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The Weightless Economy in Economic Development


  • Danny Quah


Can the increasing significance of knowledge-products in national income - the growing weightless economy - influence economic development? Those technologies reduce 'distance' between consumers and knowledge production. This paper analyzes a model embodying such a reduction. The model shows how demand-side attributes - consumer attitudes on complex goods; training, education, and skills for consumption (rather than production) - can importantly affect patterns of economic growth and development. Evidence from the failed Industrial Revolution in 14th-century China illustrates the empirical relevance of the analysis.

Suggested Citation

  • Danny Quah, 1999. "The Weightless Economy in Economic Development," CEP Discussion Papers dp0417, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0417

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    References listed on IDEAS

    1. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders in the Theory of Growth," Review of Economic Studies, Oxford University Press, vol. 58(1), pages 43-61.
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    5. Quah, Danny T, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," Economic Journal, Royal Economic Society, vol. 106(437), pages 1045-1055, July.
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    8. Wright, Brian Davern, 1983. "The Economics of Invention Incentives: Patents, Prizes, and Research Contracts," American Economic Review, American Economic Association, vol. 73(4), pages 691-707, September.
    9. Per Krusell & José-Víctor Ríos-Rull, 1996. "Vested Interests in a Positive Theory of Stagnation and Growth," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 301-329.
    10. Quah, Danny, 1996. "Twin peaks : growth and convergence in models of distribution dynamics," LSE Research Online Documents on Economics 2278, London School of Economics and Political Science, LSE Library.
    11. Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December.
    12. Danny Quah, 1996. "Twin Peaks: Growth and Convergence in Models of Distribution Dynamics," CEP Discussion Papers dp0280, Centre for Economic Performance, LSE.
    13. Keely, Louise & Quah, Danny, 1998. "Technology in Growth," CEPR Discussion Papers 1901, C.E.P.R. Discussion Papers.
    14. Dasgupta, Partha, 1988. "Patents, Priority and Imitation or, the Economics of Races and Waiting Games," Economic Journal, Royal Economic Society, vol. 98(389), pages 66-80, March.
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    Cited by:

    1. Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, Elsevier.
    2. Oldenski, Lindsay, 2012. "Export Versus FDI and the Communication of Complex Information," Journal of International Economics, Elsevier, vol. 87(2), pages 312-322.
    3. Andrés Rodríguez-Pose & Riccardo Crescenzi, 2008. "Mountains in a flat world: why proximity still matters for the location of economic activity," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 1(3), pages 371-388.
    4. Gern, Klaus-Jürgen & Gottschalk, Jan & Kamps, Christophe & Sander, Birgit & Scheide, Joachim & Strauß, Hubert, 2000. "Weltwirtschaft unter Volldampf," Open Access Publications from Kiel Institute for the World Economy 2499, Kiel Institute for the World Economy (IfW).
    5. Humphreys, David, 2010. "The great metals boom: A retrospective," Resources Policy, Elsevier, vol. 35(1), pages 1-13, March.
    6. Dalgaard, Carl-Johan & Strulik, Holger, 2011. "Energy distribution and economic growth," Resource and Energy Economics, Elsevier, vol. 33(4), pages 782-797.
    7. Cigan, Heidi, 2002. "The internet's contribution to progress and growth in Germany: The economic impact of the internet and the price structure of access," HWWA Reports 216, Hamburg Institute of International Economics (HWWA).
    8. Carlo MENON, 2014. "La propagation des grandes idées? L\'impact de l\'activité de brevet des firmes leader sur les inventeurs locaux," Cahiers du GREThA 2014-11, Groupe de Recherche en Economie Théorique et Appliquée.

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