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Communication costs, network externalities, and long-run growth

Author

Listed:
  • Colin Davis

    (Kobe University)

Abstract

This note examines the effect of per-period communication costs in a model of expanding product variety. It is shown that while a decrease in communication costs leads to growth in aggregate output, this growth is only transitional with the growth rate falling to zero in the long run as the result of a congestion effect.

Suggested Citation

  • Colin Davis, 2007. "Communication costs, network externalities, and long-run growth," Economics Bulletin, AccessEcon, vol. 15(5), pages 1-9.
    • Handle: RePEc:ebl:ecbull:eb-06o30028
    as

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    File URL: http://www.accessecon.com/pubs/EB/2007/Volume15/EB-06O30028A.pdf
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    References listed on IDEAS

    as
    1. Toru Kikuchi & Tetsuro Ichikawa, 2002. "Congestible communications networks and international trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 35(2), pages 331-340, May.
    2. Richard G. Harris, 1995. "Trade and Communication Costs," Canadian Journal of Economics, Canadian Economics Association, vol. 28(s1), pages 46-75, November.
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    More about this item

    JEL classification:

    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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