Abstract
When local cost discovery generates knowledge spillovers, specialization patterns become partly indeterminate and the mix of goods that a country produces may have important implications for economic growth. We demonstrate this proposition formally and adduce some empirical support for it. We construct an index of the “income level of a country’s exports,” document its properties, and show that it predicts subsequent economic growth.
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Hausmann, R., Hwang, J. & Rodrik, D. What you export matters. J Econ Growth 12, 1–25 (2007). https://doi.org/10.1007/s10887-006-9009-4
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DOI: https://doi.org/10.1007/s10887-006-9009-4