Complexity, Specialization, and Growth

Abstract

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Variety, Competition, and Population in Economic Growth: Theory and Empirics

“…However, by considering six different geographical regions separately, it is observed that only for Europe and North America the parameter on the density variable is significantly negative. In line with the "O-Ring theory", the evidence presented by Ferrarini and Scaramozzino (2016) supports the idea that, especially for advanced countries, it can be the case that the productivity-gains from more specialization are smaller than the associated productivity-losses due to increased complexity in production. Unlike Ferrarini and Scaramozzino, we focus solely on advanced (OECD) countries, employ a different econometric technique, and analyze how the balance between complexity and specialization (induced by input proliferation) contributes to affect not only the rate of economic growth, but also the joint long-run relation between population growth, economic growth, and markups.…”

“…Our paper shows that when this happens we should observe not only a different level of the growth rate of per capita income but also, and perhaps more importantly, a change in the relation between economic growth, population growth, and markups across countries. 7 Our work is especially related to Bucci (2013Bucci ( , 2015, Bucci and Raurich (2017), Ferrarini and Scaramozzino (2016), and Maggioni et al (2016). Unlike Bucci (2013), it is not an objective of this article to emphasize the growth effects of the so-called returns to specialization (Benassy, 1998) and their role in shaping the link between population growth-economic growth and between markupseconomic growth.…”

“…Following the methodology developed by Lafay (1992), Ferrarini and Scaramozzino (2016) use data on net trade flows to compute a measure for complexity in production, namely the production density index, for 89 countries along the period 1990-2009. For these countries, they separately estimate, through a panel data GLS model, the impact of a larger product density on the level and the growth rate of GDP per capita.…”

“…30 Third, in order to identify a country's underlying complexity in production, we use: (i) the Network Trade Index (NTI) and (ii) two alternative density measures, based on Lafay's index (ω LI ) and Balassa index (ω BI ). All the indexes are provided by Ferrarini and Scaramozzino (2016). 31 Our final dataset consists of a sample that includes 23 OECD countries, with a time span ranging from 1970 to 2007.…”

Economic Complexity: A New Challenge for the Environment

“…A robust and stable relationship between a country's productive structure and economic growth is documented by several studies (i.e., [23][24][25][26][27]). Economic complexity is highly correlated with income and can explain differences in economic performance [28]. It also can predict future economic growth ( [20,[29][30][31]).…”