@article {1814976,
	title = {A journey through time: the story behind {\textquoteleft}eight decades of changes in occupational tasks, computerization and the gender pay gap{\textquoteright}},
	journal = {Industry and Innovation},
	volume = {31},
	number = {4},
	year = {2024},
	abstract = {
	In this interview article, we embark on a fascinating journey through time alongside the winners of the 2023 DRUID Best Paper Award. DRUID, an annual research conference renowned as the hub of cutting-edge research on innovation and the dynamics of structural, institutional, and geographic change, bestows this award on the most innovative and exceptional conference submission. As longstanding allies of DRUID, Industry and Innovation offers an exclusive peek behind the curtains, unveiling the untold stories that underlie award-winning research.



	In 2023, this coveted DRUID prize was awarded to a paper by Ljubica Nedelkoska, Shreyas Gadgin Matha, James McNerney, Andre Assumpcao, Dario Diodato, and Frank Neffke. Their work stands out through an impressive data collection effort and the exploration of a compelling and urgent research question {\textendash} how technological change has impacted the gender pay gap. Throughout this interview, the author team takes us down memory lane, retelling the story behind their research project. On this journey through time, we trace the genesis of the authors{\textquoteright} innovative ideas and the intricate pathways they navigated in their quest to understand the past as a means of unravelling the future of work and its implications for gender inequality in the labour market. This journey not only takes us back in time but also points to potential avenues for future research and open questions that lie ahead.

},
	url = {https://growthlab.hks.harvard.edu/publications/eight-decades-changes-occupational-tasks-computerization-and-gender-pay-gap}
}
@article {1803266,
	title = {Women Seeking Jobs with Limited Information: Evidence from Iraq},
	year = {2024},
	abstract = {
	Do women apply more for jobs when they know the hiring probability of female job seekers directly from employers? I implemented a randomized control trial and a double-incentivized resume rating to elicit the preferences of employers and job seekers for candidates and vacancies in Iraq. The treatment reveals the job offer rate for women, calculated using the employers{\textquoteright} selection of women divided by the total number of female candidates. After revealing the treatment, the women applied for jobs by three more percentage points than the men in the control group. This paper highlights the value of revealing employers{\textquoteright} preferences to improve the match between female candidates and employers when women underestimate the chances of finding a job.\&nbsp;

},
	author = {Diego A. Martin}
}
@article {1801161,
	title = {On the Design of Effective Sanctions: The Case of Bans on Exports to Russia},
	journal = {Economic Policy },
	volume = {39},
	number = {117},
	year = {2024},
	pages = {109-153},
	abstract = {We build on Baqaee and Farhi (2019, 2021) and derive a theoretically-grounded criterion that allows targeting bans on exports to a sanctioned country at the level of \~{}5000 6-digit HS products. The criterion implies that the costs to the sanctioned country are highly convex in the market share of the sanctioning parties. Hence, there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia reveals that sanctions imposed by the EU and the US in response to Russia{\textquoteright}s invasion of Ukraine are not systematically related to our arguments once we condition on Russia{\textquoteright}s total imports of a product from participating countries. We discuss drivers of these differences, and then provide a quantitative evaluation of the export bans to show that (i) they are very effective with the welfare loss typically \~{}100 times larger for Russia than for the sanctioners; (ii) improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 80\% with little to no extra cost to the sanctioners; and (iii) there is scope for increasing the cost to Russia further by expanding the set of sanctioned products.},
	url = {https://academic.oup.com/economicpolicy/advance-article-abstract/doi/10.1093/epolic/eiad043/7584843},
	author = {Hausmann, Ricardo and Schetter, Ulrich and Muhammed A. Yildirim}
}
@article {1800256,
	title = {The Missing Economic Diversity of the Colombian Amazon},
	year = {2023},
	abstract = {
	Alarming rates of forest loss in the Colombian Amazon have created a perceived trade-off that the only means of achieving economic prosperity is by sacrificing the forest. This study finds little evidence of this trade-off; rather, we find that economic development and forest protection are not an either-or choice. Forest clearing is driven by extensive cattle-ranching as a means to secure land titles. In essence, the loss of some of the world{\textquoteright}s richest biodiversity is the result of some of the least economically complex activities that fail to achieve economic prosperity in the region. If anything, the acceleration in deforestation has accompanied a period of economic stagnation.



	The existing economic model in the Amazon {\textendash} centered on agrarian colonization and mineral extraction {\textendash} has not generated prosperity for the people, all while failing the forest. The exceptional diversity of the Amazon{\textquoteright}s biome is not reflected in the region{\textquoteright}s economy. The Amazonian economy is best characterized by its low diversity and low complexity. A significant proportion of employment is linked to public administration {\textendash} more than in other departments of the country. Very little of the production in the departments is destined to be consumed outside the departments ("exported").



	This study seeks to define an alternative economic model for the Colombian Amazon from the perspective of economic complexity with environmental sustainability. Economic complexity research finds that the productive potential of places depends not only on the soil or natural resources, but on the productive capabilities{\textemdash}or knowhow{\textemdash}held by its people. This research finds that the Colombian Amazon will not become rich by adding value to its raw materials or by specializing in one economic activity. Rather, economic development is best described as a process of expanding the set of capabilities present to be able to produce a more diverse set of goods, of increasingly greater complexity. This model starts from the base of understanding the existing productive capabilities in Caquet{\'a}, Guaviare, and Putumayo, to identify high-potential economic sectors that build off those capabilities to achieve new, sustainable pathways to shared prosperity.



	Achieving shared prosperity in the Amazon depends on the connectivity and opportunity in its urban areas. The primary drivers of greater economic complexity {\textendash} and prosperity {\textendash} are the cities in the Amazon. Even in the remote areas of the Amazon, the majority of people in Caquet{\'a}, Guaviare, and Putumayo live in urban areas. The low prosperity in the Colombian Amazon is driven by the lack of prosperous cities. The report finds that Amazonian cities are affected by the lack of connectivity to major Colombian cities that limit their ability to {\textquoteleft}export{\textquoteright} things outside the department to then expand the capacity to {\textquoteleft}import{\textquoteright} the things that are not produced locally as a means to improve well-being.

},
	author = {Sebastian Bustos and Tim Cheston and Nidhi Rao}
}
@article {1783686,
	title = {Pandemic-era Inflation Drivers and Global Spillovers},
	year = {2023},
	abstract = {We estimate a multi-country multi-sector New Keynesian model to quantify the drivers of domestic inflation during 2020{\textendash}2023 in several countries, including the United States. The model matches observed inflation together with sector-level prices and wages. We further measure the relative importance of different types of shocks on inflation across countries over time. The key mechanism, the international transmission of demand, supply and energy shocks through global linkages helps us to match the behavior of the USD/Euro exchange rate. The quantification exercise yields four key findings. First, negative supply shocks to factors of production, labor and intermediate inputs, initially sparked inflation in 2020{\textendash}2021. Global supply chains and complementarities in production played an amplification role in this initial phase. Second, positive aggregate demand shocks, due to stimulative policies, widened demand-supply imbalances, amplifying inflation further during 2021{\textendash}2022. Third, the reallocation of consumption between goods and service sectors, a relative sector-level demand shock, played a role in transmitting these imbalances across countries through the global trade and production network. Fourth, global energy shocks have differential impacts on the US relative to other countries{\textquoteright} inflation rates. Further, complementarities between energy and other inputs to production play a particularly important role in the quantitative impact of these shocks on inflation.},
	author = {Julian di Giovanni and Ṣebnem Kalemli-{\"O}zcan and Alvaro Silva and Muhammed A. Yildirim}
}
@article {1781376,
	title = {Towards a Sustainable Recovery for Lebanon{\textquoteright}s Economy},
	year = {2023},
	abstract = {
	Lebanon{\textquoteright}s current economic crisis ranks among the worst in recent history. GDP has collapsed by 38\% in real terms. The Lebanese lira, which was fixed to the dollar in 1997, has lost more than 98\% of its value on the parallel market. The government has defaulted on its debt, and depositors are unable to access their funds held at commercial banks. Consolidated public sector debt, including both government debt and commercial banks{\textquoteright} claims on the Banque du Liban (BdL), represents more than seven times the current GDP. Public services delivery has crumbled. In short, the country is undergoing a debt crisis, a banking crisis, a currency crisis, and a growth collapse. Four years into the crisis, a resolution remains elusive, and each passing day increases the economic and social burdens faced by the population.\&nbsp;



	Given the increasing cost of delaying a resolution, we propose a strategy for Lebanon{\textquoteright}s economic recovery that addresses all the dimensions of the crisis while recognizing the need to rapidly kick-start the economic recovery.\&nbsp;



	Learn more about the Growth Lab{\textquoteright}s research project on Lebanon.\&nbsp;



	Executive Summary: English |\&nbsp;Arabic | French

},
	author = {Hausmann, Ricardo and Ugo Panizza and Reinhart, Carmen and Douglas Barrios and Clement Brenot and Jes{\'u}s Daboin Pacheco and Clemens Graf von Luckner and Frank Muci and Lucila Venturi}
}
@article {1777836,
	title = {Growth Through Inclusion in South Africa},
	year = {2023},
	abstract = {
	It is painfully clear that South Africa is performing poorly, exacerbating problems such as inequality and exclusion. The economy{\textquoteright}s ability to create jobs is slowing, worsening South Africa{\textquoteright}s extreme levels of unemployment and inequality. South Africans are deeply disappointed with social progress and dislike the direction where the country seems to be heading. Despite its enviable productive capabilities, the national economy is losing international competitiveness. As the economy staggers, South Africa faces deteriorating social indicators and declining levels of public satisfaction with the status quo. After 15 years, attempts to stimulate the economy through fiscal policy and to address exclusion through social grants have failed to achieve their goals. Instead, they have sacrificed the country{\textquoteright}s investment grade, increasing the cost of capital to the whole economy, with little social progress to show for it. The underlying capabilities to achieve sustained growth by leveraging the full capability of its people, companies, assets, and knowhow remain underutilized. Three decades after the end of apartheid, the economy is defined by stagnation and exclusion, and current strategies are not achieving inclusion and empowerment in practice.



	This report asks the question of why. Why is the economy growing far slower than any reasonable comparator countries? Why is exclusion so extraordinarily high, even after decades of various policies that have aimed to support socio-economic transformation? What would it take for South Africa to include more of its people, capabilities, assets, and ideas in the functioning of the economy, and why aren{\textquoteright}t such actions being undertaken already? The Growth Lab has completed a deep diagnostic of potential causes of South Africa{\textquoteright}s prolonged underperformance over a two-year research project. Building on the findings of nine papers and widespread collaboration with government, academics, business and NGOs, this report documents the project{\textquoteright}s central findings. Bluntly speaking, the report finds that South Africa is not accomplishing its goals of inclusion, empowerment and transformation, and new strategies and instruments will be needed to do so. We found two broad classes of problems that undermine inclusive growth in the Rainbow Nation: collapsing state capacity and spatial exclusion.



	Learn more about the Growth Lab{\textquoteright}s research engagement,\&nbsp;Growth Through Inclusion in South Africa.

},
	author = {Hausmann, Ricardo and Tim O{\textquoteright}Brien and Andr{\'e}s Fortunato and Alexia Lochmann and Kishan Shah and Lucila Venturi and Sheyla Enciso-Valdivia and Ekaterina Vashkinskaya and Ketan Ahuja and Klinger, Bailey and Sturzenegger, Federico and Marcelo Tokman}
}
@article {1770321,
	title = {COVID-19 and emerging markets: A SIR model, demand shocks and capital flows},
	journal = {Journal of International Economics},
	volume = {145},
	year = {2023},
	abstract = {We quantify the macroeconomic effects of COVID-19 for a\&nbsp;small open economy. We use a two-country framework combined with a sectoral SIR model to estimate the effects of collapses in foreign demand and supply. The small open economy (country one) suffers from domestic demand and supply shocks due to its own pandemic. In addition, there are external shocks coming from the rest of the world (country two). Aggregate exports of the small open economy decline when foreign demand goes down, and aggregate imports suffer from lockdowns in the rest of the world. We calibrate the model to Turkey. Our results show that the optimal policy, which yields the lowest output loss and saves the maximum number of lives, for the small open economy, is an early and\&nbsp;globally coordinated\&nbsp;full lockdown of 39 days.},
	url = {https://www.sciencedirect.com/science/article/pii/S0022199623001113?via\%3Dihub$\#$fn3},
	author = {Cem {\c C}akmakl{\i} and Selva Demiralp and {\c S}ebnem Kalemli {\"O}zcan and Sevcan Ye{\c s}ilta{\c s} and Muhammed A. Y{\i}ld{\i}r{\i}m}
}
@article {1769151,
	title = {Pretending to be the Law: Violence to Reduce the COVID-19 Outbreak},
	year = {2023},
	abstract = {Did the COVID-19 pandemic create an opportunity to earn population control through illegal violence? We argue that criminal groups in Colombia portray as de facto police by using mass killings to reduce the COVID-19 outbreak. They used massacres as a threat to enforce social distance measures in places they considered worth decreasing mobility. Our results from an Augmented Synthetic Control Method model estimated that commuting to parks fell 20\% more in areas with massacres than in places without mass killings. In addition, we do not find a decline in mobility to workplaces and COVID-19 deaths after the first mass killing. These findings are congruent with the hypothesis that illegal armed groups used fear to enforce mobility restrictions without hurting economic activities and their sources of revenue. However, violence slightly impacted the virus{\textquoteright} spread. Treated areas had a decline of 35 cases per 100,000 inhabitants four months after the first massacre.},
	author = {Diego A. Martin and Dario A. Romero}
}
@article {1769141,
	title = {Food for Growth: A Diagnostics of Namibia{\textquoteright}s Agriculture Sector},
	year = {2023},
	abstract = {
	This growth diagnostic report analyzes the economic constraints that explain the underperformance of the agriculture sector in Namibia. Section 1 starts by showing why Namibia{\textquoteright}s agricultural challenge is unique when compared to the rest of the world. We then describe the sector{\textquoteright}s key features, recent trajectory, and growth potential across different relevant dimensions in Section 2. In Section 3, we provide an adaptation of the growth diagnostic framework to the case of agriculture in Namibia and a detailed analysis of its economic constraints. Finally, Section 4 presents policy guidelines for addressing the challenges described in this report and prioritizing policy interventions accordingly.

},
	author = {Andres Fortunato and Sheyla Enciso}
}
@article {1768941,
	title = {Mental health concerns precede quits: shifts in the work discourse during the Covid-19 pandemic and great resignation},
	journal = {EPJ Data Science},
	volume = {12},
	year = {2023},
	abstract = {
	To study the causes of the 2021 Great Resignation, we use text analysis and investigate the changes in work- and quit-related posts between 2018 and 2021 on Reddit. We find that the Reddit discourse evolution resembles the dynamics of the U.S. quit and layoff rates. Furthermore, when the COVID-19 pandemic started, conversations related to working from home, switching jobs, work-related distress, and mental health increased, while discussions on commuting or moving for a job decreased. We distinguish between general work-related and specific quit-related discourse changes using a difference-in-differences method. Our main finding is that mental health and work-related distress topics disproportionally increased among quit-related posts since the onset of the pandemic, likely contributing to the quits of the Great Resignation. Along with better labor market conditions, some relief came beginning-to-mid-2021 when these concerns decreased. Our study underscores the importance of having access to data from online forums, such as Reddit, to study emerging economic phenomena in real time, providing a valuable supplement to traditional labor market surveys and administrative data.



	Media release: What can we learn from the Great Resignation?

},
	url = {https://epjdatascience.springeropen.com/articles/10.1140/epjds/s13688-023-00417-2},
	author = {R. Maria del Rio-Chanona and Alejandro Hermida-Carrillo and Melody Sepahpour-Fard and Luning Sun and Renata Topinkova and Ljubica Nedelkoska}
}
@inbook {1762976,
	title = {Economic Costs of Friend-shoring},
	booktitle = {Geoeconomic Fragmentation: The Economic Risks from a Fractured World Economy},
	year = {2023},
	pages = {29-38},
	publisher = {CEPR Press | Paris},
	organization = {CEPR Press | Paris},
	abstract = {
	The nature of international trade has changed significantly since the early 1990s: the liberalisation of cross-border transactions, advances in information and communication technology, reductions in transport costs, and innovations in logistics have given firms greater incentives to break up the production process and locate its various stages across many countries. As a result, global supply chains have become very common, accounting for around a half of global trade in 2020 (World Bank 2020).



	The prevalence of global value chains has been underpinned by the well-functioning international trade rule enshrined in the General Agreement on Tariffs and Trade (GATT) and later the WTO, as well as regional agreements. However, geopolitical tensions and disruptions to global value chains {\textendash} ranging from cyber-threats, the US-China trade war (Fajgelbaum et al. 2022), and the Russian invasion of Ukraine to systemic issues such as the Covid-19 pandemic and the climate crisis {\textendash} have led policymakers to re-evaluate their approach to globalisation. Many countries are considering {\textquoteleft}friend-shoring{\textquoteright} {\textendash} trading primarily with countries sharing similar values (such as democratic institutions or maintaining peace) {\textendash} as a way of minimising exposure to weaponisation of trade and securing access to critical inputs, particularly those required for green transition (Arjona et al. 2023, Attinasi et al. 2023).



