What You Export Matters
24 Pages Posted: 12 Apr 2006
Date Written: December 2005
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: Economics, International Economics, International Development, International Trade and Finance
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