Complex Dynamics in a Simple Model of Economic Specialization
This paper studies the dynamics of economic growth based on specialization in a network structure belonging to the family of Cellular Automata. The basic mechanism for the diffusion of specialization is the one identified by Allyn Young (1928): the specialization of some agents represents an increase in the extent of the market for others and may facilitate their specialization. We show that the the diffusion of specialization generally increases: i) with an increase of the dimension of the neighborhood, ii) with a reduction of the extent of the market necessary for specialization and iii) with a reduction of the extent of the market necessary to remain specialized (or with a reduction of the intensity of competition). The same parameters affect the qualitative features of the dynamics: the network configuration may not settle to a steady state and display a complex network dynamics. We also discuss the role of initial conditions of the dynamical system and the activation rules, that we relate to the organization of the economic activity.
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