Communication, Innovation, and Growth
Romans Pancs
The B.E. Journal of Macroeconomics, 2010, vol. 10, issue 1, 54
Abstract:
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.
Keywords: communication; innovation; growth (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:bejmac:v:10:y:2010:i:1:n:3
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DOI: 10.2202/1935-1690.1922
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