What You Export Matters

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.

Keywords

Economic growth; Experts; Specialization