Introduction: The book Atlas of Economic Complexity offers an index that measures how complex an economy is. The index is based on the assumption that what a country produces and exports is a measure of its economic complexity. They argue that specific knowledge is required to produce certain products and that knowledge must be present in that company and must be channeled efficiently (Hidalgo and Hausmann, The Atlas of Economic Complexity 2011). In their book they suggest that their complexity index is an accurate predictor of future GDP per capita. According to the book, an economy must have a certain infrastructure, a level of education, efficient markets and organizations capable of taking advantage of the knowledge accumulated in a country (Hidalgo and Hausmann, The Atlas of Economic Complexity 2011). This article will attempt to determine whether countries with a high index of economic complexity actually had higher per capita GDP growth over a 10-year period (1990 to 2000). Furthermore, this paper will check these results with a coefficient of GDP per capita for the year 1990 (at 2005 prices) to determine whether countries with a low initial per capita income grew faster than those with a higher per capita income (or vice versa) over time. that same 10-year period. This will allow the paper to comment on economic convergence and economic complexity. Literature Review The main purpose of the book The Atlas of Economic Complexity is to convey the idea that “the wealth of nations is driven by productive knowledge. Individuals are limited in the things they can actually know and use in production, so the only way a society can hold more knowledge is by distributing different portions of knowledge to different people” (HG 2011). ...... half of the paper ...... a.mit.edu/media/atlas/pdf/HarvardMIT_AtlasOfEconomicComplexity_Part_I.pdf, Boston: Harvard Kennedy School, 2011. Rodrik, Dani. "The future of economic convergence". Harvard Kennedy School, 2011: http://www.hks.harvard.edu/fs/drodrik/Research%20papers/The%20Future%20of%20Economic%20Convergence%20rev2.pdf.Sachs, Jeffrey and Andrew Warner. "Economic convergence and economic policies". NBER Working Paper Series, 1995: http://www.nber.org/papers/w5039.pdf.The Economist. "Diversity training". The Economist, 4 February 2010: http://www.economist.com/node/15452697?story_id=15452697.Wooldridge, Jeffrey. Introductory econometrics: a modern approach. Southwest Cengage Learning, 2012. World Bank. World development indicators. and http://databank.worldbank.org/data/views/variableSelection/selectvariables.aspx?source=world-development-indicators (accessible 11 25, 2013).
tags