Network structure and economic growth

Abstract

This paper develops a multisector endogenous growth model which embeds a technology network that captures heterogeneous intersectoral knowledge spillovers. We show that the growth rate of knowledge is equal to the dominant eigenvalue of the technology network. The structure of the technology network is crucial in determining the effect of knowledge spillover. Specifically, the sparsity of the technology network imposes an upper bound on the impact of knowledge spillovers, which then determines the growth rate at both the sectoral and aggregate level.