	In contrast to optimisation under free trade, friend-shoring {\textendash} by imposing constraints {\textendash} is likely to be less efficient. But how high is the price that needs to be paid for the alleged insurance benefits brought about by friend-shoring? To shed some light on this question, this chapter assesses the economic costs of friend-shoring, with a focus on broadly defined emerging Europe and European neighbourhood economies. We make three main points. First, we show that, in the medium run, friend-shoring is bad for most economies and generally leads to real output losses globally. Second, only countries that manage to remain non-aligned may see real output gains, but these gains are much smaller than the losses incurred by other countries and not guaranteed. Third, economic costs of friend-shoring are higher than the economic costs of sanctions imposed on Russia after its invasion of Ukraine.

},
	url = {https://cepr.org/publications/books-and-reports/geoeconomic-fragmentation-economic-risks-fractured-world-economy},
	author = {Beata Javorcik and Lucas Kutzmuller and Helena Schweiger and Muhammed A. Yildirim}
}
@article {1749656,
	title = {Housing in Wyoming: Constraints and Solutions},
	year = {2023},
	abstract = {
	Executive Summary



	Quantitative evidence supports the contention that Wyoming{\textquoteright}s housing market is constrained, to a greater degree than many other parts of the US. Prices are persistently above expectations given economic fundamentals in most parts of the state, and the supply of new housing in Wyoming is on average less responsive to price increases than in other US counties. This has undermined natural population growth and contributed to a low amount of population density close to city centers in Wyoming, as compared to other US cities with comparable population levels. Importantly, this phenomenon is not simply the result of pandemic-era economic frictions. The evidence shows that these constraints have durably persisted in Wyoming.\&nbsp;



	This housing constraint weighs heavily on the broader Wyoming{\textquoteright}s economy, and chokes off growth in new industries that could add to the Wyoming economy beyond its natural resource base. Businesses consistently report a lack of access to workforce as a leading problem that ultimately results from a lack of housing. Some businesses have even tried to create their own housing for employees, and news reports abound of teachers and nurses who secure jobs in Wyoming communities but then have to leave because they cannot find housing.



	Key problems behind Wyoming{\textquoteright}s housing constraints include excessive regulations concerning housing density and insufficient investment in arterial infrastructure. For example, there is evidence that over-regulated minimum lot sizes in Wyoming are blocking the creation of supply to match free-market demand for houses with smaller amounts of land. Other areas of over-regulation include those concerning allowable housing types, building height, parking spaces per dwelling, and the housing approval process itself. This may be seen as surprising given Wyoming{\textquoteright}s reputation as a low-regulation state, but Wyoming maintains restrictions that other states and countries have discarded as outdated and highly counterproductive. Besides outright restrictions on housing development, we find that the most common cost driver undermining the housing development has to do with low public investment in needed arterial infrastructure, especially water systems. Land supply as well as material and construction costs are not primary constraints to housing development across the state, but may matter for select communities.



	We suggest a portfolio of policy changes for the state of Wyoming to explore in order to solve its housing constraints. One category of changes is regulatory, and focuses on deregulation, reducing bureaucratic overhead, and shifting from veto-cratic to democratic housing approval procedures. Another category is focused on investment on infrastructure to support housing, and exploration of state-local funding structures to facilitate continuous infrastructure improvement. If implemented, these changes will not only help to solve Wyoming{\textquoteright}s housing constraints but also facilitate housing development in a way that combats urban sprawl, and in doing so protects open spaces outside of cities that Wyomingites value.

},
	author = {Thảo-Nguy{\^e}n B{\`u}i and Tim Freeman and Farah Kaddah and Lucas Lamby and Hausmann, Ricardo and Tim O{\textquoteright}Brien and Eric Protzer}
}
@article {1732226,
	title = {Gravity with History: On Incumbency Effects in International Trade},
	year = {2023},
	abstract = {We introduce incumbency effects into a tractable dynamic model of international trade. The framework nests the canonical Melitz (2003)-Chaney (2008) model as a special case. The key novelty is that fixed costs of market access decrease with tenure. As a consequence, there is less market exit and entry in response to a shock. We derive a gravity equation and show that, ceteris paribus, countries that liberalized their trade relationship earlier trade more today. We provide supporting evidence for the underlying mechanism and derive an augmented ACR formula (Arkolakis et al., 2012) for the gains from trade that accounts for incumbency effects. A quantitative analysis suggests that our mechanism can explain up to 25\% of countries{\textquoteright} home shares and that the gains from trade are, on average, 10\% larger when accounting for incumbency effects. The analysis further reveals novel distributional effects of trade that benefit real wages but reduce profits.},
	author = {Egger, Peter and Reto Foellmi and Schetter, Ulrich and David Torun}
}
@inbook {1719461,
	title = {A more globally-minded European green industrial policy},
	booktitle = {Sparking Europe{\textquoteright}s New Industrial Revolution: A Policy for Net Zero, Growth and Resilience},
	year = {2023},
	pages = {152},
	publisher = {Bruegel},
	organization = {Bruegel},
	abstract = {Industrial policy has for a long time raised difficult questions for policymakers to unpick. What justifications are there for government intervention in market mechanisms, and how and to what extent should governments intervene? What are the pros and cons of picking {\textquoteleft}winners{\textquoteright} for support? These questions have made a powerful return in the wake of the COVID-19 pandemic and geopolitical uncertainty, and because of the pressing need to move to net-zero emission economies. In addition, the European Union is reviving its industrial policy in the context of support given to companies in the United States under the US Inflation Reduction Act. This volume, produced with financial support from the European Climate Foundation, assesses what must be done to implement industrial policy in a way that will achieve overarching goals while minimising distortions.},
	url = {https://www.bruegel.org/book/sparking-europes-new-industrial-revolution-policy-net-zero-growth-and-resilience},
	author = {Hausmann, Ricardo and Ketan Ahuja}
}
@article {1708351,
	title = {Growth Diagnostics and Competitiveness Study of the Manufacturing Sector in Tanzania},
	year = {2023},
	abstract = {
	Tanzania{\textquoteright}s manufacturing puzzles (and frustrations) seem to be a natural outcome of their policy choice. The Tanzanian economy experienced a significant acceleration over two decades, growing at a compounded annual growth rate of 6\% between 1998 and 2018: Largest rates were recorded and sustained by the super commodity cycle (2005-2014). Within that growth trajectory, manufacturing{\textquoteright}s share of gross domestic product (GDP) has lingered for 30 years below 10\% {\textendash} well below the 23\% target established for 2025 in Tanzania{\textquoteright}s Industrial Development Strategy (2011). As stressed by Diao et al (2021), the bulk of manufacturing value added is created by a few capital-intensive firms, whereas informal manufacturing has increased employment but without significant improvements in productivity/wages. Manufacturing exports surged in 2011 and remained steady since driven by subsector basic metals (gold \&amp; unrefined copper). If these are excluded, the curve mirrors the commodity price boom (likely a price boom rather than a volume boom). Looking only at exports conceals the fact that the bulk of the manufacturing output in Tanzania is sold in the domestic market rather than exported: exports are equivalent to less than 2\% of GDP; domestic sales are seven times higher. While Food and Beverages make up for the largest share of manufacturing value employment and value-added, basic metals are the ones accounting for the vast majority of Tanzania{\textquoteright}s exports.



	The most binding constraint to investments in manufacturing in Tanzania is the availability and quality of electricity supply: Access to electricity is the lowest among peers, with large disparities between rural (22\%) and urban (70\%). Electrical outages are frequent and expensive for the manufacturing sector; firms even plan their production schedules and decide on plant locations based on power reliability. And yet, when we analyze the share of value-added against energy intensity at the sub-sector level, the negative relationship to be expected if electricity is indeed the constraint is there, but too fragile and noisy. Why? The strongest evidence points to the role of trade protection in compensating firms for other constraints, allowing existing manufacturers to capture large shares of domestic value-added while remaining uncompetitive in export markets. Large manufacturing subsectors of moderate to high energy intensity and more capital intensive enjoy higher tariff protection, creating a wedge that allows these industries to thrive in the domestic market. Despite joining numerous free trade agreements, Tanzania remains one of the most restrictive countries from a trade standpoint, eased by filing exceptions that shield individual products and entire domestic industries from competition. We have also found that effective taxation in Tanzania is relatively higher on labor (lower on capital, materialized through massive tax holidays granted within SEZ), skewing returns away from the country{\textquoteright}s relative labor abundance. Failure to address the binding constraints creates a rationale for upholding protection, which reinforces biases towards capital and energy-intensive sectors. These policies go a long way in explaining the Tanzanian manufacturing puzzle.

},
	author = {Klinger, Bailey and Miguel Angel Santos and Camila Arroyo and Ekaterina Vashkinskaya}
}
@article {1707256,
	title = {Eight Decades of Changes in Occupational Tasks, Computerization and the Gender Pay Gap},
	year = {2023},
	abstract = {We build a new longitudinal dataset of job tasks and technologies by transforming the U.S. Dictionary of Occupational Titles (DOT, 1939 -1991) and four books documenting occupational use of tools and technologies in the 1940s, into a database akin to, and comparable with its digital successor, the O*NET (1998 -today). After creating a single occupational classification stretching between 1939 and 2019, we connect all DOT waves and the decennial O*NET databases into a single dataset, and we connect these with the U.S. Decennial Census data at the level of 585 occupational groups. We use the new dataset to study how technology changed the gender pay gap in the United States since the 1940s. We find that computerization had two counteracting effects on the pay gap -it simultaneously reduced it by attracting more women into better-paying occupations, and increased it through higher returns to computer use among men. The first effect closed the pay gap by 3.3 pp, but the second increased it by 5.8 pp, leading to a net widening of the pay gap.},
	author = {Ljubica Nedelkoska and Shreyas Gagdin Matha and McNerney, James and Andre Assumpcao and Dario Diodato and Neffke, Frank}
}
@article {1702731,
	title = {The Impact of a Rise in Expected Income on Child Labor: Evidence from Coca Production in Colombia},
	year = {2023},
	abstract = {Can households{\textquoteright} beliefs about future income shocks affect child labor? This paper examines whether the three-year gap between the announcement (in 2014) and the start (in 2017) of the Illicit Crop Substitution Program (ICSP) increased child labor in Colombia. The ICSP provides farmers with financial support for not planting and harvesting coca leaves {\textendash} the key input of cocaine. My results from a difference-in-differences model using differences in historical coca production show that due to the ICSP announcement, children became four percentage points more likely to work in municipalities with historical coca production than in non{\textendash}coca-growing areas. Although the likelihood of working increased in coca{\textendash}growing areas, the hours worked per child declined modestly after the ICSP announcement. The expansion of the children working in coca fields but the decline in working hours per child produce null effects of the announcement on education outcomes. The rise in the expected income affects the time allocation decision within households in rural areas.},
	author = {Diego A. Martin}
}
@article {1693206,
	title = {What is South Africa{\textquoteright}s Crop Production Potential?},
	year = {2023},
	abstract = {
	Combining satellite data with FAO potential yields we provide a new measure of South Africa{\textquoteright}s current and potential crop farming output. We find that field crop production is twice its census estimate, contributing 1.4\% of GDP rather than 0.7\%, and that achieving potential could increase its contribution a further 0.5\% of GDP. Estimating horticulture potential is more difficult. We find that its 0.7\% contribution to GDP is massively unreported, with actual production at 2.5\%. Reaching potential could increase this number a further 0.5\%. The distance from current to potential output represents over 100 billion 2017 rand of additional gross income and about 350.000 thousand jobs and is unevenly distributed across the country and concentrated in four provinces: Free State, Western Cape, Kwazulu-Natal and Eastern Cape. Our result suggests that there is room to expand agriculture, but because the potential gains are geographically concentrated, the solutions should have a strong location dimension.



	Related project: Growth through Inclusion in South Africa

},
	author = {Sturzenegger, Federico and Klinger, Bailey and Ivan Ordonez}
}
@article {1693201,
	title = {Scaling Partnerships to Activate Idle Community Land in South Africa},
	year = {2023},
	abstract = {
	We discuss three cases of corporate-smallholder partnerships in South Africa{\textquoteright}s former homelands, which have tried to bridge the problem of low productivity by supplying technology, technical assistance and financing along with established channels for sales and distribution. The cases are indicative of some key difficulties faced by such ventures: building trust, finding a suitable partner, successfully transferring technological to small farms, and reducing risk, particularly climate related. In order for these types of partnerships to help close the gap between South Africa{\textquoteright}s two agricultures, solutions to these problems must be provided at greater scale. We explore mechanisms to achieve that scale, drawing lessons from South Africa{\textquoteright}s successful franchising sector, as well as newly emerging business models and technologies from abroad.



	Related project: Growth through Inclusion in South Africa

},
	author = {Klinger, Bailey and Ivan Ordonez and Sturzenegger, Federico}
}
@article {1817386,
	title = {Una historia de la econom{\'\i}a de dos Amazonias: Lecciones sobre generar prosperidad compartida mientras se protege la selva en Per{\'u} y Colombia},
	year = {2023},
	abstract = {A menudo se piensa que alcanzar la prosperidad econ{\'o}mica en la selva amaz{\'o}nica es incompatible con la protecci{\'o}n del ambiente. Los investigadores ambientales suelen advertir, con raz{\'o}n, que la velocidad de la deforestaci{\'o}n actual est{\'a} llevando a la Amazon{\'\i}a a un potencial punto de quiebre a partir del cual la selva no podr{\'a} dejar de deteriorarse hasta convertirse en una s{\'a}bana herb{\'a}cea. Pero se habla menos de lo que hay que hacer para generar prosperidad compartida en las comunidades amaz{\'o}nicas. La deforestaci{\'o}n suele tratarse como algo inevitable a la hora de atender las necesidades humanas, locales y globales. Este reporte sintetiza los hallazgos de dos proyectos del Laboratorio de Crecimiento de Harvard University, que estudian la naturaleza del crecimiento econ{\'o}mico en dos contextos amaz{\'o}nicos: el departamento de Loreto, en Per{\'u}, y los departamentos de Caquet{\'a}, Guaviare y Putumayo, en Colombia. La meta de estas colaboraciones es valerse de la investigaci{\'o}n de alcance global que ha hecho el Growth Lab sobre la naturaleza del crecimiento econ{\'o}mico para aplicar esos m{\'e}todos al reto {\'u}nico de desarrollar rutas hacia la prosperidad en la Amazon{\'\i}a, de manera que no se perjudique a la selva. Este reporte compara y contrasta los hallazgos en la Amazon{\'\i}a peruana y colombiana para evaluar hasta qu{\'e} punto hay lecciones que se puedan generalizar sobre la relaci{\'o}n entre crecimiento econ{\'o}mico y protecci{\'o}n del bosque en la Amazon{\'\i}a.\&nbsp;},
	author = {Cheston, Timothy and Alejandro Rueda-Sanz}
}
@article {1688141,
	title = {The Connectivity Trap: Stuck between the Forest and Shared Prosperity in the Colombian Amazon},
	year = {2023},
	abstract = {
	The Colombian Amazon faces the dual challenge of low economic growth and high deforestation. High rates of deforestation in Colombia have led to a perceived trade-off between economic development and protecting the forest. However, we find little evidence of this trade-off: rising deforestation is not associated with higher economic growth. In fact, the forces of deforestation of some of the world{\textquoteright}s most complex biodiversity are driven by some of the least complex economic activities, like cattle-ranching, whose subsistence-level incomes are unable to meet the economic ambitions for the region. All the while, the majority of the Amazonian departments{\textquoteright} population works in non-forested cities and towns, at a distance from the agriculture frontier that forms the {\textquotedblleft}arc of deforestation.{\textquotedblright} The relative urbanization of the Amazonian departments, despite the vast land mass available, recognizes that prosperity is achieved through close social-economic interactions to expand the knowledge set available to be able to produce more, and more complex activities. Achieving economic goals therefore relies on creating new productive opportunities in non-forested, urban areas.



	The risk of deforestation reduces incentives to improve the connectivity of Amazonian departments with major cities and export markets. The remoteness of these departments increases the cost of {\textquoteleft}exporting{\textquoteright} goods to markets outside the departments. Poor connectivity contributes to the low economic complexity of the departments. In turn, the low complexity reduces incentives to coordinate new investments that would generate returns to greater connectivity. Coordination failures, which occur when a group of economic actors (e.g., firms, workers) could achieve a better outcome but fail to do so because they do not coordinate their actions, are widespread in all three of the Amazonian departments studied. This limits the creation of new capabilities and productive diversification to generate new jobs and higher incomes.



