Currency Conversion White Papers
Demand-driven Knowledge Clusters in a Weightless Economy
Overview That knowledge and technology matter for economic growth and performance is widely accepted. However, most formal analyses of knowledge-driven economies have focused on the supply side: research and development and productivity. In modern high-tech economies where, say, information and communications technologies figure prominently, just as important is the demand side of markets for goods akin to knowledge. This paper develops a model of knowledge cluster formation in a geographical space, driven by demand-side characteristics. Knowledge concentrations in space spontaneously emerge, even when physical distance and transportation costs are irrelevant. These clusters manifest in equilibrium as waves on a smooth, otherwise featureless, three-dimensional globe; they arise to resolve the tension between spatial spillover externalities and the costs of adapting to new sophisticated knowledge-products.
| Publisher | LSE Economics Department | File Format | PDF, requires Acrobat Rdr 5 |
|---|---|---|---|
| Date Published | April 2001 | Downloads | 42 |
| Format | White Papers | ||
| Topics | |||
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