Dynamics Of Growth

A fundamental problem in the study of economic growth is the quantitative assessment of the effect that the variety and quality of goods produced by a country has on its overall productivity.

This assessment faces the extra difficulty that the productivity depends also on non-tradable capabilities and on intangible assets. An advance in this field was recently made within the approach to economic complexity. This consisted in the proposal of a measure of diversity in the productions of a country that takes into account their degree of specialisation, as deducible from a comparative analysis at global level. An idea at the basis of this approach is that the productive basket of all countries — if properly analysed — should also supply most of the information encoded in assets like education.… In this work, we push this view further.

Indeed, we consider the data concerning yearly exports of all countries, retrieved from the global trade network, as a complete set of coordinates suitable for a closed description of their evolution in time.… Further, comparisons of the parameters quantifying these aspects in the dynamic description, can be made with a novel measure of economic complexity.

Inspired by the success of relatively simple descriptions used in various fields, such as population and evolutionary dynamics, portfolio strategies or interface growth, we formulate stochastic differential equations for the evolution of the exports of the various countries.

From “Growth Dynamics and Complexity of National Economies in the Global Trade Network”


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