	We posit that economic growth in the Colombian Amazonian is limited by a {\textquotedblleft}connectivity trap{\textquotedblright} whereby the lack of external market connectivity restricts economic complexity, and, in turn, the low complexity fosters the coordination failures that limit returns to new diversification. Ultimately, low returns to diversification further reduce incentives to improve connectivity. Underpinning the connectivity trap is the belief that limiting the connectivity of Amazonian departments with large Colombian cities and the broader global economy will limit incentives for deforestation. Yet, deforestation has accelerated in recent years, despite the continued poor connectivity. We argue that Colombia must create a new national law to curb deforestation by eliminating the financial incentives for land speculation. Reclassifying forested lands under the control of national protection systems with severe restrictions on economic activities and strengthened enforcement, as detailed in an accompanying report, provides the needed legal clarity regarding land formalization. Within the law to eliminate incentives for deforestation, the national government should create a new development approach for the Colombian Amazon. This approach must move beyond a natural resource-based approach to the region, to center on the productive potential of its urban areas, and the carbon markets and tourism potential of its forested areas. One pillar of this approach is to build new public sector capabilities to coordinate investments into new, targeted productive sectors to create new national-local mechanisms of investment promotion. A second pillar is to improve connectivity to external markets through road and air investments between Caquet{\'a}, Guaviare, and Putumayo and major cities and ports.

},
	author = {Goldstein, Patricio and Tim Freeman and Alejandro Rueda-Sanz and Gadgin Matha, Shreyas and Sarah Bui and Nidhi Rao and Tim Cheston and Sebastian Bustos}
}
@article {1689091,
	title = {The impact of return migration on employment and wages in Mexican cities},
	journal = {Journal of Urban Economics },
	volume = {135},
	number = {May},
	year = {2023},
	abstract = {How does return migration from the US to Mexico affect local workers? Return migrants increase the local labor supply, potentially hurting local workers. However, having been exposed to a more advanced U.S. economy, they may also carry human capital that benefits non-migrants. Using an instrument based on involuntary return migration, we find that, whereas workers who share returnees{\textquoteright} occupations experience a fall in wages, workers in other occupations see their wages rise. These effects are, however, transitory and restricted to the city-industry receiving the returnees. In contrast, returnees permanently alter a city{\textquoteright}s long-run industrial composition, by raising employment levels in the local industries that hire them.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S0094119023000268},
	author = {Dario Diodato and Hausmann, Ricardo and Neffke, Frank}
}
@article {1817351,
	title = {La Diversidad Econ{\'o}mica Faltante en la Amazon{\'\i}a Colombiana},
	year = {2023},
	abstract = {
	Las alarmantes tasas de p{\'e}rdida de bosques en la Amazonia colombiana han creado la percepci{\'o}n de que el {\'u}nico medio para lograr la prosperidad econ{\'o}mica es sacrificar el bosque. Este estudio encuentra poca evidencia de esta percepci{\'o}n; m{\'a}s bien, encontramos que el desarrollo econ{\'o}mico y la protecci{\'o}n de los bosques no son una opci{\'o}n entre uno u otro. La tala de bosques est{\'a} impulsada por la ganader{\'\i}a extensiva como medio para asegurar t{\'\i}tulos de propiedad de la tierra. En esencia, la p{\'e}rdida de una de las biodiversidades m{\'a}s ricas del mundo es el resultado de algunas de las actividades econ{\'o}micamente menos complejas que no permiten lograr la prosperidad econ{\'o}mica en la regi{\'o}n. En todo caso, la aceleraci{\'o}n de la deforestaci{\'o}n ha ido acompa{\~n}ada de un per{\'\i}odo de estancamiento econ{\'o}mico.



	El modelo econ{\'o}mico existente en la Amazon{\'\i}a{\textemdash}centrado en la colonizaci{\'o}n agraria y la extracci{\'o}n de minerales{\textemdash}no ha generado prosperidad para la gente y le ha fallado al bosque. La excepcional diversidad del bioma amaz{\'o}nico no se refleja en la econom{\'\i}a de la regi{\'o}n. La econom{\'\i}a amaz{\'o}nica se caracteriza mejor por su baja diversidad y complejidad. Una proporci{\'o}n significativa del empleo est{\'a} vinculada a la administraci{\'o}n p{\'u}blica, m{\'a}s que en otros departamentos del pa{\'\i}s. Muy poca de la producci{\'o}n de los departamentos se destina a ser consumida fuera de los departamentos ("exportada").



	Este estudio busca definir un modelo econ{\'o}mico alternativo para la Amazon{\'\i}a colombiana desde la perspectiva de la complejidad econ{\'o}mica con la sostenibilidad ambiental. La investigaci{\'o}n sobre la complejidad econ{\'o}mica encuentra que el potencial productivo de los lugares depende no s{\'o}lo del suelo o los recursos naturales, sino tambi{\'e}n de las capacidades productivas (o conocimientos t{\'e}cnicos) de su gente. Esta investigaci{\'o}n encuentra que la Amazon{\'\i}a colombiana no se enriquecer{\'a} agregando valor a sus materias primas o especializ{\'a}ndose en una sola actividad econ{\'o}mica. M{\'a}s bien, el desarrollo econ{\'o}mico se describe mejor como un proceso de expansi{\'o}n del conjunto de capacidades presentes para poder producir un conjunto cada vez m{\'a}s diverso y complejo. Este modelo parte de la base de comprender las capacidades productivas existentes en Caquet{\'a}, Guaviare y Putumayo, para identificar sectores econ{\'o}micos de alto potencial que aprovechen esas capacidades para lograr caminos nuevos y sostenibles hacia la prosperidad compartida.



	Lograr una prosperidad compartida en la Amazon{\'\i}a depende de la conectividad y las oportunidades en sus {\'a}reas urbanas. Los principales impulsores de una mayor complejidad econ{\'o}mica{\textemdash}y prosperidad{\textemdash} son las ciudades de la Amazon{\'\i}a. Incluso en las zonas remotas de la Amazon{\'\i}a, la mayor{\'\i}a de la poblaci{\'o}n de Caquet{\'a}, Guaviare y Putumayo vive en zonas urbanas. La baja prosperidad en la Amazon{\'\i}a colombiana se debe a la falta de ciudades pr{\'o}speras. El informe encuentra que las ciudades amaz{\'o}nicas se ven afectadas por la falta de conectividad con las principales ciudades colombianas que limitan su capacidad de {\textquoteright}exportar{\textquoteright} cosas fuera del departamento para luego ampliar la capacidad de {\textquoteright}importar{\textquoteright} las cosas que no se producen localmente como medio para mejorar el bienestar.\&nbsp;

},
	author = {Sebasti{\'a}n Bustos and Cheston, Timothy and Nidhi Rao}
}
@article {1817166,
	title = {La trampa de conectividad: c{\'o}mo la Amazon{\'\i}a colombiana est{\'a} atrapada entre la selva y la prosperidad compartida},
	year = {2023},
	abstract = {
	La Amazon{\'\i}a colombiana enfrenta un desaf{\'\i}o doble: bajo crecimiento econ{\'o}mico y alta deforestaci{\'o}n. Las altas tasas de deforestaci{\'o}n en Colombia han llevado a que se crea que el desarrollo econ{\'o}mico no puede tener lugar si se protege la selva. Nosotros no encontramos evidencia que sustente esa dicotom{\'\i}a: el aumento de la deforestaci{\'o}n no est{\'a} asociado a un mayor crecimiento econ{\'o}mico. Las fuerzas detr{\'a}s de la deforestaci{\'o}n de una de las {\'a}reas con mayor biodiversidad en el planeta se sustentan en algunas de las actividades econ{\'o}micas menos complejas, como la ganader{\'\i}a extensiva, cuyos ingresos son incapaces de cumplir con las ambiciones econ{\'o}micas de la regi{\'o}n. Al mismo tiempo, la mayor{\'\i}a de la poblaci{\'o}n de los departamentos amaz{\'o}nicos trabaja en ciudades y pueblos desprovistos de selva, lejos de la frontera agropecuaria que forma el {\textquotedblleft}arco de deforestaci{\'o}n{\textquotedblright}. La relativa urbanizaci{\'o}n de los departamentos amaz{\'o}nicos, pese a la gran masa de tierra disponible, constituye un reconocimiento de que la prosperidad solo se logra mediante interacciones socioecon{\'o}micas que expanden el conjunto de conocimientos disponible para que se pueda producir m{\'a}s, y mediante actividades m{\'a}s complejas. Por lo tanto, para alcanzar las metas econ{\'o}micas hay que crear nuevas oportunidades productivas en las {\'a}reas urbanas sin selva.



	El riesgo de deforestaci{\'o}n reduce los incentivos para mejorar la conectividad de los departamentos amaz{\'o}nicos con las grandes ciudades y los mercados de exportaci{\'o}n. El car{\'a}cter remoto de estos departamentos aumenta el costo de {\textquotedblleft}exportar{\textquotedblright} bienes a mercados que est{\'a}n fuera de estos departamentos. La conectividad precaria de la regi{\'o}n contribuye a su baja complejidad econ{\'o}mica, que a su vez reduce los incentivos para coordinar nuevas inversiones que podr{\'\i}an generar retornos a partir de una mayor conectividad. Las fallas de coordinaci{\'o}n - que ocurren cuando un grupo de actores econ{\'o}micos (como empresas y trabajadores) podr{\'\i}an lograr un mejor resultado, pero no logran hacerlo pues no coordinan sus acciones respectivas - son extendidas en los tres departamentos amaz{\'o}nicos bajo estudio. Esto limita la creaci{\'o}n de nuevas capacidades y la diversificaci{\'o}n productiva que podr{\'\i}an generar nuevos empleos y mayores ingresos.



	Planteamos que el crecimiento econ{\'o}mico en la Amazon{\'\i}a colombiana est{\'a} siendo limitado por una {\textquotedblleft}trampa de conectividad{\textquotedblright} donde la falta de conectividad con los mercados externos restringe la complejidad econ{\'o}mica, y a su vez la baja complejidad alienta las fallas de coordinaci{\'o}n que limitan los retornos de una nueva diversificaci{\'o}n. A fin de cuentas, los bajos retornos de la diversificaci{\'o}n reducen a{\'u}n m{\'a}s los incentivos para mejorar la conectividad. Como trasfondo de la trampa de conectividad est{\'a} la creencia de que limitar la conectividad de los departamentos amaz{\'o}nicos con las grandes ciudades colombianas y el resto de la econom{\'\i}a global limitar{\'a} tambi{\'e}n los incentivos para la deforestaci{\'o}n. Pero la deforestaci{\'o}n se ha acelerado en los {\'u}ltimos a{\~n}os, mientras que la conectividad sigue siendo muy mala. Nosotros argumentamos que Colombia debe crear una nueva ley nacional para frenar la deforestaci{\'o}n que elimine los incentivos financieros de la especulaci{\'o}n con tierras, al reclasificar las {\'a}reas selv{\'a}ticas bajo control de los sistemas nacionales de protecci{\'o}n para que tengan severas restricciones sobre las actividades que se puedan emprender en ellas, y se refuercen las labores de cumplimiento de la ley, como se comenta en detalle en el reporte siguiente. Con una ley que elimine los incentivos para la deforestaci{\'o}n, el gobierno nacional debe crear un nuevo enfoque del desarrollo para la Amazon{\'\i}a colombiana. Este enfoque debe trascender el basado en los recursos naturales y centrarse en el potencial productivo de las {\'a}reas urbanas, as{\'\i} como en los mercados de carbono y el potencial tur{\'\i}stico de las {\'a}reas selv{\'a}ticas. Un pilar de este enfoque es la construcci{\'o}n de nuevas capacidades en el sector p{\'u}blico, que le permitan coordinar inversiones en nuevos sectores productivos espec{\'\i}ficos, para crear nuevos mecanismos locales y nacionales de promoci{\'o}n de inversiones. Un segundo pilar es la mejora de la conectividad con los mercados externos, mediante inversiones en carreteras y transporte a{\'e}reo entre Caquet{\'a}, Guaviare y Putumayo, y las grandes ciudades y los puertos.

},
	author = {Goldstein, Patricio and Timothy Freeman and Alejandro Rueda-Sanz and Gadgin Matha, Shreyas and Nidhi Rao and Sarah Bui and Cheston, Timothy and Sebastian Bustos}
}
@article {1817346,
	title = {Mirar el bosque m{\'a}s all{\'a} de sus {\'a}rboles: Una estrategia para frenar la deforestaci{\'o}n y avanzar en una prosperidad compartida en la Amazon{\'\i}a colombiana},
	year = {2023},
	abstract = {{\textquestiondown}Hay que sacrificar la selva para traer prosperidad econ{\'o}mica a la Amazon{\'\i}a colombiana? Seg{\'u}n este compendio de investigaci{\'o}n compuesto por una serie de estudios sobre esa regi{\'o}n, la respuesta es {\textquotedblleft}no{\textquotedblright}: la percepci{\'o}n que hay un dilema entre crecimiento econ{\'o}mico y protecci{\'o}n de la selva es una falsa dicotom{\'\i}a. Los factores que impulsan la deforestaci{\'o}n y la prosperidad son distinguibles entre s{\'\i}, y tienen lugar en sitios diferentes. La deforestaci{\'o}n ocurre en la frontera agropecuaria, donde uno de los entornos con mayor complejidad biol{\'o}gica del mundo est{\'a} siendo destruido por algunas de las actividades econ{\'o}micas menos complejas, en particular la ganader{\'\i}a extensiva. En cambio, los motores econ{\'o}micos de la Amazon{\'\i}a son sus {\'a}reas urbanas, que en su mayor{\'\i}a est{\'a}n ubicadas lejos del borde de la selva, como es el caso de las {\'a}reas localizadas en el piedemonte y que no cuentan con un bosque denso. Estas ciudades ofrecen mayor complejidad econ{\'o}mica con su acceso a un rango m{\'a}s amplio de capacidades productivas en actividades de mayores ingresos, con poca presencia de las actividades que favorecen la deforestaci{\'o}n. Tal vez la cara menos notoria de la vida en cada una de las tres regiones amaz{\'o}nicas estudiadas, Caquet{\'a}, Guaviare y Putumayo, es que la mayor{\'\i}a de la gente vive en {\'a}reas urbanas. Este hecho dice mucho sobre la geograf{\'\i}a econ{\'o}mica de esos lugares: incluso en las partes m{\'a}s remotas de la Amazon{\'\i}a, la gente quiere vivir cerca de los dem{\'a}s, en {\'a}reas densamente pobladas. Esto adem{\'a}s corrobora los hallazgos de nuestra investigaci{\'o}n global en las {\'u}ltimas dos d{\'e}cadas: para traer prosperidad hay que expandir las capacidades productivas disponibles a nivel local y as{\'\i} diversificar la producci{\'o}n de ese lugar hacia m{\'a}s actividades y que posean mayor complejidad. \&nbsp;},
	author = {Cheston, Timothy and Goldstein, Patricio and Timothy Freeman and Alejandro Rueda-Sanz and Hausmann, Ricardo and Gadgin Matha, Shreyas and Sebasti{\'a}n Bustos and Eduardo Lora and Sarah Bui and Nidhi Rao}
}
@article {1689831,
	title = {A Growth Perspective on Wyoming},
	year = {2023},
	abstract = {
	This report sets out to understand if the economy of the State of Wyoming is positioned to grow into the future. To do this, the report begins by investigating the past. To know where the state economy could be headed, and how that direction may be improved, it is critical to understand how the state developed the economic structure and drivers that it has today. Thus, Wyoming{\textquoteright}s economic trajectory is explored over the long, medium, and short term. From this investigation, we find that Wyoming faces an overall growth problem, but we also find a high degree of variation in economic engines and growth prospects across the state. The problem that this report identifies is that the composition of economic activities is not positioned to sustain a high quality of life across all parts of the state.



	{\textquotedblleft}Across all parts of the state{\textquotedblright} is an essential part of the problem statement for Wyoming. While some local and regional economies in the state are growing and bumping up against identifiable constraints, other local and regional economies are experiencing sustained contractions and will require new sources of growth in order to retain (or expand) population and high quality of life. Since economic dynamics vary significantly across the state, analysis is conducted in as much geographic detail as possible. By combining historical and geographic dimensions of growth, this report aims to inform pathways for sustained and inclusive prosperity across the of Wyoming.



