Singh, Nirvikar (2008): Transaction Costs, Information Technology and Development.
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This paper examines the impact of transaction costs on economic welfare and development. We extend the static model of Romer (1994), in which transaction costs reduce welfare by the reducing the equilibrium number of intermediate goods, and estimate the welfare losses in the case of domestic transaction costs. The main analysis of the paper extends a dynamic model of Ciccone and Matsuyama (1996) to incorporate transaction costs. We show that high transaction costs reduce the long-run level of development, and may arrest development completely in the extreme case. We also discuss the role of information technology in reducing transaction costs, and offer some preliminary evidence from rural India to illustrate how these reductions may occur through the use of such technologies.
|Item Type:||MPRA Paper|
|Original Title:||Transaction Costs, Information Technology and Development|
|Keywords:||transaction costs; information technology; Internet; development; India|
|Subjects:||P - Economic Systems > P2 - Socialist Systems and Transitional Economies
L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L31 - Nonprofit Institutions; NGOs
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O12 - Microeconomic Analyses of Economic Development
|Depositing User:||Nirvikar Singh|
|Date Deposited:||13. Jun 2008 07:15|
|Last Modified:||12. Feb 2013 14:01|
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