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Wants and Past Knowledge: Growth Cycles with Emerging Industries
This paper develops a theory of endogenous growth cycles focusing on the interaction between consumers desire to satisfy an indefinite range of wants and firms incentive to utilize knowledge from past production experiences. The authors show that firms endogenously form a number of distinguishable industries as accumulated knowledge induces them to agglomerate in the technology space.
Link
http://econpapers.repec.org/scripts/redir.pl?u=http%3A%2F%2Fwww2.econ.osaka-u.ac.jp%2Flibrary%2Fglobal%2Fdp%2F0603.pdf;h=repec:osk:wpaper:0603