DP5444 What You Export Matters

Author(s): Ricardo Hausmann, Jason Hwang, Dani Rodrik
Publication Date: January 2006
Keyword(s): growth, productivity, specialization
JEL(s): F1, O4
Programme Areas: Public Economics, International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=5444

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.