	Related project: Pathways to Prosperity in Wyoming

},
	author = {Thảo-Nguy{\^e}n B{\`u}i and Tim Freeman and Farrah Kaddah and Lucas Lamby and Li, Yang and Tim O{\textquoteright}Brien and Eric Protzer and Alejandro Rueda-Sanz and Ricardo Villasmil and Hausmann, Ricardo}
}
@article {1688146,
	title = {Seeing the Forest for More than the Trees: A Policy Strategy to Curb Deforestation and Advance Shared Prosperity in the Colombian Amazon},
	year = {2023},
	abstract = {Does economic prosperity in the Colombian Amazon require sacrificing the forest? This research compendium of a series of studies on the Colombian Amazon finds the answer to this question is no: the perceived trade-off between economic growth and forest protection is a false dichotomy. The drivers of deforestation and prosperity are distinct {\textendash} as they happen in different places. Deforestation occurs at the agricultural frontier, in destroying some of the world{\textquoteright}s most complex biodiversity by some of the least economically complex activities, particularly cattle-ranching. By contrast, the economic drivers in the Amazon are its urban areas often located far from the forest edge, including in non-forested piedmont regions. These cities offer greater economic complexity by accessing a wider range of productive capabilities in higher-income activities with little presence of those activities driving deforestation. Perhaps the most underappreciated facet of life in each of the three Amazonian regions studied, Caquet{\'a}, Guaviare, and Putumayo, is that the majority of people live in urban areas. This is a telling fact of economic geography: that even in the remote parts of the Amazon, people want to come together to live in densely populated areas. This corroborates the findings of our global research over the past two decades that prosperity results from expanding the productive capabilities available locally to diversify production to do more, and more complex, activities.},
	author = {Cheston, Timothy and Goldstein, Patricio and Timothy Freeman and Alejandro Rueda-Sanz and Hausmann, Ricardo and Gadgin Matha, Shreyas and Sebastian Bustos and Eduardo Lora and Sarah Bui and Nidhi Rao}
}
@article {1688131,
	title = {The Economic Tale of Two Amazons: Lessons in Generating Shared Prosperity while Protecting the Forest in the Peruvian and Colombian Amazon},
	year = {2023},
	abstract = {Achieving economic prosperity in the Amazon rainforest is often seen as incompatible with protecting the forest. Environmental researchers rightly warn that rapid deforestation is pushing the Amazon close to a potential tipping point of forest dieback into grassy savanna. Less has been said about what is required to generate shared prosperity in Amazonian communities. Deforestation is often treated as inevitable to serve human needs, local and global. This report synthesizes the findings of two engagements by the Growth Lab at Harvard University that study the nature of economic growth in two Amazonian contexts: Loreto in Peru, and Caquet{\'a}, Guaviare, and Putumayo, in Colombia. The aim of these engagements is to leverage the Growth Lab{\textquoteright}s global research into the nature of economic growth to apply those methods to the unique challenge of developing paths to prosperity in the Amazon in ways that do not harm the forest. This report compares and contrasts the findings from the Peruvian and Colombian Amazon to assess the extent to which there are generalizable lessons on the relationship between economic growth and forest protection in the Amazon.},
	author = {Tim Cheston and Alejandro Rueda-Sanz}
}
@article {1685711,
	title = {Evaluating the Principle of Relatedness: Estimation, Drivers and Implications for Policy},
	year = {2023},
	abstract = {A growing body of research documents that the size and growth of an industry in a place depends on how much related activity is found there. This fact is commonly referred to as the "principle of relatedness." However, there is no consensus on why we observe the principle of relatedness, how best to determine which industries are related or how this empirical regularity can help inform local industrial policy. We perform a structured search over tens of thousands of specifications to identify robust {\textendash} in terms of out-of-sample predictions {\textendash} ways to determine how well industries fit the local economies of US cities. To do so, we use data that allow us to derive relatedness from observing which industries co-occur in the portfolios of establishments, firms, cities and countries. Different portfolios yield different relatedness matrices, each of which help predict the size and growth of local industries. However, our specification search not only identifes ways to improve the performance of such predictions, but also reveals new facts about the principle of relatedness and important trade-offs between predictive performance and interpretability of relatedness patterns. We use these insights to deepen our theoretical understanding of what underlies path-dependent development in cities and expand existing policy frameworks that rely on inter-industry relatedness analysis.},
	author = {Li, Yang and Neffke, Frank}
}
@article {1681026,
	title = {Looking for Virtue in Remoteness: Policy Recommendations for Sustainable and Inclusive Growth in the Peruvian Amazonia},
	year = {2023},
	abstract = {
	Loreto is a place full of contrasts. Although it is the largest department in Peru, it is one of the least populated in the country. Its capital, Iquitos, is closer to Brazil and Colombia{\textquoteright}s border states than it is to the capitals of its neighboring regions in Peru - San Martin and Ucayali. Iquitos can only be reached by air or river, making it one of the largest cities in the world without road access. Since its foundation, Loreto{\textquoteright}s economy has depended on the exploitation of natural resources: from the Amazon rubber boom at the end of the 19th and the beginning of the 20th centuries, to the oil extraction and exploitation of forest resources that predominate today. This model has brought with it significant environmental damage and has produced a pattern of slow and volatile growth, which has opened an ever-widening gap between the economy of the region and that of the rest of the country. Between 1980 and 2018, Loreto grew at an average compound annual growth rate four times lower than the rest of Peru. Otherwise stated, while the rest of Peru has tripled the size of its economy, Loreto increased it by just under one-third.



	Within the last decade (2008-2018), the region has distanced itself from its Amazonian peers in the country (Ucayali, San Mart{\'\i}n, and Madre de Dios), which have grown at an average annual growth rate five times higher. Loreto{\textquoteright}s average per capita income fell from three-quarters of the national average in 2008 to less than half of it by 2018. In addition to - or perhaps as a consequence of - its economic challenges, Loreto is also among the departments with the worst indicators of social development, including the highest levels of anemia and child malnutrition in Peru.



	In this context, the Growth Lab at Harvard University partnered with the Gordon and Betty Moore Foundation to develop a research study that would provide inputs and policy recommendations to boost the development of the region and foster sustainable prosperity.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Tudela Pye, Jorge and Frank Muci and Li, Yang and Miralles-Wilhelm, Fernando and Ana Grisanti and Lu, Jessie}
}
@article {1668359,
	title = {Innovation on Wings: Nonstop Flights and Firm Innovation in the Global Context},
	journal = {Management Science},
	year = {2023},
	abstract = {
	We study whether, when, and how better connectivity through nonstop flights leads to positive innovation outcomes for firms in the global context. Using unique data of all flights emanating from 5,015 airports around the globe from 2005 to 2015 and exploiting a regression discontinuity framework, we report that a 10\% increase in nonstop flights between two locations leads to a 3.4\% increase in citations and a 1.4\% increase in the production of collaborative patents between those locations. This effect is driven primarily by firms as opposed to academic institutions. We further study the characteristics of firms and firm locations that are salient to the relation between nonstop flights and innovation outcomes across countries. Using a gravity model, we posit and find that the positive effect of nonstop flights on innovation is stronger for firms and subsidiaries with greater innovation mass (e.g., stocks of inventors and R\&amp;D spending), located in innovation hubs or countries that are deemed technology leaders, and that are separated by large cultural or temporal distance.



	Research Summary: The Role of Nonstop Flights in Fostering Global Firm Innovation

},
	url = {https://pubsonline.informs.org/doi/10.1287/mnsc.2023.4682},
	author = {Dany Bahar and Choudhury, Prithwiraj and Do Yoon Kim and Wesley W. Koo}
}
@article {1668278,
	title = {The Value of Early-Career Skills},
	year = {2023},
	abstract = {We develop novel measures of early-career skills that are more detailed, comprehensive,\&nbsp;and labor-market-relevant than existing skill proxies. We exploit that skill requirements\&nbsp;of apprenticeships in Germany are codified in state-approved, nationally standardized\&nbsp;apprenticeship plans. These plans provide more than 13,000 different skills and the exact\&nbsp;duration of learning each skill. Following workers over their careers in administrative\&nbsp;data, we find that cognitive, social, and digital skills acquired during apprenticeship are\&nbsp;highly {\textendash} yet differently {\textendash} rewarded. We also document rising returns to digital and social\&nbsp;skills since the 1990s, with a more moderate increase in returns to cognitive skills.},
	author = {Christina Langer and Simon Wiederhold}
}
@article {1667915,
	title = {A Growth Diagnostic of Kazakhstan},
	year = {2023},
	abstract = {
	This Growth Diagnostic Report was generated as part of a research engagement between the Growth Lab at Harvard University and the Astana International Financial Centre (AIFC) between June 2021 and December 2022. The purpose of the engagement was to formulate evidence-based policy options to address critical issues facing the economy of Kazakhstan through innovative frameworks such as growth diagnostics and economic complexity. This report is accompanied by the Economic Complexity Report that applies findings from this report on economy-wide challenges to growth and diversification in order to formulate attractive and feasible opportunities for diversification.



	Kazakhstan faces multifaceted challenges to sustainable and inclusive growth: macroeconomic uncertainty, an uneven economic playing field, and difficulties in acquiring productive capabilities, agglomerating them locally, and accessing export markets. Underlying Kazakhstan{\textquoteright}s transformational growth in the last two decades{\textemdash}during which real GDP per capita multiplied by 2.5x{\textemdash}are two periods that underscore how Kazakhstan{\textquoteright}s growth trajectory has been correlated with oil and gas dynamics. The early and mid-2000s characterized by the global commodity supercycle led to an expansion of the economy upwards of 8\% annually, with a mild slowdown during the global financial crisis. In 2014, Kazakhstan{\textquoteright}s growth slowed with the collapse of commodity prices, and alternative engines of growth have not been strong enough to fend against volatility since. These trends, along with growing uncertainty in the long-run demand of oil and gas, continue to highlight the limitations of relying on natural resources to drive development.



	As in the experience of other major oil producers, diversification of Kazakhstan{\textquoteright}s non-oil economy is a critical pathway to drive a new era of sustainable and inclusive growth and mitigate the impacts of commodity price shocks on the country{\textquoteright}s economy. Kazakhstan{\textquoteright}s growth trajectory demonstrates that the country has enough oil to suffer symptoms of Dutch disease, but not enough to position it as a reliable engine of growth in the future. Development of non-oil activities has been a policy objective of the government of Kazakhstan for some time, but previous efforts for target sectors have failed to generate sufficient exports and investments to produce alternative engines of growth. This report characterizes the relationship between growth, industrial policy, and the constraints to diversification in Kazakhstan. It utilizes the growth diagnostics framework to understand why efforts to diversify into non-oil tradables has been challenging. The report proposes a growth syndrome to explain the constraints preventing Kazakhstan from achieving productive diversification and sustainable growth.



	This report is organized in six sections, including a brief introduction.



	
		Section 2 provides an overview of the methodological approach to the Growth Diagnostics analysis.
	
	
		Section 3 describes Kazakhstan{\textquoteright}s growth trajectory and macroeconomic performance, as well as the motivations behind pursuing a diversification strategy to strengthen the non-oil economy.
	
	
		Section 4 summarizes three features of the country that manifest in a set of economy-wide constraints to growth and diversification.
	
	
		Section 5 analyzes each of the identified constraints in detail, describing their dynamics and breaking down the aspects that appear to be binding.
	
	
		Section 6 concludes by suggesting potential policy guidelines towards alleviation of the identified constraints.
	



	Related project: Sustainable and Inclusive Growth in Kazakhstan

},
	author = {Hausmann, Ricardo and Nikita Taniparti and Clement Brenot and Douglas Barrios and Can Soylu and Roukaya El Houda and Ekaterina Vashkinskaya and Felicia Belostecinic and Sophia Henn}
}
@article {1667774,
	title = {The Economic Complexity of Kazakhstan: A Roadmap for Sustainable and Inclusive Growth},
	year = {2023},
	abstract = {
	Since the end of the 1990s, Kazakhstan has relied on oil and gas as the main drivers of economic growth. While this has led to rapid development of the country, especially during years of high oil prices, it has also subjected the economy to more severe downturns during oil shocks, bouts of currency overvaluation, and procyclicality in growth and public spending.



	Stronger economic diversification has the potential to drive a new era of sustainable growth by supporting new sources of value added and export revenue, creating new and better jobs, and making the economy more resistant to fluctuations in oil dynamics. However, repeated efforts to stimulate alternative, non-oil engines of growth have so far been inconclusive.



	This report introduces a new framework to identify opportunities for economic diversification in Kazakhstan. This framework attempts to improve upon previous methods, notably by building country and region-specific challenges to the development of the non-oil economy directly into the framework to identify feasible and attractive opportunities. These challenges are presented in detail in the Growth Diagnostic of Kazakhstan and are summarized along three high-level constraints: (i) an uneven economic playing field dominated by government-related public and private-entities; (ii) difficulties in acquiring productive capabilities, agglomerating them locally, and accessing export markets; and (iii) ongoing macroeconomic factors lowering external competitiveness lower and making the economy less stable. 



	Our approach applies the economic complexity paradigm to identify what specific products and industries are most feasible for diversification, based on the existing productive capabilities demonstrated in the economy. We examine Kazakhstan{\textquoteright}s economic complexity at the national but also subnational levels, highlighting the heterogeneity of export baskets across regions that makes an analysis of opportunities at the subnational level essential.



	Related project: Sustainable and Inclusive Growth in Kazakhstan

},
	author = {Hausmann, Ricardo and Douglas Barrios and Clement Brenot and Nikita Taniparti and Eric Protzer and Sophie Henn}
}
@article {1783261,
	title = {Yet it Endures: The Persistence of Original Sin},
	journal = {Open Economies Review},
	volume = {34},
	number = {1},
	year = {2023},
	pages = {1-42},
	abstract = {Notwithstanding announcements of progress, {\textquotedblleft}international original sin{\textquotedblright} (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge their currency exposures through transactions with local pension funds and other resident investors. The result is to shift the locus of currency mismatches within emerging economies but not to eliminate them. Other countries have limited original sin by limiting external borrowing, passing up valuable investment opportunities in pursuit of stability. We document these trends, analyzing regional and global aggregates and national case studies. Our conclusion is that there remains a case for an international initiative to address currency risk in low- and middle-income economies so they can more fully exploit economic development opportunities.},
	url = {https://link.springer.com/article/10.1007/s11079-022-09704-3},
	author = {Hausmann, Ricardo and Barry Eichengreen and Ugo Panizza}
}
@article {1668356,
	title = {Refugees, Trade, and FDI},
	journal = {Oxford Review of Economic Policy},
	volume = {38},
	number = {3},
	year = {2022},
	pages = {487-513},
	abstract = {Humanitarian policies aimed at welcoming forced migrants may yield unexpected economic dividends. This article focuses on the trade and investment links forged by refugees between their countries of resettlement and the origins they fled. We document how such immigrant-links differ in the case of refugees, focusing on why their opportunity sets might differ and the difficulties in establishing economic connections against a backdrop of civil conflict and political unrest. We conclude by discussing a range of policies aimed at engaging refugee diasporas to foster development at refugees{\textquoteright} origins.},
	url = {https://academic.oup.com/oxrep/article/38/3/487/6701698},
	author = {Dany Bahar and Christopher Parsons and Pierre-Louis V{\'e}zina}
}
@article {1668355,
	title = {Birthplace diversity and economic complexity: Cross-country evidence},
	journal = {Research Policy },
	volume = {51},
	number = {8},
	year = {2022},
	abstract = {We empirically investigate the relationship between a country{\textquoteright}s economic complexity and the diversity in the birthplaces of its immigrants. Our cross-country analysis suggests that countries with higher birthplace diversity by one\&nbsp;standard deviation\&nbsp;are more economically complex by 0.1 to 0.18 standard deviations above the mean. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. We address endogeneity concerns by instrumenting diversity through predicted stocks from a pseudo-gravity model as well as from a standard shift-share approach. Finally, we provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country{\textquoteright}s export basket.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S0048733320300718},
	author = {Dany Bahar and Rapoport, Hillel and Turati, Riccardo}
}
@article {1665180,
	title = {Development in a Complex World: The Case of Ethiopia},
	year = {2022},
	abstract = {
	This research compendium provides an explanation of Ethiopia{\textquoteright}s fundamental economic challenge of slowing economic growth after an exceptional growth acceleration {\textemdash} a challenge that has been compounded by COVID-19, conflict, and climate change impacts. Ethiopia has experienced exceptional growth since the early 2000s but began to see a slowdown in the capacity of the economy to grow, export, and produce jobs since roughly 2015. This intensified a set of macroeconomic challenges, including high, volatile, and escalating inflation. This compendium identifies a path forward for more sustainable and inclusive growth that builds on the government{\textquoteright}s Homegrown Economic Reform strategy. It includes growth diagnostics and economic complexity research as well as applications to unpack interacting macroeconomic distortions and inform diversification strategies. Drawing on lessons from past success in Ethiopia and new constraints, this compendium offers insights into what the Government of Ethiopia and the international community must do to unlock resilient, post-conflict economic recovery across Ethiopia.



	The research across the chapters of this compendium was developed during the Growth Lab{\textquoteright}s research project in Ethiopia from 2019 to 2022, supported through a grant by the United States Agency of International Development (USAID). This research effort, which was at times conducted in close collaboration with government and non-government researchers in Ethiopia, pushed the boundaries of Growth Lab research. The project team worked to understand to intensive shocks faced by the country and enable local capability building in the context of limited government resources in a very low-income country. Given the value of this learning, this compendium not only discusses challenges and opportunities in Ethiopia in significant detail but also describes how various tools of diagnostic work and economic strategy-building were used in practice. As such, it aims to serve as a teaching resource for how economic tools can be applied to unique development contexts. The compendium reveals lessons for Ethiopian policymakers regarding the country{\textquoteright}s development path as well as numerous lessons that the development community and development practitioners can learn from Ethiopia.

