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Growth Diagnostic: Peru

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  • Hausmann, Ricardo
  • Klinger, Bailey

Abstract

This paper presents a growth diagnostic exercise for Peru. It notes that although Peru has recently enjoyed high rates of economic growth, this growth is actually a recovery from a significant and sustained growth collapse that began in the 1970s, caused by a decline in export earnings due to the fall in international prices and an inadequate investment regime in export activities. However, the transformation of the export sector has been surprisingly small: the same activities that declined- mining and energy- are the ones that are leading the current recovery in exports. The authors argue that the lack of structural transformation is associated with Peru's position in a poorly connected part of the product space. The key policy message is that the public sector must act to encourage the development of new export activities that better utilize the human resources of the country.

Suggested Citation

  • Hausmann, Ricardo & Klinger, Bailey, 2008. "Growth Diagnostic: Peru," IDB Publications (Working Papers) 3702, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3702
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    References listed on IDEAS

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    1. Guillermo A. Calvo & Alejandro Izquierdo & Ernesto Talvi, 2006. "Sudden Stops and Phoenix Miracles in Emerging Markets," American Economic Review, American Economic Association, vol. 96(2), pages 405-410, May.
    2. James J. Heckman & Carmen Pagés, 2004. "Law and Employment: Lessons from Latin America and the Caribbean," NBER Books, National Bureau of Economic Research, Inc, number heck04-1, June.
    3. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    4. Jaffe, Adam B, 1986. "Technological Opportunity and Spillovers of R&D: Evidence from Firms' Patents, Profits, and Market Value," American Economic Review, American Economic Association, vol. 76(5), pages 984-1001, December.
    5. Ricardo Hausmann & Bailey Klinger, 2007. "The Structure of the Product Space and the Evolution of Comparative Advantage," Growth Lab Working Papers 10, Harvard's Growth Lab.
    6. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12426.
    7. K. J. Arrow, 1971. "The Economic Implications of Learning by Doing," Palgrave Macmillan Books, in: F. H. Hahn (ed.), Readings in the Theory of Growth, chapter 11, pages 131-149, Palgrave Macmillan.
    8. Ricardo Hausmann & Rodrigo Wagner & Francisco Rodriguez, 2006. "Growth Collapses," CID Working Papers 136, Center for International Development at Harvard University.
    9. 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.
    10. World Bank, 2005. "World Development Indicators 2005," World Bank Publications - Books, The World Bank Group, number 12425.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    growth diagnostic; economic development and growth; financial crisis; Peru;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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