Atlas of Economic Complexity

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Introduction:
The book Atlas of Economic Complexity proposes an index that measures how complex an economy is. The index is based on the hypothesis that what a country produces and exports is a measure of its economic complexity. They argue that in order to produce certain products, specific knowledge is necessary and that knowledge has to be in that society 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 has to have a certain infrastructure, level of education, efficient markets and organizations that can take advantage of the accumulated knowledge of a country (Hidalgo and Hausmann, The Atlas of Economic Complexity 2011). This paper will attempt to determine if in fact countries with a high economic complexity index had a greater GDP per capita growth over a 10 year period (from 1990 to2000). Additionally, this paper will control those results with a coefficient of GDP per capita for the year 1990 (at 2005 prices) to determine if countries with low initial income per capita grew faster than those with a higher income per capita (or vice versa) over that same 10 year period. This will allow the paper to comment on economic convergence as well as 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 effectively know and use in production so the only way a society can hold more knowledge is by distributing different chunks of knowledge to different people” (H.G. 2011). ...

... middle of 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, February 4, 2010: http://www.economist.com/node/15452697?story_id=15452697.
Wooldridge, Jeffrey. Introductory Econometrics: A modern approach. South-Western Cengage learning, 2012.
World Bank . World Development Indicators. n.d. http://databank.worldbank.org/data/views/variableSelection/selectvariables.aspx?source=world-development-indicators (accessed 11 25, 2013).

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