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Economic complexity: Conceptual grounding of a new metrics for global competitiveness

Author

Listed:
  • Tacchella, A.
  • Cristelli, M.
  • Caldarelli, G.
  • Gabrielli, A.
  • Pietronero, L.

Abstract

The availability of data corresponding to the products exported by all countries provides an excellent dataset to test economic ideas and extracts new information about the process of economic development. The matrix of countries and exported products shows a marked triangular structure instead of the block-diagonal structure expected from Ricardian arguments of specialization. This observation points to the fact that diversification is instead the dominant effect in the globalized market. We discuss how to define a suitable non-monetary metrics for the value of diversification and the effective complexity of products. We discuss in detail the previous proposed approaches to assess this challenge and their limitations. We introduce a new approach to the definition of these metrics which seems to overcome the previous problems and we test it in a series of model systems.

Suggested Citation

  • Tacchella, A. & Cristelli, M. & Caldarelli, G. & Gabrielli, A. & Pietronero, L., 2013. "Economic complexity: Conceptual grounding of a new metrics for global competitiveness," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1683-1691.
    • Handle: RePEc:eee:dyncon:v:37:y:2013:i:8:p:1683-1691
    DOI: 10.1016/j.jedc.2013.04.006
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    References listed on IDEAS

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    1. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    2. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    3. Ricardo, David, 1821. "On the Principles of Political Economy and Taxation," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, edition 3, number ricardo1821.
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    Citations

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    Cited by:

    1. Abdullah Almaatouq, 2016. "Complex Systems and a Computational Social Science Perspective on the Labor Market," Papers 1606.08562, arXiv.org.
    2. Giovanni Dosi & Andrea Roventini & Emanuele Russo, 2018. "Endogenous growth and global divergence in a multi-country agent-based model," Documents de Travail de l'OFCE 2018-02, Observatoire Francais des Conjonctures Economiques (OFCE).
    3. Daniela MAGGIONI & Alessia LO TURCO & Mauro GALLEGATI, 2014. "Does export complexity matter for firms' output volatility?," Working Papers 407, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    4. Giovanni Dosi & Andrea Roventini & Emanuele Russo, 2017. "Endogenous growth and global divergence in a multi-country agent-based model," LEM Papers Series 2017/32, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    5. Ivanova, Inga & Strand, Øivind & Kushnir, Duncan & Leydesdorff, Loet, 2017. "Economic and technological complexity: A model study of indicators of knowledge-based innovation systems," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 77-89.
    6. Sweet, Cassandra Mehlig & Eterovic Maggio, Dalibor Sacha, 2015. "Do Stronger Intellectual Property Rights Increase Innovation?," World Development, Elsevier, vol. 66(C), pages 665-677.
    7. Angelica Sbardella & Emanuele Pugliese & Luciano Pietronero, 2016. "Economic Development and Inequality: a complex system analysis," Papers 1605.03133, arXiv.org.
    8. Cyrielle Gaglio, 2015. "Measuring Country Competitiveness: A Survey of Exporting-based Indexes," GREDEG Working Papers 2015-42, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    9. Fabio Saracco & Riccardo Di Clemente & Andrea Gabrielli & Luciano Pietronero, 2015. "From innovation to diversification: a simple competitive model," Papers 1508.03571, arXiv.org, revised Nov 2015.
    10. Robert Kitt, 2016. "Complex Endogenous Growth Model and Its Applications," Research in Economics and Business: Central and Eastern Europe, Tallinn School of Economics and Business Administration, Tallinn University of Technology, vol. 8(1).
    11. Maggioni, Daniela & Lo Turco, Alessia & Gallegati, Mauro, 2016. "Does product complexity matter for firms' output volatility?," Journal of Development Economics, Elsevier, vol. 121(C), pages 94-109.
    12. Gómez Zaldívar Manuel de Jesús & Chávez Juan Carlos & Mosqueda Chávez Marco Tulio, 2016. "Economic Complexity and Regional Growth Performance, Evidence From the Mexican Economy," Working Papers 2016-17, Banco de México.
    13. Cristelli, Matthieu & Tacchella, Andrea & Zaccaria, Andrea & Pietronero, Luciano, 2014. "Growth scenarios for sub-Saharan countries in the framework of economic complexity," MPRA Paper 71594, University Library of Munich, Germany.
    14. Andrea Zaccaria & Matthieu Cristelli & Roland Kupers & Andrea Tacchella & Luciano Pietronero, 2016. "A case study for a new metrics for economic complexity: The Netherlands," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 11(1), pages 151-169, April.

    More about this item

    Keywords

    Economic complexity; Metrics; Country competitiveness; Product complexity; Export; Toy model;

    JEL classification:

    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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