Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109465
Authors: 
Ferrarini, Benno
Scaramozzino, Pasquale
Year of Publication: 
2013
Series/Report no.: 
ADB Economics Working Paper Series 344
Abstract: 
This paper analyzes the role of complexity in production on the level of output and on its rate of growth. We develop an endogenous growth model with human capital accumulation, where increased complexity could exert either a positive or a negative effect on the level of output but always a positive effect on its rate of growth. Our empirical measure of complexity is derived from net trade flows, and is based on the product space description of production sectors in the global economy. The evidence from a broad cross-section of countries is consistent with the main theoretical predictions of the model, and supports the view that production complexity is important in order to account for differences in economic performance. An indicator of the intensity of vertical trade among countries is also shown to be relevant to explain output performance.
Subjects: 
international trade flows
vertical trade
economic growth
complexity
JEL: 
F43
O11
O14
O15
O33
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/3.0/igo
Document Type: 
Working Paper

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