DP2094 The Weightless Economy in Economic Development

Author(s):	Danny Quah
Publication Date:	March 1999
Keyword(s):	China, copyright, Growth, Information Technology, intellectual property, knowledge-product, patent, software, superstars, tacit knowledge
JEL(s):	N15, O11, O14, O33
Programme Areas:	International Macroeconomics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=2094

Can the increasing significance of knowledge-products in national income---the growing weightless economy---influence economic development? Those technologies reduce ``distance'' between consumers and knowledge production. This paper analyzes a model embodying such a reduction. The model shows how demand-side attributes---consumer attitudes on complex goods; training, education, and skills for consumption (rather than production)---can importantly affect patterns of economic growth and development. Evidence from the failed Industrial Revolution in 14th-century China illustrates the empirical relevance of the analysis.