Abstract

I thank Ana Lamo for early help with the data. The calculations here were done using a combination of lisp, perl, andtsrf. The European Commission kindly provided maps and other information. Nontechnical Summary GDP will become increasingly weightless as economies grow progressively knowledge- and information-based. A succinct term for this is “dematerialization.” With increasing dematerialization, traditional economic mechanisms of gradual dynamic adjustment and spatial spillovers could well become irrelevant, at the same time that the nation-state withers in importance. This view derives from two distinct arguments. First, as bandwidth increases without bound for transporting economic value across space, the importance of physical distance, slow adjustment, and spatial agglomeration benefits must correspondingly decrease. Second, when economic value no longer needs to take any physical manifestation (whether that value subsequently is in the form of electronic accounts on a clearing system,

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