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Can the Method of Re?ections help predict future growth?

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  • Guzmán Ourens

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

Building upon an original and fruitful research line, a recent paper by Hidalgo and Hausmann (2009) proposed new indicators of product sophistication and economic complexity build solely upon international trade data, in their Method of Re?ections. The authors and their indicators for economic complexity to be highly related to countries’ income and show evidence supporting their use as predictors of future growth in the short and long run. This would make these indicators very appealing to empirical economists and policy-makers. This work tests these properties for the indicators constructing them upon a more disaggregated database and changing some other important methodological decisions. Results show that MR indicators are strongly related to income and they can be considered good predictors of long-term growth under certain conditions. Evidence supporting MR indicators as good predictors of short-term growth could not be found.

Suggested Citation

  • Guzmán Ourens, 2012. "Can the Method of Re?ections help predict future growth?," Documentos de Trabajo (working papers) 1712, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:1712
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    File URL: https://hdl.handle.net/20.500.12008/2241
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    1. Rui Xue & KeYu Li & FeiFei Wang & Claude Baron, 2024. "Research Progress and Hot-spot Analysis of The Economic Complexity Research Based on CiteSpace," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 14(1), pages 1-10.
    2. Sadeghi, Pegah & Shahrestani, Hamid & Kiani, Kambiz Hojabr & Torabi, Taghi, 2020. "Economic complexity, human capital, and FDI attraction: A cross country analysis," International Economics, Elsevier, vol. 164(C), pages 168-182.
    3. Christian Daude & Arne Nagengast & Jose Ramon Perea, 2016. "Productive capabilities: An empirical analysis of their drivers," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 25(4), pages 504-535, June.
    4. Ivanova, Inga & Strand, Øivind & Kushnir, Duncan & Leydesdorff, Loet, 2017. "Economic and technological complexity: A model study of indicators of knowledge-based innovation systems," Technological Forecasting and Social Change, Elsevier, vol. 120(C), pages 77-89.
    5. Gómez Zaldívar Manuel de Jesús & Chávez Juan Carlos & Mosqueda Chávez Marco Tulio, 2016. "Economic Complexity and Regional Growth Performance, Evidence From the Mexican Economy," Working Papers 2016-17, Banco de México.
    6. Inga Ivanova & Nataliya Smorodinskaya & Loet Leydesdorff, 2020. "On measuring complexity in a post-industrial economy: the ecosystem’s approach," Quality & Quantity: International Journal of Methodology, Springer, vol. 54(1), pages 197-212, February.
    7. Inga Ivanova, 2022. "The relation between complexity and synergy in the case of China: different ways of predicting GDP growth in a complex and adaptive system," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(1), pages 195-215, February.
    8. Kito, Tomomi & New, Steve & Reed-Tsochas, Felix, 2018. "Disentangling the complexity of supply relationship formations: Firm product diversification and product ubiquity in the Japanese car industry," International Journal of Production Economics, Elsevier, vol. 206(C), pages 159-168.
    9. Abdullah Almaatouq, 2016. "Complex Systems and a Computational Social Science Perspective on the Labor Market," Papers 1606.08562, arXiv.org.
    10. Can Li & Qi He & Han Ji, 2023. "Can Global Value Chain Upgrading Promote Regional Economic Growth? Empirical Evidence and Mechanism Analysis Based on City-Level Panel Data in China," Sustainability, MDPI, vol. 15(15), pages 1-22, July.
    11. Cesar A. Hidalgo, 2022. "Knowledge is non-fungible," Papers in Evolutionary Economic Geography (PEEG) 2229, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2022.
    12. Müller, Viktor Paul & Eichhammer, Wolfgang, 2023. "Economic complexity of green hydrogen production technologies - a trade data-based analysis of country-specific industrial preconditions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 182(C).
    13. Travis J. Lybbert & Mingzhi Xu, 2022. "Innovation‐adjusted economic complexity and growth: Do patent flows reveal enhanced economic capabilities?," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 442-483, February.
    14. Inga Ivanova & Oivind Strand & Duncan Kushnir & Loet Leydesdorff, 2015. "The Efficiency of Triple-Helix Relations in Innovation Systems: Measuring the Connection between a Country’S Net Income and its Knowledge Base," HSE Working papers WP BRP 55/STI/2015, National Research University Higher School of Economics.

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    More about this item

    Keywords

    Method of reflections; growth; specialization; economic complexity;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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