Working Paper: NBER ID: w11905
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: economic growth; export composition; productivity; cost discovery
JEL Codes: F1; O4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| mix of goods exported (F10) | economic growth (O49) |
| local cost discovery (D49) | higher productivity goods (O49) |
| higher productivity goods (O49) | economic performance (P17) |
| productivity level of exports (exp_y) (O47) | economic growth (O49) |
| returns to investment in cost discovery (G31) | economic growth (O49) |