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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: www.cepr.org/pubs/dps/DP2293.asp


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.

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