},
	author = {Hausmann, Ricardo and Tim O{\textquoteright}Brien and Tim Cheston and Ibrahim Worku Hassen and Can Soylu and Kishan Shah and Nikita Taniparti and Pankhuri Prasad and Pablo Andr{\'e}s Neumeyer}
}
@article {1666469,
	title = {What Can the Millions of Random Treatments in Nonexperimental Data Reveal About Causes?},
	journal = {SN Computer Science},
	volume = {3},
	number = {6},
	year = {2022},
	abstract = {We propose a new method to estimate causal effects from nonexperimental data. Each pair of sample units is first associated with a stochastic {\textquoteleft}treatment{\textquoteright}{\textemdash}differences in factors between units{\textemdash}and an effect{\textemdash}a resultant outcome difference. It is then proposed that all pairs can be combined to provide more accurate estimates of causal effects in nonexperimental data, provided a statistical model relating combinatorial properties of treatments to the accuracy and unbiasedness of their effects. The article introduces one such model and a Bayesian approach to combine the O(n2) pairwise observations typically available in nonexperimental data. This also leads to an interpretation of nonexperimental datasets as incomplete, or noisy, versions of ideal factorial experimental designs. This approach to causal effect estimation has several advantages: (1) it expands the number of observations, converting thousands of individuals into millions of observational treatments; (2) starting with treatments closest to the experimental ideal, it identifies noncausal variables that can be ignored in the future, making estimation easier in each subsequent iteration while departing minimally from experiment-like conditions; (3) it recovers individual causal effects in heterogeneous populations. We evaluate the method in simulations and the National Supported Work (NSW) program, an intensively studied program whose effects are known from randomized field experiments. We demonstrate that the proposed approach recovers causal effects in common NSW samples, as well as in arbitrary subpopulations and an order-of-magnitude larger supersample with the entire national program data, outperforming Statistical, Econometrics and Machine Learning estimators in all cases. As a tool, the approach also allows researchers to represent and visualize possible causes, and heterogeneous subpopulations, in their samples.},
	url = {https://link.springer.com/article/10.1007/s42979-022-01319-2},
	author = {Andre Ribeiro and Neffke, Frank and Hausmann, Ricardo}
}
@article {1665258,
	title = {A Survey of Importers: Results of a Survey Conducted in Collaboration with the Ethiopian Economics Association},
	year = {2022},
	abstract = {
	Executive Summary



	Ethiopia suffers from a chronic shortage of foreign exchange (forex).[1] The resulting lack of access to imports prevents firms from accessing imported inputs required for production. This creates a vicious cycle as exporters are constrained by this same problem, which further reduces overall supply of foreign exchange in the Ethiopian economy. The inability to reliably access foreign exchange for imports affects firm decisions on sourcing, capacity, and output. While the cost of this constraint is known to be high on the Ethiopian economy and firms are known to use a range of measures to attempt to bypass this constraint, quantitative assessments of the problem and response actions by firms are limited. It is in this context that an importer survey was conducted with the goal of informing policy decisions. A total of 202 firms with an active importing license were interviewed in March-April 2022. These firms were randomly sampled from firms registered with an importer license.



	All firms interviewed reported that they were operating below capacity, often well below capacity. Foreign exchange shortages were the main reason respondent firms cited for not operating at full capacity (63\% of firms reporting this as their biggest constraint). Forex shortages far surpass the second and third reasons cited for not operating at full capacity {\textemdash} constraints due to the conflict (13\%) and COVID-19 restrictions (11\%). Firms operating below capacity cited forex shortages as the main constraint, regardless of whether they imported or not in the previous year. This was the most pressing constraint reported by firms of all sizes and sectors surveyed. It was the most pressing constraint faced by exporters and by foreign-owned firms as well as non-exporters and domestic firms. Amongst the total sample of firms with a renewed importer license, more than one-third of respondent firms (37\%) had not imported in FY2020-21.



	Overall, 74\% of firms reported experiencing challenges in accessing forex. Access to forex was reported as most challenging for manufacturing firms and smaller firms but impacted all sectors and firm sizes. The losses attributed to forex scarcity at the firm level were largest for agricultural firms, for micro-firms, and for firms that did not import at all in the previous year. In general, the larger the firm sales, the higher the likelihood that they were able import. The survey found different types of imports for different sectors. Manufacturing firms imported a large share semi-finished goods as imports as compared to agricultural firms that primarily imported finished goods. The survey results find that foreign exchange shortages and an inability to import are most severe for the manufacturing and agriculture sectors, small and micro-sized firms, and all non-exporters. However, the constraint is also the top problem facing all firm types in the survey, including exporters and foreign-owned firms.



	The primary means of accessing foreign exchange where it did occur was through specialized forex accounts or {\textquoteleft}diaspora{\textquoteright} accounts. The second most common means of accessing foreign exchange was through retention accounts available to exporters. The black market featured in many responses, but questions across the survey suggest that self-reported use of the black market by survey participants is underreported versus actual usage. The ability to source foreign exchange differed significantly by firm size. Exporting firms primarily used retention account earnings, as compared to non-exporters, which relied more on forex accounts. For faster access to forex, most firms reported that they approach banks, followed by turning to the black market. Friends and family abroad also served as a source of forex for one-quarter of firm respondents, and that foreign exchange was often used immediately. Foreign exchange access from banks is nevertheless a major pain point for firms. Most firms (55\%) requested forex from a bank in the past year. On average, fulfilled forex requests took three months to be processed when they were fulfilled, but many firms reported that they have an unfulfilled request that has been in the system for more than a year. These firms are especially likely to report foreign exchange access as their top challenge.



	The survey finds that individual firms do not tend to use both official and black-market foreign exchange sources but rather tend to access all their forex at the (lower) official rate or all at the (higher) black-market. Large firms import most of their products at the official rate. By contrast, most small and micro firms import through other means. Manufacturing firms are also more likely to import all their production through other means and outside of the banking system. Non-exporting firms tended to import through other means than the official rate and outside of the banking system at a higher prevalence than exporting firms. The survey gleaned new insights on the implicit exchange rate that firms face as they navigate official and black-market channels of foreign exchange access. The survey does not allow for a precise estimate of the transaction-weighted exchange rate facing the economy but finds firm-level estimates align with previous macro-level estimates. The implicit exchange rate was higher for non-exporting firms, which show a greater willingness to pay a higher exchange rate to access imports. This signals the importance of the retention account for exporters to guarantee an import price closer to the official exchange rate.



	When asked about the maximum rate firms would pay to guarantee access to forex, some groups of firms were willing to pay higher amounts, including all non-exporters, firms that imported in the past year, and those that declared forex access a challenge. When compared to the implied rate they paid in the past year, many firms are willing to pay more than the implied rate to guarantee access to forex. Firm perspectives on policy changes to the exchange rate underscored challenges faced by policymakers. Current policy has been one of a crawling peg, with changes within the last several years to increase the rate of devaluation. The survey asked respondents about their support for faster devaluation, for a one-off movement to unify the official rate with the black-market rate, or about alternative exchange rate systems such as a floating exchange rate. Most respondents (71\%) opposed maintaining the current regime, yet no option received majority support. Most firms appear to want both a stronger exchange rate and easier access to foreign exchange despite a tradeoff between these two priorities. The largest share of support for policy change was to adjust the exchange rate such that the official rate matches the black-market rate.

[1] See "Development in a Complex World: The Case of Ethiopia{\textquotedblright} -{\textendash} the Growth Lab{\textquoteright}s compendium of project research from its Advancing Economic Diversification in Ethiopia project.},
	author = {Hausmann, Ricardo and Tim O{\textquoteright}Brien and Tim Cheston and Nikita Taniparti and Ibrahim Worku Hassen and Can Soylu and Lucas Lamby and Pablo Andr{\'e}s Neumeyer}
}
@article {1663435,
	title = {Search, Transport Costs, and Labor Markets in South Africa},
	year = {2022},
	abstract = {
	South Africa{\textquoteright}s labor market exhibits a unique equilibrium with one of the highest unemployment rates in the world and yet a low level of informal employment. The unemployment rate has remained high and persistent over recent decades, in spite of the formal demise of the apartheid regime and subsequent transition to democracy in 1994. This paper uses a matching model of the labor market to argue that spatial considerations combined with low productivity of informal work may be responsible for such an outcome. Spatial dispersion inherited from the apartheid regime thins the labor market, creating exclusion and perpetuating spatial segregation. In most developing countries, the result would be higher employment in informal or own account employment. However, with low productivity in the informal sector, the high rate of exclusion shows itself in higher unemployment rates instead. Transportation costs and housing deregulation may become key factors in improving the working of the labor market in South Africa especially if it is not possible to raise informal productivity.



	Related project: Growth Through Inclusion in South Africa

},
	author = {Kishan Shah and Sturzenegger, Federico}
}
@article {1663436,
	title = {The Long-Run Effects of South Africa{\textquoteright}s Forced Resettlements on Employment Outcomes},
	year = {2022},
	abstract = {
	Can South Africa{\textquoteright}s segregation policies explain, at least partially, its current poor employment outcomes? To explore this question, we study the long-term impact of the forced resettlement of around 3.5 million black South Africans from their communities to the so-called {\textquotedblleft}homelands{\textquotedblright} or {\textquotedblleft}Bantustans{\textquotedblright}, between 1960 and 1991. Our empirical strategy exploits the variability in the magnitude of resettlements between communities. Two main findings. First, the magnitude of outgoing internal migrations was largest for districts close to former homelands. Second, districts close to former homelands have higher rates of non-employed population in 2011. Together the evidence suggests that districts that experienced racial segregation policies most intensely, as measured by outgoing forced resettlements, have worse current employment outcomes.



	Related project: Growth Through Inclusion in South Africa

},
	author = {Alexia Lochmann and Nidhi Rao and Martin A. Rossi}
}
@article {1662442,
	title = {An Integrated Epidemiological and Economic Model of COVID-19 NPIs in Argentina},
	year = {2022},
	abstract = {We added a multi-sectoral economic framework to a SVEIR epidemiological model, combining the economic rationale of the DAEDALUS model with a detailed treatment of lockdown fatigue and declining compliance with Public Health and Social Measures reported in recent empirical work, to quantify the epidemic and economic benefits and costs of alternative lockdown and PHSM policies, both in terms of intensity and length. Our calibration replicates key features of the case and death-curves and economic cost for Argentina in 2021. The model allows us to quantify the short-term policy trade-off between lives and livelihoods and show that it can be significantly improved with targeted pharmaceutical policies such as vaccine rollout to reduce mainly severe disease and the death toll from COVID-19, as has been highlighted by previous studies.},
	author = {Adolfo Rubinstein and Eduardo Levy Yeyati and Alejandro L{\'o}pez Osornio and Federico Filippini and Adrian Santoro and Cintia Cejas and Ariel Bardach and Alfredo Palacios and Fernando Argento and Jamile Balivian and Federico Augustovski and Andr{\'e}s Pich{\'o}n Riviere}
}
@article {1662413,
	title = {Economic Costs of Friend-shoring},
	year = {2022},
	abstract = {Geo-political tensions and disruptions to global value chains have led policymakers to reevaluate their approach to globalisation. Many countries are considering regionalisation and friend-shoring {\textendash} trading primarily with countries sharing similar values {\textendash} as a way of minimising exposure to weaponisation of trade and securing access to critical inputs. If followed through, this process has the potential to reverse global economic integration of recent decades. This paper estimates the economic costs of friend-shoring using a quantitative model incorporating inter-country inter-industry linkages. The results suggest that friend-shoring may lead to real GDP losses of up to 4.6\% of global GDP. Thus, although friend-shoring may provide insurance against extreme disruptions and increase the security of supply of vital inputs, it would come at a significant cost.},
	author = {Beata S. Javorcik and Lucas Kitzmueller and Helena Schweiger and Muhammed A. Y{\i}ld{\i}r{\i}m}
}
@article {1660245,
	title = {Yet it Endures: The Persistence of Original Sin},
	year = {2022},
	abstract = {Notwithstanding announcements of progress, "international original sin" (the denomination of external debt in foreign currency) remains a persistent phenomenon in emerging markets. Although some middle-income countries have succeeded in developing markets in local-currency sovereign debt and attracting foreign investors, they continue to hedge their currency exposures through transactions with local pension funds and other resident investors. The result is to shift the locus of currency mismatches within emerging economies but not to eliminate them. Other countries have limited original sin by limiting external borrowing, passing up valuable investment opportunities in pursuit of stability. We document these trends, analyzing regional and global aggregates and national case studies. Our conclusion is that there remains a case for an international initiative to address currency risk in low- and middle-income economies so they can more fully exploit economic development opportunities.},
	author = {Barry Eichengreen and Hausmann, Ricardo and Ugo Panizza}
}
@article {1659174,
	title = {Diagnosing Drivers of Spatial Exclusion: Places, People, and Policies in South Africa{\textquoteright}s Former Homelands},
	year = {2022},
	abstract = {
	This report analyzes the economic legacy of spatial exclusion in South Africa, focusing on the long-term effects of the former Bantustan policy. Through quantitative analysis, the report explores the spatial dimension of economic activity in South Africa and specifically how this particular spatial institution has continued to shape current economic outcomes, despite past and present attempts to reverse the effect. The report also identifies areas for further research and potential intervention to enable more effective economic inclusion of the former homeland areas of the country.



	Related project: Accelerating Growth Through Inclusion in South Africa

},
	author = {Alexia Lochmann}
}
@article {1659173,
	title = {Getting Back on the Curve: South Africa{\textquoteright}s Manufacturing Challenge},
	year = {2022},
	abstract = {
	The report aims to inform the government{\textquoteright}s strategic approach towards manufacturing by analyzing the potential and limits for job creation within the sector. To meet that goal, we analyze the sector{\textquoteright}s main features and recent trajectory through the lens of global deindustrialization and South Africa{\textquoteright}s particular industrial dynamics. Secondly, we provide evidence of how, when, and why South Africa has deviated from the global deindustrialization trends. Lastly, we provide a policy framework to address the bottlenecks that are preventing South Africa from getting back on a better track of industrial performance.



	Related project: Accelerating Growth Through Inclusion in South Africa

},
	author = {Andres Fortunato}
}
@article {1659172,
	title = {Diagnosing South Africa{\textquoteright}s High Unemployment and Low Informality},
	year = {2022},
	abstract = {
	This report analyzes the causes and consequences of South Africa{\textquoteright}s high rates of unemployment and the unique nature of labor market exclusion in the country. It leverages a combination of new quantitative analysis using South African datasets and international datasets for benchmarking, together with synthesis of existing literature and case studies. The goal is to: (1) characterize the challenge of labor market exclusion in South Africa, (2) identify ways in which this is similar and different to other countries, (3) understand what drives the unique challenges of the labor market in South Africa, and (4) narrow down what policy areas are most important to address the underlying drivers. This report takes a diagnostic approach to understand the causes of South Africa{\textquoteright}s unique pattern of low informality.



	Related project: Accelerating Growth Through Inclusion in South Africa

},
	author = {Kishan Shah}
}
@article {1659170,
	title = {More (Inclusive) Entrepreneurship in South Africa: The Role of Franchising},
	year = {2022},
	abstract = {
	This paper explores franchising in South Africa, and its potential to help resolve the economy{\textquoteright}s challenges of low entrepreneurship and concentrated ownership. South Africa features a large franchising sector, with half a million formal workers and a large number of small businesses owners competing directly with vertically integrated chains. Traditional franchising may not have much space for further growth as a percentage of the economy, but it can be made more inclusive with innovations in franchise finance that broaden the base of potential franchisees, as well as enforcement of consumer protections to ensure franchisee-franchisor relationships are balanced. The expansion of the franchising model to less capital-intensive business concepts and serving lower-income consumers (micro-franchising) is one area with expanding growth potential for the country, while the application of the franchising model to public services and socially driven organizations is less promising. Finally, while the franchising model is only directly applicable to particular sectors, there are features of franchising and the capabilities built up around the franchising that could be applied to other priority areas of the economy, in particular to smallholder agriculture. The success of traditional franchising shows the power of a menu of standardized proposals and contracts in a marketplace with a range of franchisors (in this case, up- and downstream agriculture corporates) offering different opportunities to potential franchisees (in this case, smallholder farming communities), along with training and technology transfer at scale.



	Related project: Accelerating Growth Through Inclusion in South Africa

},
	author = {Klinger, Bailey}
}
@article {1657793,
	title = {Unraveling the Complexity: A User-centered Design Process for Narrative Visualization},
	journal = {The ACM CHI Conference on Human Factors in Computing Systems},
	year = {2022},
	address = {Hamburg, Germany},
	abstract = {
	In this case study, we introduce a user-centered design process for developing Metroverse, a narrative visualization platform that communicates urban economic composition and growth opportunities for cities. The primary challenge in making Metroverse stems from the complexity of the underlying research and data, both of which need to be effectively communicated to a wide range of end-users with different backgrounds. To unravel the complexity of the research, and to design the platform, we followed a user-centered design process. Our design process brought together researchers, designers, and various end-users, who collectively guided the design of the narrative visualization. Engaging end-users in the early phases of the project allowed us to identify the valuable insights in the data and subsequently design effective visualizations that convey those insights. We believe findings from our process can provide a template for similar projects that require translating complex research data and methodologies into user-friendly story structures.



	Watch Paper Presentation at CHI 2023: The ACM CHI Conference on Human Factors in Computing Systems

},
	author = {Nil Tuzcu and Annie White and Brendan Leonard and Steven Geofrey}
}
@webarticle {1656278,
	title = {Green Growth Opportunities},
	journal = {Finance \& Development },
	number = {December 2022},
	year = {2022},
	abstract = {
	Picture yourself as finance minister of a developing economy. An eager environmentalist tries to convince you of the moral imperative of cutting your country{\textquoteright}s greenhouse gas emissions. You soon become bored because you{\textquoteright}ve heard it all before, and your mind moves to more pressing matters. Your country is full of problems, from economic instability and inflation to challenges funding public services. Reducing emissions is not a priority.



