Information transmission and the bounds to growth

Cozzi, G.; Spinesi, L.

Information transmission and the bounds to growth

Cozzi, G.; Spinesi, L.

Authors

G. Cozzi

L. Spinesi

Abstract

This paper studies the long run growth implications of the presence of information acquisition and transmission costs. We assume that vertical innovation requires researchers to be informed on the current version of the product they want to improve upon; and we also assume that quasi-fixed managerial inputs are required for production in the manufacturing sector. Despite the fact the increases in total factor productivity cause R&D and managerial quasi-fixed labor costs to decrease in the same way as variable labor costs, the presence of these costs is sufficient to rule out the strong scale effect at all levels of the intertemporal returns to ideas. More importantly, the upper bound of long run growth rates crucially depends on information transmission costs.

Citation

Cozzi, G., & Spinesi, L. (2004). Information transmission and the bounds to growth. The B.E. Journal of Economic Analysis & Policy, 4(1),

Journal Article Type	Article
Publication Date	Jan 1, 2004
Deposit Date	Feb 18, 2010
Publicly Available Date	Feb 18, 2010
Journal	The B.E. Journal of Economic Analysis & Policy
Publisher	De Gruyter
Peer Reviewed	Peer Reviewed
Volume	4
Issue	1
Public URL	https://durham-repository.worktribe.com/output/1545987
Publisher URL	http://www.bepress.com/bejeap/topics/vol4/iss1/art6