DP2293 Internet Cluster Emergence

Author(s):	Danny Quah
Publication Date:	November 1999
Keyword(s):	Distribution Dynamics, Economic Geography, Internet, Location, Space, Time, Toepitz, Waves, Weightless Economy
JEL(s):	D30, O10, O18, O33
Programme Areas:	International Macroeconomics, International Trade and Regional Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=2293

Internet development holds the promise of transmitting economic value across physical space at zero marginal cost. In such a 'weightless economy', what factors matter for the location of economic activity and thus for economic development? This paper sketches a model of spatial dynamics over a three-dimensional globe, where transportation costs don't matter. The paper develops conditions under which clusters of activity emerge.