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Linguistic Diversity in the very Long Run

This paper presents an endogenous growth model in which language is an engine of growth. Language is an input into production and exchange: agents who can communicate easily are able to produce and consume more. At the same time, economic interaction among agents aects the evolution of language. The model can match a key stylized fact of historical linguistics|a global increase, followed by decline, in linguistic diversity. In addition, the model generates the endogenous creation and destruction of distinct linguistic groups.