Communication costs, network externalities, and long-run growth

Colin Davis

Economics Bulletin, 2007, vol. 15, issue 5, 1-9

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.

JEL-codes: O3 O4 (search for similar items in EconPapers)
Date: 2007-02-13
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