	Even if you were to succeed, your impact on the climate would be minuscule. Countries as populous as Pakistan, Nigeria, and Egypt each represent less than 1 percent of the world{\textquoteleft}s emissions. Your country{\textquoteright}s emissions{\textemdash}even cumulative since the industrial revolution{\textemdash}are infinitesimally small. Eliminating them all would have no material impact on the climate: you would have incurred costs and forgone opportunities to deliver economic prosperity with little to show for it.



	Yet it would be a grave mistake not to consider climate change as an important aspect of your job. Change is sweeping across the global economy as countries recognize that the world must slash emissions to prevent a climate catastrophe. Decarbonization will reduce demand for dirty goods and services and increase demand for those that are cleaner and greener. The question is not what you can do to reduce your country{\textquoteright}s emissions but how you can supercharge your country{\textquoteright}s development by breaking into fast-growing industries that will help the world reduce its emissions and reach net zero.



	Your country{\textquoteleft}s history has been fundamentally shaped by the development of the few products it is able to make at home and sell abroad. Successful economies in east Asia and eastern Europe have sustained decades of high growth by upgrading their areas of comparative advantage, from garments to electronics to machinery and chemicals. They did not remain stuck in industries bequeathed by the past. If your country is to create jobs that pay higher wages, it will have to find new industries that can grow and export competitively even with higher wages.



	Pessimists say that opportunities may have been there in the past for countries like Japan, Korea, or China, but those paths to development are now closed. Decarbonization will, however, create new opportunities{\textemdash}especially for those that move fast. The paths that are opening up have not been trod by many predecessors. Some are still virgin. Decarbonization will require significant greenfield investments, and plants will have to find new places to locate. This could be a great opportunity for your country, but to assess it, you must understand the changing landscape.



	We do not know what technologies will power the low-carbon global economy or what materials and manufacturing capabilities they will need{\textemdash}nor what regulatory regimes the world will adopt, let alone what kind of cooperation or conflict will characterize relations between the largest emitters. These uncertainties will be resolved by those countries that play an active role and master the capabilities that will underpin their future comparative advantage. Keep in mind these six themes as you explore and exploit the opportunities and threats.

},
	url = {https://www.imf.org/en/Publications/fandd/issues/2022/12/green-growth-opportunities-ricardo-hausmann},
	author = {Hausmann, Ricardo}
}
@article {1656136,
	title = {Leaning-against-the-wind intervention and the {\textquotedblleft}carry-trade{\textquotedblright} view of the cost of reserves},
	year = {2022},
	abstract = {
	For a sample of emerging economies, we estimate the quasi-fiscal costs of sterilized foreign exchange interventions as the P\&amp;L of an inverse carry trade. We show that these costs can be substantial when intervention has a neo-mercantilist motive (preserving an undervalued currency) or a stabilization motive (appreciating the exchange rate as a nominal anchor) but are rather small when interventions follow a countercyclical, leaning-against-the-wind (LAW) pattern to contain exchange rate volatility. We document that under LAW, central banks outperform a constant size carry trade, as they additionally benefit from buying against cyclical deviations, and that the cost of reserves under the carry-trade view is generally lower than the one obtained from the credit-risk view (which equals the marginal cost to the country{\textasciiacute}s sovereign spread).

},
	author = {Eduardo Levy-Yeyati and Juan Francisco G{\'o}mez}
}
@article {1654954,
	title = {Overcoming Remoteness in the Peruvian Amazonia: A Growth Diagnostic of Loreto},
	year = {2022},
	abstract = {
	Is there a tradeoff between environmental sustainability and economic development? If there is a place where that question can be approximated, that is Loreto. Located on the western flank of the Amazon jungle, Loreto is Peru{\textquoteright}s largest state and the one with the lowest population density. Its capital, Iquitos, is the largest city without road access in the world. For three decades, the region{\textquoteright}s income and development has diverged from that of Peru and its other Amazonian peers by orders of magnitude. And yet, despite plummeting contributions from natural resources {\textendash} that predominate in the policy discussion in and on the state {\textendash} Loreto has developed a more complex productive ecosystem than one would expect, given its geographical isolation. As a result, it has a stock of productive capabilities that can be redeployed in economic activities with higher value-added, able to sustain higher wages and better living standards. 



	We deployed a thorough Growth Diagnostic of Loreto to identify the most binding constraints preventing private investment and development in sustainable economic activities. In the process, we relied on domestic databases available to the public in Peru and international datasets, combining and validating our analytical insights with extensive field visits to the Peruvian Amazonia and lengthy interviews with policymakers, private businesses, and academia. Improving fluvial connectivity, developing the capacity to sort out coordination failures associated with the process of self-discovery, and substituting oil for solar energy, are the three policy goals that would deliver the largest bang for the reform buck. The latter presents an opportunity for environmental organizations {\textendash} subsidizing solar {\textendash} to move away from their status quo of preventing bad things from happening, to a more constructive one that entails enabling good things and sustainable industries to happen. 



	Project page:\&nbsp;Economic Growth and Structural Transformation in\&nbsp;Loreto, Peru

},
	author = {Hausmann, Ricardo and Miguel A. Santos and Frank Muci and Tudela Pye, Jorge and Ana Grisanti and Lu, Jessie}
}
@article {1654375,
	title = {On the Design of Effective Sanctions: The Case of Bans on Exports to Russia},
	year = {2022},
	abstract = {
	We analyze the effects of bans on exports at the level of 5,000 products and show how our results can inform economic sanctions against Russia after its invasion of Ukraine. We begin with characterizing export restrictions imposed by the EU and the US until mid May 2022. We then propose a theoretically-grounded criterion for targeting export bans at the 6-digit HS level. Our results show that the cost to Russia are highly convex in the market share of the sanctioning parties, i.e., there are large benefits from coordinating export bans among a broad coalition of countries. Applying our results to Russia, we find that sanctions imposed by the EU and the US are not systematically related to our arguments once we condition on Russia{\textquoteright}s total imports of a product from participating countries. Quantitative evaluations of the export bans show (i) that they are very effective with the welfare loss typically \~{}100 times larger for Russia than for the sanctioners. (ii) Improved coordination of the sanctions and targeting sanctions based on our criterion allows to increase the costs to Russia by about 60\% with little to no extra cost to the sanctioners. (iii) There is scope for increasing the cost to Russia further by expanding the set of sanctioned products.



	Wall Street Journal: Sanctions Against Russia Could Be Better, These Harvard Economists Say



	Video summary: How can sanctions against Russia be more effective?

},
	author = {Hausmann, Ricardo and Schetter, Ulrich and Muhammed A. Yildirim}
}
@article {1652892,
	title = {A Measure of Countries{\textquoteright} Distance to Frontier Based on Comparative Advantage},
	year = {2022},
	abstract = {This paper presents a structural ranking of countries by their distance to frontier. The ranking is based on comparative advantage. Hence, it reveals information on the productive capabilities of countries that is fundamentally different from GDP per capita. The ranking is centered on the assumption that countries{\textquoteright} capabilities across products are similar to those of other countries with comparable distance to frontier. It can be micro-founded using standard trade models. The estimation strategy provides a general, non-parametric approach to uncovering a log-supermodular structure from the data, and I use it to also derive a structural ranking of products by their complexity. The underlying theory provides a flexible micro-foundation for the Economic Complexity Index (Hidalgo and Hausmann, 2009).},
	author = {Schetter, Ulrich}
}
@article {1652891,
	title = {A Simple Theory of Economic Development at the Extensive Industry Margin},
	year = {2022},
	abstract = {We revisit the well-known fact that richer countries tend to produce a larger variety of goods and analyze economic development through (export) diversifcation. We show that countries are more likely to enter {\textquoteleft}nearby{\textquoteright} industries, i.e., industries that require fewer new occupations. To rationalize this finding, we develop a small open economy (SOE) model of economic development at the extensive industry margin. In our model, industries differ in their input requirements of non-tradeable occupations or tasks. The SOE grows if profit maximizing frms decide to enter new, more advanced industries, which requires training workers in all occupations that are new to the economy. As a consequence, the SOE is more likely to enter nearby industries in line with our motivating fact. We provide indirect evidence in support of our main mechanism and then discuss implications: We show that there may be multiple equilibria along the development path, with some equilibria leading on a pathway to prosperity while others resulting in an income trap, and discuss implications for industrial policy. We finally show that the rise of China has a non-monotonic effect on the growth prospects of other developing countries, and provide suggestive evidence for this theoretical prediction.},
	author = {Dario Diodato and Hausmann, Ricardo and Schetter, Ulrich}
}
@article {1646725,
	title = {Global Supply Chain Pressures, International Trade, and Inflation},
	year = {2022},
	abstract = {
	We study the impact of the Covid-19 pandemic on Euro Area inflation and how it compares to the experiences of other countries, such as the United States, over the two-year period 2020-21. Our model-based calibration exercises deliver four key results: 1) Compositional effects {\textendash} the switch from services to goods consumption {\textendash} are amplified through global input-output linkages, affecting both trade and inflation. 2) Inflation can be higher under sector-specific labor shortages relative to a scenario with no such supply shocks. 3) Foreign shocks and global supply chain bottlenecks played an outsized role relative to domestic aggregate demand shocks in explaining Euro Area inflation over 2020-21. 4) International trade did not respond to changes in GDP as strongly as it did during the 2008-09 crisis despite strong demand for goods. These lower trade elasticities in part reflect supply chain bottlenecks. These four results imply that policies aimed at stimulating aggregate demand would not have produced as high an inflation as the one observed in the data without the negative sectoral supply shocks.

},
	author = {Julian di Giovanni and Sebnem Kalemli-{\"O}zcan and Alvaro Silva and Muhammed A. Yildirim}
}
@article {1642519,
	title = {Endowment Structure, property rights and reforms of large state-owned enterprises (SOEs) in China: Past, present and future},
	journal = {Structural Change and Economic Dynamics},
	year = {2022},
	abstract = {Based on the criteria of the factor endowment structure of state-owned enterprise (SOE) sectors in China between 1980 and 2018, this paper rationalizes the classified reforming of China{\textquoteright}s state sectors by constructing a Nash bargaining model to capture the dynamics of ownership restructuring, and the reduction process of policy burden on SOEs. We reveal that the interplay between policy burden bared by SOEs and the ownership restructuring process largely depends upon their factor intensities since the reform period in the 1980s. Our model identifies two Ownership Reform Irrelevance Points (ORIP), which serve as the benchmark for the dynamics of the ownership restructuring process of China{\textquoteright}s large SOEs, which saw them move from {\textquoteleft}mixed-ownership{\textquoteright} to {\textquoteleft}privatization{\textquoteright}. ORIPs demonstrate the need for a reduction in social policy burdens with regards to the state sector{\textquoteright}s comparative advantage of factor endowment structure through SOE ownership restructuring. This study theoretically analyzes existing literatures on the classified reforms of China{\textquoteright}s state sectors from 1978 to 2018. This study is the first to base such an analysis on the criteria of factor endowment structure focusing on the connection between the policy burdens bared by SOEs and their ownership restructuring process.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S0954349X2200073X$\#$!},
	author = {Xiaojie Liu and Shen, Jim Huangnan and Kent Deng}
}
@article {1637500,
	title = {Cutting Putin{\textquoteright}s Energy Rent: {\textquoteleft}Smart Sanctioning{\textquoteright} Russian Oil and Gas},
	year = {2022},
	abstract = {
	Following the Russian aggression against Ukraine, major sanctions have been imposed by Western countries, most notably with the aim of limiting Russia{\textquoteright}s access to hard international currency. However, Russia remains the world{\textquoteright}s first exporter of oil and gas, and at current energy prices this provides large hard currency revenues. As the war continues, European governments are under increased pressure to scale-up their energy sanctions, following measures taken by the United States, the United Kingdom, Canada and Australia. This piece argues that given the inelasticity of Russia{\textquoteright}s oil and gas supply, for Europe the most efficient way to sanction Russian energy would not be an embargo, but the introduction of an import tariff that can be used flexibly to control the degree of economic pressure on Russia.



	E-Letter in Science: How to weaken Russian oil and gas strength

},
	author = {Hausmann, Ricardo and Agata {\L}oskot-Strachota and Axel Ockenfels and Schetter, Ulrich and Simone Tagliapietra and Guntram Wolff and Georg Zachmann}
}
@article {1636941,
	title = {What Will It Take for Jordan to Grow?},
	year = {2022},
	abstract = {This report aims to answer the critical but difficult question: "What will it take for Jordan to grow?" Though Jordan has numerous active growth and reform strategies in place, they do not clearly answer this fundamental question. The Jordanian economy has experienced more than a decade of slow growth. Per capita income today is lower than it was prior to the Global Financial Crisis as Jordan has experienced a refugee-driven population increase. Jordan{\textquoteright}s comparative advantages have narrowed over time as external shocks and responses to these shocks have changed the productive structure of Jordan{\textquoteright}s economy. This was a problem well before the country faced the COVID-19 pandemic. The Jordanian economy has lost productivity, market access, and, critically, the ability to afford high levels of imports as a share of GDP. Significant efforts toward fiscal consolidation have further constrained aggregate demand, which has slowed non-tradable activity and the ability of the economy to create jobs. Labor market outcomes have worsened over time and are especially bad for women and youth. Looking ahead, this report identifies clear and significant opportunities for Jordan to strengthen new engines of export growth that would enable better overall job creation and resilience, even amidst the continued unpredictability of the pandemic. This report argues that there is need for a paradigm shift in Jordan{\textquoteright}s growth strategy to focus more direct attention and resources on activating {\textquotedblleft}agents of change{\textquotedblright} to accelerate the emergence of key growth opportunities, and that there are novel roles that donor countries can play in support of this.},
	author = {Tim O{\textquoteright}Brien and Thảo-Nguy{\^e}n B{\`u}i and Ermal Frasheri and Fernando Garcia and Eric Protzer and Ricardo Villasmil and Hausmann, Ricardo}
}
@article {1635483,
	title = {The Economic Complexity of Namibia: A Roadmap for Productive Diversification },
	year = {2022},
	abstract = {After a large growth acceleration within the context of the commodity super cycle (2000-2015), Namibia has been grappling with three interrelated challenges: economic growth, fiscal sustainability, and inclusion. Accelerating technological progress and enhancing Namibia{\textquoteright}s knowhow agglomeration is crucial to the process of fostering new engines of growth that will deliver progress across the three targets. Using net exports data at the four-digit level, we estimate the economic complexity of Namibia {\textendash} a measure of knowhow agglomeration {\textendash} vis-{\`a}-vis its peers. Our results suggest that Namibia{\textquoteright}s economy is relatively less complex and attractive opportunities to diversify tend to be more distant. Based on economic complexity metrics, we define a place-specific path for productive diversification, identifying industries with high potential and providing inputs {\textendash} related to their feasibility and attractiveness in Namibia {\textendash} for further prioritization. Namibia{\textquoteright}s path to structural transformation will likely be steeper than for most peers, calling for a more active policy stance geared towards progressive accumulation of productive capacities, well-targeted {\textquotedblleft}long jumps{\textquotedblright}, and strengthening state capacity to sort out market failures associated with the process of self-discovery.},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Douglas Barrios and Nikita Taniparti and Tudela Pye, Jorge and Lu, Jessie}
}
@webarticle {1636431,
	title = {The Economic Geography of the War in Ukraine},
	journal = {Complexity Science Hub Vienna},
	year = {2022},
	abstract = {
	The war in Ukraine has been waging for a month now, not only causing human suffering on a massive scale, but also sending economic tremors that are felt far beyond the country{\textquoteright}s borders. Since the collapse of the Soviet Union, Ukraine{\textquoteright}s economy has been pulled between its strong historical ties with the Russian economy and the opportunities in forging new ties with the European Union (EU). With the help of Metroverse, an online tool for analyzing the local economies of over a thousand cities worldwide, and of the data that power this tool, we analyze the evolving economic relations between Ukraine, Russia and the West and weigh the consequences of their disruption.



