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Endogenous growth and intermediation in an 'archipelago' economy

Zilibotti, F. (1993) Endogenous growth and intermediation in an 'archipelago' economy. CEPDP, 167. Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

A general equilibrium model based on the parable of an economy of many islands shows the market imperfections in the intermediation activity affect economic growth and possibly prevent take off into sustained growth. The inhabitants of different islands accumulate heterogeneous assets and transportation-type intermediation allows for better allocation of the productive resources. The development process is accompanied by a reduction in intermediation costs, which induces firms to adopt more efficient techniques and sustains economic growth. A laissez-faire economy suffers from two distortions: the existence of market imperfections and a ''thick market'' externality.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 1993 F.Zilibotti
Library of Congress subject classification: H Social Sciences > HF Commerce
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 167
Date Deposited: 19 Aug 2008 10:25
URL: http://eprints.lse.ac.uk/20939/

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