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Communication, Innovation, and Growth

Listed author(s):
  • Pancs Romans

    ()

    (University of Rochester)

Registered author(s):

    The communication of ideas fosters technological progress and prevents regress. This paper develops a growth model wherein an economy's technology is endogenous to agents' communication decisions. In equilibrium, there is too little communication and insufficient risk-taking relative to the first best. The model can generate an abrupt take-off of output growth without an exogenous "catastrophe." A numerical example illustrates such a take-off. In that example, the endogenous fall in the cost of communication leads to the acceleration of the growth rate of output by facilitating the transmission of knowledge and by encouraging risk-taking.

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    File URL: https://www.degruyter.com/view/j/bejm.2010.10.1/bejm.2010.10.1.1922/bejm.2010.10.1.1922.xml?format=INT
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    Article provided by De Gruyter in its journal The B.E. Journal of Macroeconomics.

    Volume (Year): 10 (2010)
    Issue (Month): 1 (February)
    Pages: 1-54

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    Handle: RePEc:bpj:bejmac:v:10:y:2010:i:1:n:3
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