The Day After Covid-19: Implications for Growth, Specialization, and Inequality

38 Pages Posted: 12 May 2021

See all articles by Stefano Magrini

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia

Alessandro Spiganti

Ca Foscari University of Venice

Date Written: May 2, 2021

Abstract

In the post-pandemic world, digital communication will be integral part of daily working to a higher extent than before, with a disproportionally strong impact on knowledge-based activities, like innovation and research. We present a multi-area endogenous growth model where abstract knowledge flows at no cost across space but tacit knowledge arises from the interaction between researchers and hence is hampered by distance. Digital communication reduces this “cost of distance” for flows of tacit knowledge and reinforces productive specialization. This increases the system-wide growth rate, but at the cost of an increase in inequality within and across areas.

Keywords: Agglomeration, videoconferencing, innovation, disparities

JEL Classification: J24, O31, O41, R12

Suggested Citation

Magrini, Stefano and Spiganti, Alessandro, The Day After Covid-19: Implications for Growth, Specialization, and Inequality (May 2, 2021). University Ca' Foscari of Venice, Dept. of Economics Research Paper Series No. 13/WP/2021, Available at SSRN: https://ssrn.com/abstract=3841944 or http://dx.doi.org/10.2139/ssrn.3841944

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Alessandro Spiganti (Contact Author)

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

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