Using aggregate data from 31 Organization for Economic Co-operation and Development (OECD) countries covering periods from 1982 to 2017, this study examines the notion that the level of product complexity is a good determinant of economic growth in the long run. We use the impulse-response function (IRF) computed from the consistent generalized method of moment panel vector autoregressive (GMM pVAR) model to estimate the response of the real output growth to a change in the economic complexity index. The IRF shows that the economic complexity index has a significant impact on economic growth; a 1 standard deviation shock to the economic complexity index at time 0 contributes around 2.34 percentage points to the average rate of growth of output within the first period. The point estimates are positive and significant up to the third period. The cumulative IRF shows that the aggregate impact on economic growth is about 4.4% in the long run. Compared to some widely used innovation proxies such as the gross expenditure on research and development and secondary school enrollment, the economic complexity index performs relatively better in our model in determining economic growth in the long run.

Over the last few decades, neo-liberal globalization-marked especially by the liberalization of finance, extended processes of commodification/privatization, free trade and free flow of capital-has coincided with rising income inequality and an ostensible decline in global poverty levels, the latter being largely attributed to China's and India's rapid economic development since the 1980s. Using a three-year-averaged non-overlapping data from 1991 to 2017 covering 39 OECD and western Balkan countries and applying the efficient Feasible Generalized Least Square (FGLS) estimation method, this article examines the effect of institutional 'quality', export complexity, and labour union density on income inequality. We have indications that neo-liberal globalization, measured using the KOF globalization index and sub-indicators, is positively correlated with income inequality. We have also indications that institutional 'quality', that is, mechanisms of 'good governance', tend to reduce income inequality. Importantly, the level of economic or export complexity and the degree of labour unionization were also found to reduce income inequality, while improving institutional 'quality' and mitigating downward pressures on wages.

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