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Tell me what you export today and I will tell you what you will export tomorrow: The Product Space and the Evolution of Country pattern of specialization

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Listed:
  • Antonella Chiappelo
  • Alejandro Danón
  • Guillermina Marto
  • Nicolás Pinto

Abstract

Countries pattern of specialization and its evolution has been economic area of notable interest by academy and policy makers. Moreover, many authors show that economies grow by improving the number and complexity of the products that they produce. Hidalgo, Klinger, Barabasi and Hausmann (2007) constructed the Product Space, a network that maps the connection, between every product worldwide traded, in order to explain the evolution of countries pattern of specialization. However, this matrix estimates a conditional probability of exporting products using a symmetrical approach, that tends to punish more tradable products. In order to improve the predictions of the evolution of country productive structure, we propose an asymmetrical measure, assuming that the conditional probability of exporting a product P given P ́ is exported is not the same as the reverse. Consequently, this new measure predicts nearly 40% of the developed products and more than 70% of the declined products.

Suggested Citation

  • Antonella Chiappelo & Alejandro Danón & Guillermina Marto & Nicolás Pinto, 2019. "Tell me what you export today and I will tell you what you will export tomorrow: The Product Space and the Evolution of Country pattern of specialization," Asociación Argentina de Economía Política: Working Papers 4171, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4171
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    References listed on IDEAS

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    3. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    4. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    5. Arnelyn Abdon & Jesus Felipe, 2011. "The Product Space: What Does It Say About the Opportunities for Growth and Structural Transformation of Sub-Saharan Africa?," Economics Working Paper Archive wp_670, Levy Economics Institute.
    6. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    7. Hausmann, Ricardo & Hidalgo, Cesar, 2014. "The Atlas of Economic Complexity: Mapping Paths to Prosperity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262525429, December.
    8. Hartmann, Dominik & Guevara, Miguel R. & Jara-Figueroa, Cristian & Aristarán, Manuel & Hidalgo, César A., 2017. "Linking Economic Complexity, Institutions, and Income Inequality," World Development, Elsevier, vol. 93(C), pages 75-93.
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    More about this item

    Keywords

    Product Space; Economic Development; Trade;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy
    • F1 - International Economics - - Trade

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