Template-Type: ReDIF-Paper 1.0
Author-Name: Andres Gomez-Lievano
Author-Email: Andres_Gomez@hks.harvard.edu
Author-Workplace-Name: Center for International Development at Harvard University
Author-Name: Frank Neffke
Author-Email: frank_neffke@hks.harvard.edu
Author-Workplace-Name: Center for International Development at Harvard University
Author-Person: pne139
Author-Name: Yang Li
Author-Name: James McNerney
Author-Email: james_mcnerney@hks.harvard.edu
Author-Workplace-Name: Center for International Development at Harvard University
Title: Bridging the short-term and long-term dynamics of economic structural change
Abstract: In the short-term, economies shift preferentially into new activities that are related to ones they currently do. Such a tendency should have implications for the nature of an economy’s long-term development as well. We explore these implications using a dynamical network model of an economy’s movement into new activities. First, we theoretically derive a pair of coordinates that summarize long-term structural change. One coordinate captures overall ability across activities, the other captures an economy’s composition. Second, we show empirically how these two measures intuitively summarize a variety of facts of long-term economic development. Third, we observe that our measures resemble complexity metrics, though our route to these metrics differs significantly from previous ones. In total, our framework represents a dynamical approach that bridges short-and long-term descriptions of structural change, and suggests how different branches of economic complexity analysis could potentially fit together in one framework.
Creation-Date: 2021-10
Keywords: economic complexity, structural change
Number: 180
Handle: RePEc:glh:wpfacu:180
File-Url: https://growthlab.cid.harvard.edu/files/growthlab/files/2021-10-cid-wp-133-bridging-dynamics-of-economic-structural-change.pdf
File-Format: application/pdf