Working Paper: CEPR ID: DP5444
Authors: Ricardo Hausmann; Jason Hwang; Dani Rodrik
Abstract: When local cost discovery generates knowledge spillovers, specialization patterns become partly indeterminate and the mix of goods that a country produces may have important implications for economic growth. We demonstrate this proposition formally and adduce some empirical support for it. We construct an index of the 'income level of a country's exports,' document its properties, and show that it predicts subsequent economic growth.
Keywords: growth; productivity; specialization
JEL Codes: F1; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| export productivity measure (exp_y) (E23) | economic growth (O49) |
| mix of goods a country exports (F10) | economic growth (O49) |
| specialization in higher productivity goods (D29) | economic growth (O49) |
| export basket (exp_y) (F10) | economic growth (O49) |