	Explore:\&nbsp;The Economic Geography of the War in Ukraine\&nbsp;



	Related reading:Media ReleaseBloomberg Opinion:\&nbsp;Markets Need to Lose the {\textquoteleft}Peace in Our Time{\textquoteright} Reflex

},
	author = {Neffke, Frank and Matte Hartog and Li, Yang}
}
@article {1668357,
	title = {Migration and Knowledge Diffusion: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia},
	journal = {The Review of Economics and Statistics},
	year = {2022},
	abstract = {During the early 1990s Germany offered temporary protection to 700,000 Yugoslavian refugees fleeing war. By 2000, many had been repatriated. We exploit this natural experiment to investigate the role of returning migrants in boosting export performance upon their return. Using confidential German administrative data we find that industries with 10\% more returning refugees exhibit larger exports between the pre- and post-war periods by 1 to 1.6\%. We use exogenous allocation rules for asylum seekers within Germany as an instrument to deal with endogeneity concerns. We show evidence pointing to productivity shifts as the main mechanism behind our results. Consistently, we find our results are driven by refugees in occupations more apt to transfer knowledge, technologies and best-practices.},
	url = {https://direct.mit.edu/rest/article-abstract/doi/10.1162/rest_a_01165/109253/Migration-and-Knowledge-Diffusion-The-Effect-of/},
	author = {Dany Bahar and Hauptmann, Andreas and {\"O}zg{\"u}zel, Cem and Rapoport, Hillel}
}
@article {1631365,
	title = {Horrible trade-offs in a pandemic: Poverty, fiscal space, policy, and welfare},
	journal = {World Development},
	volume = {153},
	year = {2022},
	abstract = {We analyze how poverty and a country{\textquoteright}s fiscal space impact policy and welfare in times of a pandemic. We introduce a subsistence level of consumption into a tractable heterogeneous agent framework, and use this framework to characterize optimal joint policies of a lockdown and transfer payments. In our model, a more stringent lockdown helps fighting the pandemic, but it also deepens the recession, which implies that poorer parts of society find it harder to subsist. This reduces their compliance with the lockdown, and may cause deprivation of the very poor, giving rise to an excruciating trade-off between saving lives from the pandemic and from deprivation. Transfer payments help mitigate this trade-off. We show that, ceteris paribus, the optimal lockdown is stricter in richer countries and the aggregate death burden and welfare losses smaller. We then consider a government borrowing constraint and show that limited fiscal space lowers the optimal lockdown and welfare, and increases the aggregate death burden during the pandemic. This is particularly true in societies where a larger fraction of the population is in poverty. We discuss evidence from the literature and provide reduced-form regressions that support the relevance of our main mechanisms. We finally discuss distributional consequences and the political economy of fighting a pandemic.},
	url = {https://www.sciencedirect.com/science/article/pii/S0305750X22000092},
	author = {Hausmann, Ricardo and Schetter, Ulrich}
}
@article {1630442,
	title = {A Growth Diagnostic of Namibia},
	year = {2022},
	abstract = {
	In the thirty years that have passed since independence, Namibia has been characterized by its over-reliance on its mineral resource wealth, procyclicality of macroeconomic policy, and large income disparities. After an initial decade marked by nation building and slow growth (1990-2000), the Namibian economy embarked on a rapid growth acceleration that lasted 15 years, within the context of the global commodity super cycle. Favorable terms of trade translated into an investment and export boom in the mining sector, which was amplified to the non-tradable sector of the economy through a significant public expenditure spree from 2008 onwards. Between 2000 and 2015 income and consumption per capita expanded at an average annual rate of 3.1\%, poverty rates halved, and access to essential public goods expanded rapidly. As the commodity super cycle came to an end and the fiscal space was exhausted, Namibia experienced a significant reversal. Investment and exports plummeted, bringing GDP per capita to contract by 2.1\% between 2015-2019. With debt-to-GDP ratios 3.5 times higher than those in 2008, the country embarked on a fiscal consolidation effort which brought the primary fiscal deficit from 6.8\% of GDP in 2016 to 0.6\% by March 2020. Along all these years, inequality has been endemic and is reflected across demographic characteristics and employment status. At present, a large majority of Namibians are unable to access well-paying formal sector jobs, as these tend to be particularly scarce outside of the public sector. Looking forward, the road to sustained inclusive growth and broad prosperity entails expanding the formal private labor market by diversifying the Namibian economy, while at the same time removing the barriers preventing Namibians from accessing these opportunities inherited from the apartheid.



	The Growth Lab at Harvard University has partnered with the Government of Namibia to develop research that results in inputs for a policy strategy aimed at promoting sustainable and inclusive growth. The Growth Diagnostic is a cornerstone of the ongoing research engagement and is meant at providing an overview of the most binding constraints to Namibia{\textquoteright}s economic performance and outlining how these relate in a systemic way to the concurrent challenges of growth, fiscal sustainability, and inclusion.\&nbsp;



	Inclusive growth in Namibia is currently facing a set of self-reinforcing constraints. The country is missing both the productive capabilities (words) and required skills (letters) to sustain longer periods of growth. The low degree of knowhow agglomeration that can be inferred from its current productive structure {\textendash} as gathered by the Economic Complexity Index (ECI) {\textendash} leaves very little opportunities of diversification that can be pursued by redeploying existing skills (low connectedness). Our analysis reveals that Namibia has been able to diversify differentially more that most of its peers given its current set of productive capabilities, but the problem is that the set of adjacent opportunities are neither complex nor plenty. As the marginal cost of acquiring new capabilities tend to be high, the government needs to take a more active role in sorting coordination and information failures associated to the process of productive diversification and self-discovery.



	Relatedly, Namibia{\textquoteright}s growth prospects are also constrained by a shortage of specialized skills. Three empirical facts derived from econometric analysis of Labor Force Survey statistics point in this direction. First, certain skill-intensive industries and occupations exhibit differentially higher wage premiums. Second, highly educated, and experienced workers face the lowest unemployment rates in\&nbsp;the economy, by a wide margin. Third, skill-intensive industries tend to grow less than the rest of the sectors in the economy.



	The demand for high skilled foreign workers is high {\textendash} as proxied by their wage premium. This skill shortage may be constraining not only existing industries but also the development of new engines of growth, limiting access to opportunity for Namibians across all skill levels. Missing skills at the top of the spectrum tends to depress job creation at the bottom. These two constraints {\textendash} low knowhow agglomeration with poor connectedness and skills shortages {\textendash} seem to reinforce each other. Using the Scrabble metaphor, Namibia is missing the letters (productive capabilities) and the entire words (more complex products).



	Knowhow, by definition, resides in brains of people and it{\textquoteright}s embedded in the goods and services a country produces. A broad knowhow-enhancing strategy aimed at targeting efficiency-seeking foreign direct investment (FDI, firms bringing entire new words to Namibia), and migration regulation policies (specific letters needed by more complex industries) is required to ease the binding constraints. Investment promotion efforts shall be targeted to {\textquoteleft}efficiency-seeking{\textquoteright} firms, which tend to take advantage of a competitive factor in the country (efficient labor force, access to international financial markets, infrastructure, etc.) to produce and export to foreign markets. This type of FDI is essentially different from the {\textquoteleft}natural resource-seeking{\textquoteright} investments that have characterized the Namibian economy and pose additional challenges. At the same time, the country would benefit from a more open immigration policy targeted towards high-skill workers. The evidence we have gathered suggests that high-skill foreigners tend to function as complements {\textendash} rather than substitutes {\textendash} to Namibian workers: industries with larger shares of high-skill workers tended to pay lower skill workers significantly higher wages. Easing the existing restrictions t labor flows and incentivizing inflows of high-skill foreigners will likely trickle down into the rest of the labor force and enhance the knowhow agglomeration of the Namibian productive ecosystem.



	A challenge to productive diversification broadly, and attracting foreign investment and talent more particularly, might be policy uncertainty. Existing levels of policy uncertainty {\textendash} instability or absence of the adequate regulating environment, worries about potential issues for property rights, inexperience with respect to the efficiency of domestic courts {\textendash} in Namibia might not be enough to deter investments in resource-based industries, but might be an important hurdle for other type of industries, especially the ones that have a choice regarding their international location. To attract these investments, a simpler and more transparent investment environment, coped a more comprehensive set of international investment treaties, might be necessary.



	The report is organized in six sections, including this Executive Summary. Section 2 outlines the Growth Diagnostic methodology. Section 3 provides a summary of the growth trajectory of Namibia and the challenges facing inclusive growth. Section 4 covers the main takeaways of the analysis conducted in each of the branches of the Growth Diagnostics Tree, including those related to access to finance, low social returns, government failures and agglomeration of collective knowhow. Section 5 concludes by highlighting potential binding and providing inputs for a collaborative exploration of why these issues have persisted and become an equilibrium.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Douglas Barrios and Nikita Taniparti and Tudela Pye, Jorge and Jose Francisco Muci and Lu, Jessie}
}
@article {1628529,
	title = {Macroeconomic risks after a decade of microeconomic turbulence: South Africa 2007-2020},
	year = {2022},
	abstract = {This study analyses the performance of macroeconomic policy in South Africa in 2007{\textendash}2020 and outlines challenges for policy in the coming decade. After remarkable economic growth in 1997{\textendash}07, South Africa{\textquoteright}s progress slowed dramatically in 2009 with the global financial crisis. Real GDP growth decelerated more than in other emerging markets and mineral exporting peers and never recovered pre-crisis levels. In addition, the budget deficit that provided counter-cyclical support to the economy was never reigned in, leading to a rapidly rising public debt load. The study assesses three accounts of South Africa{\textquoteright}s post-GFC growth and fiscal slump: (1) an external story; (2) a macro story; and (3) a microeconomic story. Evidence of strong linkages between micro- and political developments and growth performance is provided.},
	author = {Hausmann, Ricardo and Sturzenegger, Federico and Goldstein, Patricio and Frank Muci and Douglas Barrios}
}
@article {1627289,
	title = {How production networks amplify economic growth},
	journal = {Proceedings of the National Academy of Sciences of the United States of America (PNAS)},
	volume = {119},
	number = {1},
	year = {2022},
	abstract = {
	Technological improvement is the most important cause of long-term economic growth. In standard growth models, technology is treated in the aggregate, but an economy can also be viewed as a network in which producers buy goods, convert them to new goods, and sell the production to households or other producers. We develop predictions for how this network amplifies the effects of technological improvements as they propagate along chains of production, showing that longer production chains for an industry bias it toward faster price reduction and that longer production chains for a country bias it toward faster growth. These predictions are in good agreement with data from the World Input Output Database and improve with the passage of time. The results show that production chains play a major role in shaping the long-term evolution of prices, output growth, and structural change.



	Media release:\&nbsp;New study finds economic progress is aided by longer supply chains and deeper networks

},
	url = {https://doi.org/10.1073/pnas.2106031118},
	author = {McNerney, James and Charles Savoie and Francesco Caravelli and Vasco M. Carvalho and J. Doyne Farmer}
}
@book {1627138,
	title = {Reclaiming Populism: How Economic Fairness Can Win Back Disenchanted Voters},
	year = {2022},
	pages = {180},
	publisher = {Polity Books},
	organization = {Polity Books},
	abstract = {
	Populist upheavals like Trump, Brexit, and the Gilets Jaunes happen when the system really is rigged. Citizens the world over are angry not due to income inequality or immigration, but economic unfairness: that opportunity is not equal and reward is not according to contribution.



	This forensic book draws on original research, cited by the UN and IMF, to demonstrate that illiberal populism strikes hardest when success is influenced by family origins rather than talent and effort. Protzer and Summerville propose a framework of policy inputs that instead support high social mobility, and apply it to diagnose the differing reasons behind economic unfairness in the US, UK, Italy, and France. By striving for a fair, socially-mobile economy, they argue, it is possible to craft a politics that reclaims the reasonable grievances behind populism.



	Reclaiming Populism is a must-read for policymakers, scholars, and citizens who want to bring disenchanted populist voters back into the fold of liberal democracy.



	Eric Protzer\&nbsp;is a Research Fellow at Harvard University{\textquoteright}s Growth Lab.Paul Summerville\&nbsp;is an Adjunct Professor at the University of Victoria{\textquoteright}s Gustavson School of Business.

},
	url = {https://www.politybooks.com/bookdetail?book_slug=reclaiming-populism-how-economic-fairness-can-win-back-disenchanted-voters--9781509548118},
	author = {Eric Protzer and Paul Summerville}
}
@article {1627018,
	title = {The new paradigm of economic complexity},
	journal = {Research Policy },
	volume = {51},
	number = {3},
	year = {2022},
	abstract = {Economic complexity offers a potentially powerful paradigm to understand key societal issues and challenges of our time. The underlying idea is that growth, development, technological change, income inequality, spatial disparities, and resilience are the visible outcomes of hidden systemic interactions. The study of economic complexity seeks to understand the structure of these interactions and how they shape various socioeconomic processes. This emerging field relies heavily on big data and machine learning techniques. This brief introduction to economic complexity has three aims. The first is to summarize key theoretical foundations and principles of economic complexity. The second is to briefly review the tools and metrics developed in the economic complexity literature that exploit information encoded in the structure of the economy to find new empirical patterns. The final aim is to highlight the insights from economic complexity to improve prediction and political decision-making. Institutions including the World Bank, the European Commission, the World Economic Forum, the OECD, and a range of national and regional organizations have begun to embrace the principles of economic complexity and its analytical framework. We discuss policy implications of this field, in particular the usefulness of building recommendation systems for major public investment decisions in a complex world.},
	url = {https://www.sciencedirect.com/science/article/pii/S0048733321002420},
	author = {Pierre-Alexandre Balland and Tom Broekel and Dario Diodato and Elisa Giuliani and Hausmann, Ricardo and Neave O{\textquoteright}Clery and David Rigby}
}
@article {1673696,
	title = {Diagnosing Human Capital as a Binding Constraint to Growth: Tests, Symptoms and Prescriptions},
	year = {2021},
	abstract = {The empirical literature on the contributions of human capital investments to economic growth shows mixed results. While evidence from OECD countries demonstrates that human capital accumulation is associated with growth accelerations, the substantial efforts of developing countries to improve access to and quality of education, as a means for skill accumulation, did not translate into higher income per capita. In this paper, we propose a framework, building on the principles of Growth Diagnostics (Hausmann, Rodrik and Velasco, 2008), to enable practitioners to determine whether human capital investments are a priority for a country{\textquoteright}s growth strategy. We then discuss and exemplify different tests to diagnose human capital in a place, drawing on the Harvard Growth Lab{\textquoteright}s experience in different development context, and discuss various policy options to address skill shortages.},
	author = {Miguel Angel Santos and Farah Hani}
}
@inbook {1627035,
	title = {Lack of progress cannot be solved by a redistributive strategy},
	booktitle = {Latin America: The Post-Pandemic Decade},
	year = {2021},
	pages = {75-87},
	publisher = {Centre for Economic Policy Research Press},
	organization = {Centre for Economic Policy Research Press},
	abstract = {
	Section II, "Policies for sustainable growth", includes dialogues with Mauricio C{\'a}rdenas, Marcela Eslava, Ricardo Hausmann, Rodrigo Vald{\'e}s and Alejandro Werner.



	Returning to sustained growth is a key challenge for Latin American economies. This section discusses the causes of the dismal performance of Latin America and the post-Covid policies needed to change this reality. Contributors in this section suggest that the region will witness important rebounds during 2021-2022. The recovery that started in the second half of 2020 gained strength as the economies gradually reopened following rising vaccination rates. Some countries will be reaching 2019 GDP levels in 2021; others, in 2022. However, the concern is that these recoveries will be short-lived. And if global financial conditions become less supportive, the next decade could be quite demanding.



	In the medium term, Latin America is expected to exhibit significant scars from Covid, as growth is expected to be permanently below the levels anticipated before the pandemic. But the severe problem of the limited growth potential of the region predates the crisis. And, even for countries that grew more than the Latin American average, the post-pandemic future looks bleaker. The contributors highlight several reasons behind this modest performance. The first and the most commonly cited is macroeconomic mismanagement (high inflation, financial fragility leading to balance-of-payments crises). However, even countries that successfully achieved macroeconomic stabilisation failed to achieve sustained growth. It follows that the forces behind low growth are more complex: the business environment has been feeble; there is a lack of appropriate governance; the natural resource curse applies in some countries, with weak institutions and short-sighted governments with the perception that there is no need for further effort; there are social, political and institutional factors that complicate the building of a consensus around an economic policy framework that sets the foundations for medium-term inclusive growth. In addition, relatively slow technological progress widens the region{\textquoteright}s technological gap with the advanced world. Moreover, while the lack of social progress cannot be solved merely with a redistributive strategy, the region{\textquoteright}s regressive income distribution and structural poverty are detrimental to growth through their impact on the expected sustainability of economic regimes, as well as, on occasions, pure expropriation risk arising from social tensions. In the meantime, local talent remains undiscovered and undernourished for lack of opportunities.



	Most doubt the possibility of implementing successful industrial policies in the region, sceptical that Latin American policymakers could efficiently substitute for the right market signals and incentives, and propose that the development strategy should be largely based on horizontal policies. But some see a role for the state to address the many unexploited externalities, arguing that public goods do not possess the market{\textquoteright}s invisible hand to signal where the information about what is needed, the incentives to provide these public goods, and the allocation of resources.

},
	url = {https://voxeu.org/content/latin-america-post-pandemic-decade-conversations-14-latin-american-economists},
	author = {Hausmann, Ricardo},
	editor = {Ilan Goldfajn and Eduardo Levy Yeyati}
}
@article {1627011,
	title = {Bridging the short-term and long-term dynamics of economic structural change},
	year = {2021},
	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{\textquoteright}s long-term development as well. We explore these implications using a dynamical network model of an economy{\textquoteright}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{\textquoteright}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.},
	author = {McNerney, James and Li, Yang and Andres Gomez-Lievano and Neffke, Frank}
}
@article {1624894,
	title = {New Avenues for Colombia{\textquoteright}s Internationalization: Trade in Tasks},
	year = {2021},
	abstract = {
	One of the consequences of COVID-19 is the recognition that many tasks can be done from home. But anything that can done remotely, can be done from abroad.



