
- Donald R. Davis & David E. Weinstein, 2001. "Market Size, Linkages, and Productivity: A Study of Japanese Regions," NBER Working Papers 8518, National Bureau of Economic Research, Inc.
- Donald R. Davis & David E. Weinstein, 2002. "Market size, linkages, and productivity: A study of Japanese regions," Discussion Papers 0102-04, Columbia University, Department of Economics.
- Richard G. Harris, 1995. "Trade and Communication Costs," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 46-75, November.
- Romp, Ward & de Haan, Jakob, 2005.
"Public capital and economic growth: a critical survey,"
2/2005, European Investment Bank, Economics Department.
- Ward Romp & Jakob de Haan, 2007. "Public Capital and Economic Growth: A Critical Survey," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 8(s1), pages 6-52, 04.
- Belleflamme, Paul & Picard, Pierre & Thisse, Jacques-Francois, 2000.
"An Economic Theory of Regional Clusters,"
Journal of Urban Economics,
Elsevier, vol. 48(1), pages 158-184, July.
- Belleflamme, Paul, 2000. "An economic theory of regional clusters," Open Access publications from UniversitÃ© catholique de Louvain info:hdl:2078/17023, Université catholique de Louvain.
- Fukushima, Marcelo & Kikuchi, Toru, 2008.
"Competing Communications Networks and International Trade,"
7815, University Library of Munich, Germany.
- Fukushima, Marcelo & Kikuchi, Toru, 2008. "Competing Communications Networks and International Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 23, pages 91-103.
- Gilles Duranton & Matthew A. Turner, 2007.
"Urban growth and transportation,"
tecipa-305, University of Toronto, Department of Economics.
- Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
- Limao, Nuno & Venables, Anthony J., 1999. "Infrastructure, geographical disadvantage, and transport costs," Policy Research Working Paper Series 2257, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ad Notten).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.