Publication Type
Working Paper
Version
publishedVersion
Publication Date
3-2002
Abstract
This paper searches for a new growth engine in the new Info-Tech economy. IT-network effects are incorporated into Romer’s (1990) framework. Network effects support long-term steady state growth in per capita variables even without innovation, and growth rate increases with network externalities. Networked growth is sub-optimal, so should we break up an IT monopoly? To answer this we compare monopoly, Cournot and Bertrand set-ups. Cournot always ranks last socially, but Bertrand can be superior to monopoly if network effects are strong. When network interacts with Romer’s endogenous innovation, growth rate increases, probably by up to a percentage point per year.
Discipline
Economics | Growth and Development | Macroeconomics
Research Areas
Macroeconomics
Volume
04-2002
First Page
1
Last Page
28
Publisher
SMU Economics and Statistics Working Paper Series, No. 04-2002
City or Country
Singapore
Citation
LEUNG, Hing-Man.
Networked Growth. (2002). 04-2002, 1-28.
Available at: https://ink.library.smu.edu.sg/soe_research/694
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.