This paper develops a simple model that shows how a country can endogenously become differentiated into an industrialized "core" and an agricultural "periphery. " In order to realize scale economies while minimizing transport costs, manufacturing firms tend to locate in the region with larger demand, but the location of demand itself depends on the distribution of manufacturing. Emergence of a core-periphery pattern depends on transportation costs, economies of scale, and the share of manufacturing in national income. The study of economic geography-of the location of factors of production in space-occupies a relatively small part of standard economic analysis. International trade theory, in particular, conventionally treats nations as dimensionless points (and frequently assumes zero transportation costs between countries as well). Admittedly, models descended from von Thunen (1826) play an important role in urban studies, while Hotelling-type models of locational competition get a reasonable degree of attention in industrial organization. On the whole, however, it seems fair to say that the study of economic geography plays at best a marginal role in economic theory. On the face of it, this neglect is surprising. The facts of economic geography are surely among the most striking features of real-world economies, at least to laymen. For example, one of the most remarkable things about the United States is that in a generally sparsely populated country, much of whose land is fertile, the bulk of the population resides in a few clusters of metropolitan areas; a quarter of the inhabitants are crowded into a not especially inviting section of the East Coast. It has often been noted that nighttime satellite

I analyze the salient features of networks and point out the similarities between the economic structure of networks and the structure of vertically related industries. The analysis focuses on positive consumption and production externalities, commonly called network externalities. I discuss their sources and their effects on pricing and market structure. I distinguish between results that do not depend on the underlying industry microstructure (the 'macro' approach) and those that do (the 'micro' approach). I analyze the issues of compatibility, coordination to technical standards, interconnection and interoperability, and their effects on pricing and quality of services and on the value of network links in various ownership structures. I also briefly discuss the issue of interconnection fees for bottleneck facilities.

Rothschild, and three most helpful referees. Very special thanks for many years of helpful insights are due to Richard Day and Luigi Ermini. Hamlet: “What a piece of work is a man! how noble in reason! how infinite in faculties!”

This paper examines the usefulness of the diffusion of innovation research in developing theoretical accounts of the adoption of complex and networked IT solutions. We contrast six conjectures underlying DOI research with field data obtained from the study of the diffusion of EDI. Our analysis shows that DOI based analyses miss some important facets in the diffusion of complex technologies. We suggest that complex IT solutions should be understood as socially constructed and learning intensive artifacts, which can be adopted for varying reasons within volatile diffusion arenas. Therefore DOI researchers should carefully recognize the complex, networked, and learning intensive features of technology; understand the role of institutional regimes, focus on process features (including histories) and key players in the diffusion arena, develop multi-layered theories that factor out mappings between different layers and locales, use multiple perspectives including political models, institutional models and theories of team behavior, and apply varying time scales while crafting accounts of what happened and why. In general the paper calls for a need to develop DOI theories at the site by using multiple levels of analysis.

This paper reviews the body of research that addresses `the social shaping of technology ' (SST) (MacKenzie & Wajcman 1985). In contrast to traditional approaches which only addressed the outcomes or 'impacts ' of technological change, this work examines the content of technology and the particular processes involved in innovation. We highlight the growth of socio-economic

Will the Internet redefine the "core" and the "periphery," creating a new geography, with neighborhoods connected not with streams and roads but with wires and microwave transmissions? An analogy to previous transportation and communications improvements is frequently made today: the transportation revolution of the 20 century permitted the deagglomeration of much physical production, and the Internet will now permit the deagglomeration of the intellectual and immaterial activities of the economy. But this analogy is faulty, and its historical reasoning inaccurate. In this paper, we first point out that at the end of the 20 Century most exchanges of physical goods take place within geographically defined neighborhoods. Previous rounds of infrastructure improvement always had a double effect, permitting decentralization of certain activities while actually reinforcing the attraction of cities for others. This is because all technologies of economic transactions increase the complexity and timeliness of interactions, making possible new forms of variety and differentiation of outputs. This is then reflected in more complex intermediate divisions of labor, or overall roundaboutness of the economy. Many of the transactions required by such an economy are dependent on what we call "handshake" interactions, not mere "conversational" interactions, which are the kind made feasible at a distance by the Internet. Hence, the Internet , all the while permitting the further locational deconcentration of certain routinized activities will also participate in reinforcing the need for urban concentration as the principal means to carry out "handshaking" in the complex, variety-based parts of the economy whose development it will encourage.

Discussions of technological change have offered sharply contrasting perspectives of technological change as gradual or incremental and the image of technological change as being rapid, even discontinuous. These alternative perspectives are bridged using the punctuated equilibrium framework of evolutionary biology. Using this framework, it is argued that the critical event is not a transformation of the technology, but speciation—the application of existing technology to a new domain of application. As a result of the distinct selection criteria and the degree of resource abundance in the new domain, a new technological form may emerge. The new technological form may be able to penetrate other niches and, in particular, may precipitate a process of 'creative destruction ' and out-compete prior technologies. This framework is applied to an historical study of wireless communication from the early experimental efforts of Hertz to the modern development of wireless telephony. 1.

The paper shows that the buy or sell recommendations of security analysts have a significant positive influence on the recommendations of the next two analysts. This influence can be traced to short-lived information in the most recent revisions. In contrast, the influence of the prevailing consensus is not stronger if the consensus accurately forecasts subsequent stock price movements. This indicates consensus herding consistent with models in which analysts herd based on little information. The consensus also has a stronger influence when market conditions are favorable. The resulting poorer information aggregation could cause bull markets to be intrinsically more "fragile" (e.g., Bikhchandani et al., J. Political Economy 100(5) (1992) 992-1026).

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Since World War II, developing nations have embarked on two massive changes in telecommunications policy. The first was the wave of nationalization of private companies that took place mostly in the 1950s and 1960s, and the second is the now ongoing process of re-privatization and, to a lesser degree, the introduction of competition. The purpose of this essay is to set forth the problems of contemporary neoliberal policy reform within the historical, economic and political context of these countries to assess the success of reform to date and to suggest future directions for research that might improve the performance of the sector. The existing literature well documents the decline in performance during the nationalization era and the improvements that reform usually brings; however, relatively little is known about the relationship between the details of reform and subsequent performance, or about the institutional factors that contribute to the stability of reform. The main conclusions are: (1) the recent literature on policy reform probably understates the importance of constructing regulatory governance institutions that are not captured by the newly reformed incumbent monopolist; (2) reform in some countries has focused too much on maximizing the revenues from the sale of state-owned enterprises rather than the long-run economic benefits of reform to consumers and society at large; and (3) too little attention has been given to creating an institutional environment, regulatory and legal, that supports a private and, where possible, competitive industry. The paper also argues that small developing countries