Empirical Confirmation of Creative Destruction from World Trade Data
AbstractWe show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite--disappearances followed by periods of appearances--is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e. creative destruction. We find a tendency that more complex products drive out less complex ones, i.e. progress has a direction. Finally we show that the growth trajectory of a country's product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Harvard University, John F. Kennedy School of Government in its series Working Paper Series with number rwp12-022.
Date of creation: May 2012
Date of revision:
Contact details of provider:
Postal: 79 JFK Street, Cambridge, MA 02138
Web page: http://www.ksg.harvard.edu/research/working_papers/index.htm
More information through EDIRC
Other versions of this item:
- Peter Klimek & Ricardo Hausmann & Stefan Thurner, 2011. "Empirical confirmation of creative destruction from world trade data," Papers 1112.2984, arXiv.org.
- NEP-ALL-2012-06-13 (All new papers)
- NEP-INT-2012-06-13 (International Trade)
- NEP-TID-2012-06-13 (Technology & Industrial Dynamics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philippe Aghion & Johannes Fedderke & Peter Howitt & Chandana Kularatne & Nicola Viegi, 2008.
"Testing Creative Destruction in an Opening Economy: the Case of the South African Manufacturing Industries,"
93, Economic Research Southern Africa.
- Philippe Aghion & Johannes Fedderke & Peter Howitt & Chandana Kularatne & Nicola Viegi, 2008. "Testing Creative Destruction in an Opening Economy : the Case of the South African Manufacturing Inudstries," Documents de Travail de l'OFCE 2008-23, Observatoire Francais des Conjonctures Economiques (OFCE).
- Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
- Bartelsman, Eric & Haltiwanger, John & Scarpetta1, Stefano, 2004.
"Microeconomic evidence of creative destruction in industrial and developing countries,"
Policy Research Working Paper Series
3464, The World Bank.
- Bartelsman, Eric & Haltiwanger, John C. & Scarpetta, Stefano, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," IZA Discussion Papers 1374, Institute for the Study of Labor (IZA).
- Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
- Ricardo Hausmann & César Hidalgo, 2011.
"The network structure of economic output,"
Journal of Economic Growth,
Springer, vol. 16(4), pages 309-342, December.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.