Production ´Roundaboutness´and Economic Growth: Some Empirical Evidence

The explanalion of ihe worldwide disparities in income and economic growth has become one of ihe central issues in ihe recent wave of endogenous growth Uterature. This paper is also focused on thal topic Our hypothesis is thai a parliaJ explanation of these disparities lies in the degree of maturity of the net of interindustiy Unkages is a significant element in ihe growth process. lt has been known for a long time that advanced industrialized countries enjoy a higher degree of technological interdependence across sectors and industries “Displayed in the input*output table, the pattem of transactions between industries and other major sectors of the system shows that the more developed ihe economy, the more its interna] structure resembles ihat of other developed economies. (...). Recent advanees in input-output analysis and in the bookkeeping of underdeveloped countries have made it possible to apply the technique to a number of these economies Their input*output tables show that in addition to bemg smaller and poorer they have inlemaJ structures that are different, because they are mcomplete, compared with ihe developed economies. From such comparative studies a fundamenta] analyticaJ approach to ihe structure of economic development is now emergmg” (W. Leontief, 1986, p 163). But the links between economic structure and growth had not been properly idenlined until recent developments in economic analysis made it possible for growth economists to use ihe concepts of extemalities and speciali2ation through expansión of varieties in mathematically iractable economic models.