Bridging the short-term and long-term dynamics of economic structural change

Andres Gomez-Lievano (), Frank Neffke, Yang Li and James McNerney ()
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Andres Gomez-Lievano: Center for International Development at Harvard University
James McNerney: Center for International Development at Harvard University

No 180, Growth Lab Working Papers from Harvard's Growth Lab

Abstract: In the short-term, economies shift preferentially into new activities that are related to ones they currently do. Such a tendency should have implications for the nature of an economy’s long-term development as well. We explore these implications using a dynamical network model of an economy’s movement into new activities. First, we theoretically derive a pair of coordinates that summarize long-term structural change. One coordinate captures overall ability across activities, the other captures an economy’s composition. Second, we show empirically how these two measures intuitively summarize a variety of facts of long-term economic development. Third, we observe that our measures resemble complexity metrics, though our route to these metrics differs significantly from previous ones. In total, our framework represents a dynamical approach that bridges short-and long-term descriptions of structural change, and suggests how different branches of economic complexity analysis could potentially fit together in one framework.

Keywords: economic complexity; structural change (search for similar items in EconPapers)
Date: 2021-10
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https://growthlab.cid.harvard.edu/files/growthlab/ ... tructural-change.pdf (application/pdf)

Related works:
Working Paper: Bridging the short-term and long-term dynamics of economic structural change (2023)
Working Paper: Bridging the short-term and long-term dynamics of economic structural change (2023)
Working Paper: Bridging the short-term and long-term dynamics of economic structural change (2021)
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