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Connectivity and economic growth

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dc.date.accessioned 2016-03-09 en
dc.date.accessioned 2020-02-19T16:10:03Z
dc.date.available 2020-02-19T16:10:03Z
dc.date.issued 2016-04-21 en
dc.identifier.uri http://hdl.handle.net/20.500.11910/9405
dc.description.abstract We present a simple theoretical model that illustrates the benefits of regional connectivity and specialization for growth. Starting with one community, we show how welfare measured by utility per head increases as the number of connected communities increases. We assume a common connectivity infrastructure through which a central planner is able to add new communities to the pool of already connected communities, a costly but rewarding activity that is funded by levying a tax on those already connected. We find that increasing production costs lead to faster transitions toward the steady state, whereas increasing transportation and communication costs tend to lengthen the transition. The results point to reductions in transportation and communication costs, in particular, as a suitable vehicle for speeding up growth and underline the existence of a positive scale effect that induces integration and reinforces both transitional and steady state growth. en
dc.format.medium Print en
dc.publisher Cambridge University Press en
dc.title Connectivity and economic growth en
dc.type Journal Article en
dc.description.version Y en
dc.ProjectNumber N/A en
dc.Volume September en
dc.BudgetYear 2015/16 en
dc.ResearchGroup Economic Perfomance and Development en
dc.SourceTitle Macroeconomic Dynamics en
dc.PlaceOfPublication New York, USA en
dc.ArchiveNumber 9089 en
dc.PageNumber Online en
dc.outputnumber 7892 en
dc.bibliographictitle Van Zon, A. & Mupela, E. (2015) Connectivity and economic growth. <i>Macroeconomic Dynamics</i>. September:Online. en
dc.publicationyear 2015 en
dc.contributor.author1 Van Zon, A. en
dc.contributor.author2 Mupela, E. en

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