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Colin Davis
''Communication costs, network externalities, and long-run growth''
( 2007, Vol. 15 No.5 )
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: O3 - Technological Change; Research and Development: General
O4 - Economic Growth and Aggregate Productivity: General
Manuscript Received : Nov 02 2006 Manuscript Accepted : Feb 13 2007

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