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On the predictability of growth

Author

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  • Cristelli,Matthieu Claudio Ascagne
  • Tacchella,Andrea
  • Cader,Masud Z.
  • Roster,Kirstin Ingrid
  • Pietronero,Luciano

Abstract

A country's productive structure and competitiveness are harbingers of growth. Growth is a dynamic process based on capabilities that are difficult to define and measure across countries. This paper uses a global measure of fitness (or complexity-weighted diversity of production) as a method to explore a country's relative growth potential. The analysis finds that there are two types of growth, predictable or laminar, and unpredictable. This classification is used to create a selection mechanism (the Selective Predictability Scheme), defining future growth trajectories for similar countries, and compares projected long-term, five-year forecasts with traditional methods used by the International Monetary Fund. The analysis finds that production structure is a good long-term predictor of growth, with prediction performance falling off for countries not yet in the laminar classification.

Suggested Citation

  • Cristelli,Matthieu Claudio Ascagne & Tacchella,Andrea & Cader,Masud Z. & Roster,Kirstin Ingrid & Pietronero,Luciano, 2017. "On the predictability of growth," Policy Research Working Paper Series 8117, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8117
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    Cited by:

    1. Francesco de Cunzo & Alberto Petri & Andrea Zaccaria & Angelica Sbardella, 2022. "The trickle down from environmental innovation to productive complexity," Papers 2206.07537, arXiv.org.
    2. Mealy, Penny & Teytelboym, Alexander, 2022. "Economic complexity and the green economy," Research Policy, Elsevier, vol. 51(8).
    3. Lastunen, Jesse & Richiardi, Matteo, 2023. "Forecasting recovery from COVID-19 using financial data: An application to Vietnam," World Development Perspectives, Elsevier, vol. 30(C).
    4. Song, Pengcheng & Wang, Pang Paul & Zhang, Baozhen & Zhang, Xuan & Zong, Xiangyu, 2021. "Complexity economic indexes for the energy market: Evidence during extreme global changes," Energy Economics, Elsevier, vol. 96(C).
    5. Angelica Sbardella & Andrea Zaccaria & Luciano Pietronero & Pasquale Scaramozzino, 2021. "Behind the Italian Regional Divide: An Economic Fitness and Complexity Perspective," LEM Papers Series 2021/30, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    6. Domini, Giacomo, 2022. "Patterns of specialization and economic complexity through the lens of universal exhibitions, 1855-1900," Explorations in Economic History, Elsevier, vol. 83(C).
    7. Paitoon Kraipornsak, 2020. "The Different Structure of Sources of Growth between the Developed and the Developing Asia and the Pacific Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 10(1), pages 22-34, January.
    8. Ye, Yucheng & Xu, Shuqi & Mariani, Manuel Sebastian & Lü, Linyuan, 2022. "Forecasting countries' gross domestic product from patent data," Chaos, Solitons & Fractals, Elsevier, vol. 160(C).
    9. Angelini, Orazio & Gabrielli, Andrea & Tacchella, Andrea & Zaccaria, Andrea & Pietronero, Luciano & Di Matteo, T., 2024. "Forecasting the countries’ gross domestic product growth: The case of Technological Fitness," Chaos, Solitons & Fractals, Elsevier, vol. 184(C).

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