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The Theory of Economic Complexity: A Study of Armenia

Author

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  • Ivan V. Nikonov

    (Financial Research Institute, Moscow 127006, Russia)

  • Anton I. Votinov

    (Financial Research Institute, Moscow 127006, Russia)

Abstract

The article provides the analysis of the future prospects for the economic development in the Republic of Armenia. The authors choose the theory of economic complexity, developed by Cesar A. Hidalgo and Ricardo Hausmann, as the baseline for the research. Based on the theoretical premises, the economic complexity index (ECI) for Armenia was calculated and then compared to the ECI of other countries. This study further establishes how the development of economic sectors influences the complexity of the product space in the Armenian economy. The results reveal that in terms of economic complexity Armenia is ahead of some neighboring countries and some EAEU members. The original methodology of opportunity value index estimation was modified for research purposes. This methodology was used to assess the most promising areas of development of the Armenian economy. The authors suppose that manufacturing can contribute significantly to the long-term economic growth in the Republic of Armenia; however, in order to create the necessary conditions for the growth enormous efforts are required for this sector development.

Suggested Citation

  • Ivan V. Nikonov & Anton I. Votinov, 2018. "The Theory of Economic Complexity: A Study of Armenia," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 121-131, August.
    • Handle: RePEc:fru:finjrn:180411:p:121-131
    DOI: 10.31107/2075-1990-2018-4-121-131
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    References listed on IDEAS

    as
    1. Samvel S. Lazaryan & Mariya A. Chernotalova, 2017. "Global Risk of Rising Inequality," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 34-46, August.
    2. Hausmann, Ricardo & Klinger, Bailey, 2006. "Structural Transformation and Patterns of Comparative Advantage in the Product Space," Working Paper Series rwp06-041, Harvard University, John F. Kennedy School of Government.
    3. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    4. Lyubimov, I. & Gvozdeva, M. & Kazakova, M. & Nesterova, K., 2017. "Economic Complexity of Russian Regions and their Potential to Diversify," Journal of the New Economic Association, New Economic Association, vol. 34(2), pages 94-122.
    5. Victor Ya. Pishchik & Petr V. Alekseev, 2017. "Actual Formation Issues of the Single Financial Market of the EAEU Member States," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 102-111, October.
    6. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    7. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72(6), pages 584-584.
    8. Jesus Felipe (ed.), 2015. "Development and Modern Industrial Policy in Practice," Books, Edward Elgar Publishing, number 16411.
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    Keywords

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    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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