	Given large salary differences between white collar workers across countries, it would make sense for value chains to try to exploit them. This opens an opportunity for Colombia to further promote its integration into the world global value chains and access new markets.



	This paper explores the possibility of exporting teleworkable services from Colombia. The goal is to provide useful information to guide strategic interventions to speed-up the development of such service industries in Colombia.



	We first introduce a definition of teleworkable jobs and describe its occupations and industries along different dimensions. We show that there are many teleworkable jobs in the US, representing a significant share of industry costs. Then, we show that many industries intensive in teleworkable jobs are currently traded across borders. To quantify Colombia{\textquoteright}s advantage providing teleworkable services, we study the cost structure of industries and quantify the potential savings in overall costs if the tasks were performed by Colombians. Given Colombia{\textquoteright}s current presence and the density around teleworkable industries we can calculate a proxy of the latent advantage in teleworkable services. We propose an index that summarize these dimensions and rank the potential gains from including telework from Colombia in an industry. We end with a set of policy recommendations to move this agenda forward.

},
	author = {Hausmann, Ricardo and Sebastian Bustos}
}
@article {1623029,
	title = {Diagnosing Human Capital as a Binding Constraint to Growth: Tests, Symptoms and Prescriptions},
	journal = {Cambridge University Press: Elements in the Economics of Emerging Markets},
	year = {2021},
	publisher = {Cambridge University Press},
	address = {Cambridge},
	abstract = {
	The empirical literature on the contributions of human capital investments to economic growth shows mixed results. While evidence from OECD countries demonstrates that human capital accumulation is associated with growth accelerations, the substantial efforts of developing countries to improve access to and quality of education, as a means for skill accumulation, did not translate into higher income per capita. In this Element, we propose a framework, building on the principles of {\textquoteright}growth diagnostics{\textquoteright}, to enable practitioners to determine whether human capital investments are a priority for a country{\textquoteright}s growth strategy. We then discuss and exemplify different tests to diagnose human capital in a place, drawing on the Harvard Growth Lab{\textquoteright}s experience in different development context, and discuss various policy options to address skill shortages.



	---------------------------------------------



	Cambridge Elements are a new concept in academic publishing and scholarly communication, combining the best features of books and journals. They consist of original, concise, authoritative, and peer-reviewed scholarly and scientific research, organised into focused series edited by leading scholars, and provide comprehensive coverage of the key topics in disciplines spanning the arts and sciences.



	Regularly updated and conceived from the start for a digital environment, they provide a dynamic reference resource for graduate students, researchers, and practitioners.



	View book on Amazon

},
	url = {https://www.cambridge.org/core/elements/diagnosing-human-capital-as-a-binding-constraint-to-growth/B4A99173D78EDA2D7EFCF4D20B156D15},
	author = {Miguel Angel Santos and Farah Hani}
}
@article {1613261,
	title = {Estimating the drivers of urban economic complexity and their connection to economic performance},
	journal = {Royal Society Open Science},
	volume = {8},
	number = {9},
	year = {2021},
	abstract = {Estimating the capabilities, or inputs of production, that drive and constrain the economic development of urban areas has remained a challenging goal. We posit that capabilities are instantiated in the complexity and sophistication of urban activities, the know-how of individual workers, and the city-wide collective know-how. We derive a model that indicates how the value of these three quantities can be inferred from the probability that an individual in a city is employed in a given urban activity. We illustrate how to estimate empirically these variables using data on employment across industries and metropolitan statistical areas in the USA. We then show how the functional form of the probability function derived from our theory is statistically superior when compared with competing alternative models, and that it explains well-known results in the urban scaling and economic complexity literature. Finally, we show how the quantities are associated with metrics of economic performance, suggesting our theory can provide testable implications for why some cities are more prosperous than others.},
	url = {https://royalsocietypublishing.org/doi/10.1098/rsos.210670},
	author = {Andres Gomez-Lievano and Oscar Patterson-Lomba}
}
@website {1610474,
	title = {Colombian Diaspora Survey Results Dashboard},
	year = {2021},
	abstract = {As part of the "Role of the Diaspora in the Internationalization of the Colombian Economy" project, Growth Lab researchers surveyed 11,500 members of the Colombian diaspora, located in well over 100 countries. They studied the migration journeys, the diaspora{\textquoteright}s attachment to Colombia, the level of diaspora engagement and interest in engaging, the intentions to return back home, the interest in diaspora government policy, and the overall sentiment of the diaspora towards Colombia.},
	url = {https://growthlab.shinyapps.io/ColombianDiaspora/},
	author = {Ana Grisanti and Andre Assumpcao and Muhaj, Daniela and Lu, Jessie and Ljubica Nedelkoska}
}
@webarticle {1606278,
	title = {What Economic Complexity Theory Can Tell Us about the EU{\textquoteright}s Pandemic Recovery and Resilience Plans},
	journal = {Growth Lab / European Politics and Policy},
	year = {2021},
	abstract = {
	A little over a year ago, the EU{\textquoteright}s political leaders agreed on an unprecedented fiscal package {\textendash} dubbed {\textquoteleft}Next Generation EU{\textquoteright} {\textendash} to aid Europe{\textquoteright}s recovery from the pandemic. Ricardo Hausmann, Miguel Angel Santos, Corrado Macchiarelli\&nbsp;and Renato Giacon write that economic complexity theories can provide a useful tool for evaluating whether the recovery and resilience plans submitted by EU member states to receive this funding are well-designed. Assessing the case of Greece, they argue that investments should be tailored toward export-oriented sectors and aim to help close the country{\textquoteright}s product complexity gap with other EU states.\&nbsp;

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Corrado Macchiarelli and Renato Giacon}
}
@article {1601840,
	title = {The Quest for Increased Saudization: Labor Market Outcomes and the Shadow Price of Workforce Nationalization Policies},
	year = {2021},
	abstract = {Few countries have embraced active labor market policies to the same extent as Saudi Arabia. In the aftermath of the Arab Spring, the imperative of increasing Saudi employment became paramount. The country faced one of the highest youth unemployment rates in the world while over 80 percent of its private sector consisted of foreign labor. Since 2011, a wave of employment nationalization efforts has been mainly implemented through a comprehensive and strictly enforced industry and firm specific quota system known as Nitaqat. This paper assesses the employment gains as well as the costs and unintended consequences resulting from Nitaqat and related policies between 2011 and 2017. We find that while job nationalization policies generated significant initial gains in Saudi employment and labor force participation, the effects were heterogeneous across workers, firms and sectors. Moreover, our analysis suggests that the resulting unintended consequences far outweighed the benefits over time generating a less cost-effective and productivity inhibiting labor market composition.\&nbsp;},
	author = {Michael Lopesciolo and Muhaj, Daniela and Pan, Carolina}
}
@article {1597287,
	title = {Understanding Saudi Private Sector Employment and Unemployment},
	year = {2021},
	abstract = {
	This paper analyzes the changes in Saudi employment and unemployment between 2009 and 2018 and argues that a supply-demand skill mismatch exacerbated by insufficient job creation, and prevalent Saudi preferences and beliefs about employment underpin the high unemployment problem that coexists with low Saudi employment in the private sector in the country.

},
	author = {Farah Hani and Michael Lopesciolo}
}
@article {1596493,
	title = {A Generation of Italian Economists},
	year = {2021},
	abstract = {
	We examine the role of financial aid in shaping the formation of human capital in economics. Specifically, we study the impact of a large merit-based scholarship for graduate studies in affecting individuals{\textquoteright} occupational choices, career trajectories, and labor market outcomes of a generation of Italian economists with special focus on gender gaps and the role of social mobility. We construct a unique dataset that combines archival sources and includes microdata for the universe of applicants to the scholarship program and follow these individuals over their professional life. Our unique sample that focuses on the high end of the talent and ability distribution also allows us to analyze the characteristics of top graduates, a group which tends to be under-sampled in most surveys. We discuss five main results. First, women are less likely to be shortlisted for a scholarship as they tend to receive lower scores in the most subjective criteria used in the initial screening of candidates. Second, scholarship winners are much more likely to choose a research career and this effect is larger for women. Third, women who work in Italian universities tend to have less citations than men who work in Italy. However, the citation gender gap is smaller for candidates who received a scholarship. Fourth, women take longer to be promoted to the rank of full professor, even after controlling for academic productivity. Fifth, it is easier to become a high achiever for individuals from households with a lower socio-economic status if they reside in high social mobility provinces. However, high-achievers from lower socio-economic status households face an up-hill battle even in high social mobility provinces.

},
	author = {Enrico Nano and Ugo Panizza and Viarengo, Martina}
}
@article {1591235,
	title = {The Role of the Diaspora in the Internationalization of the Colombian Economy},
	year = {2021},
	abstract = {We studied the geography as well as the demographic and socio-economic characteristics of 1.7 million members of the global Colombian diaspora (34\% of the total estimated Colombian diaspora) using census and survey data from major host countries, and 3.5 million Twitter users located around the world presumed to be of Colombian origin. We also studied the locations and industries of Colombian senior managers and directors outside Colombia, using a global database of over 400 million companies. Moreover, we studied the migration journeys, the diaspora{\textquoteright}s attachment to Colombia, the level of diaspora engagement and interest in engaging, the intentions to return back home, the interest in diaspora government policy, and the overall sentiment of the diaspora towards Colombia, through a survey which received 11,500 responses from the diaspora in well over 100 countries in less than two months. We additionally interviewed 12 Colombian transnational entrepreneurs and professionals, to understand what attracts them professionally to Colombia, and what may stand in the way of more diaspora engagement and professional growth.},
	author = {Ljubica Nedelkoska and Andre Assumpcao and Ana Grisanti and Matte Hartog and Julian Hinz and Lu, Jessie and Muhaj, Daniela and Eric Protzer and Saxenian, AnnaLee and Hausmann, Ricardo}
}
@article {1589598,
	title = {Loreto{\textquoteright}s Hidden Wealth: Economic Complexity Analysis and Productive Diversification Opportunities},
	year = {2021},
	abstract = {
	The Growth Lab at Harvard University, with funding provided by the Gordon and Betty Moore Foundation, has undertaken this investigation with the aim of identifying the existing productive capacities in Loreto, as well as the economic activities with potential to drive the structural transformation of its economy. This paper is part of a broader investigation {\textendash} Promoting Sustainable Economic Growth and Structural Transformation in the Amazon Region of Loreto, Peru {\textendash} which seeks to contribute with context-specific inputs for the development of national and sub-national public policies that promote productive development and prosperity in this Peruvian state.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Tudela Pye, Jorge and Li, Yang and Ana Grisanti}
}
@article {1587337,
	title = {Productivity Gap and Inward FDI Spillovers: Theory and Evidence from China},
	journal = {China \& World Economy},
	volume = {29},
	number = {2},
	year = {2021},
	pages = {24{\textendash}48},
	abstract = {This paper constructs a two-stage sequential game model to shed light on the spillover effect of inward FDI on the efficiency of domestic firms in host countries. Our model shows that, given an optimal joint-venture policy made by foreign firms, the impact of the spillover effect of inward FDI is contingent upon the productivity gap between the domestic firms and foreign ones. In particular, we demonstrate that the spillover effect of inward FDI varies negatively with the productivity gap between domestic low-productivity firms and foreign firms but works in the opposite way for high-productivity firms. This suggests that once the productivity gap widens, the entry of foreign firms will increase the efficiency of high-productivity firms but reduce the efficiency of low-productivity firms. In support of our theoretical model, we provide robust empirical results by using the dataset of annual survey of Chinese industrial enterprises.},
	url = {http://eniwep.cssn.cn/selected_articles/202103/t20210315_5318121.shtml},
	author = {Shen, Jim Huangnan and Hao Wang and Steve Chu-Chia Lin}
}
@article {1587210,
	title = {Toward an empirical investigation of the long-term debt and financing deficit nexus: evidence from Chinese-listed firms},
	journal = {Applied Economics},
	year = {2021},
	abstract = {As the literature has studied the financing method of Chinese-listed firms for a long time, but with inconclusive indications, this research thus adopts non-financial Chinese-listed firms{\textquoteright} data from 2003 to 2015 to investigate the relationship between long-term debt financing and financing deficit. We pay particular attention to three channels (ownership concentration, market timing, and state ownership) that potentially affect the adoption of long-term debt financing when there is a financing deficit. The empirical analysis documents a positive relationship between financing deficit and changes in the long-term debt ratio in our sampled firms for both static and dynamic panel models. Moreover, among the three channels we show that state ownership has the strongest positive impact on the adoption of long-term debt financing, followed by ownership concentration, while the weakest channel is the market timing{\textquoteright}s negative effect. In general, our empirical analysis finds that the important external financing method of long-term debt is most likely to be impacted by the state ownership aspect.},
	url = {https://www.tandfonline.com/doi/full/10.1080/00036846.2021.1887805},
	author = {Xiaochen Jiang and Shen, Jim Huangnan and Lee, Chien-Chiang}
}
@article {1586606,
	title = {Western Australia {\textendash} Research Findings and Policy Recommendations},
	year = {2021},
	abstract = {
	The Government of Western Australia (WA), acting through its Department of Primary Industries and Regional Development (DPIRD), invited the Growth Lab of the Center for International Development at Harvard University to partner with the state to better understand and address constraints to economic diversification through a collaborative applied research project. The project seeks to apply growth diagnostic and economic complexity methodologies to inform policy design in order to accelerate productive transformation, economic diversification, and more inclusive and resilient job creation across Western Australia.



	This report is organized in six sections, including this brief introduction. Section 2 is an Executive Summary. Section 3 explains the methodologies of Growth Diagnostics and Economic Complexity, including its theoretical foundations and main concepts. Section 4 describes the main findings of the Economic Complexity Report, including a characterization of Western Australia{\textquoteright}s complexity profile. This is done at the state, regional, and city levels. Additionally, this section identifies diversification opportunities with high potential and organizes them into groupings to capture important patterns among the opportunities. This section also contextualizes the opportunities further by identifying relevant viability and attractiveness factors that complement the complexity metrics and consider local conditions. Section 5 highlights the main findings of the Growth Perspective Report. This section describes the economic growth process of Western Australia {\textemdash} with a focus on the past two decades {\textemdash} and identifies several issues with the way that growth has occurred. This section highlights three key channels through which negative externalities have manifested: labor market imbalances, pro-cyclicality of fiscal policy, and a misalignment of public goods. The section provides perspectives on the ways in which each of these channels have hampered the quality of growth and explores the deep-rooted factors that underpin these adverse dynamics. Section 6 introduces a policy framework that can be leveraged by WA to capitalize on revealed diversification opportunities and address the factors that impact the quality of the growth process of the state.

},
	author = {Hausmann, Ricardo and Douglas Barrios and Ana Grisanti and Semiray Kasoolu and Tim O{\textquoteright}Brien and Eric Protzer and Rushabh Sanghvi and Nikita Taniparti and Jorge Tapia}
}
@article {1586604,
	title = {Economic Complexity Report for Western Australia},
	year = {2021},
	abstract = {
	The Government of Western Australia (WA), acting through its Department of Primary Industries and Regional Development (DPIRD), invited the Growth Lab of the Center for International Development (CID) at Harvard University to partner with the state to better understand and address constraints to economic diversification through a collaborative applied research project. The project seeks to apply growth diagnostic and economic complexity methodologies to inform policy design in order to accelerate productive transformation, economic diversification, and more inclusive and resilient job creation across Western Australia.



	This Economic Complexity Report\&nbsp;is organized in six sections, including this brief introduction. Section 2 explains the methodology of economic complexity, including its theoretical foundations and main concepts, as well as the adjustments that were required to obtain the required export data at a subnational level and incorporate the service sector to the analysis. Section 3 describes the structure of the WA economy, identifying its productive capacities and exploring its complexity profile. This is done at the state, regional, and city levels. Section 4 identifies industries with high potential and organizes them into groupings to capture important patterns among the opportunities. Section 5 contextualizes the opportunities further by identifying relevant viability and attractiveness factors that complement the complexity metrics and consider local conditions, as well as a criterion for regional participation in the state-wide diversification strategy. Finally, Section 6 summarizes the main findings of this report and discusses implications for Government of WA strategy and policy toward capitalizing on these revealed opportunities.

},
	author = {Hausmann, Ricardo and Eric Protzer and Jorge Tapia and Ana Grisanti}
}
@article {1586603,
	title = {Growth Perspective on Western Australia},
	year = {2021},
	abstract = {
	The Government of Western Australia (WA), acting through its Department of Primary Industries and Regional Development (DPIRD), invited the Growth Lab of the Center for International Development at Harvard University to partner with the state to better understand and address constraints to economic diversification through a collaborative applied research project. The project seeks to apply growth diagnostic and economic complexity methodologies to inform policy design in order to accelerate productive transformation, economic diversification, and more inclusive and resilient job creation across Western Australia. As its name implies, this Growth Perspective Report aims to provide a set of perspectives on the process of economic growth in WA that provide insights for policymakers toward improving growth outcomes.



	This Growth Perspective Report describes both the economic growth process of Western Australia {\textemdash} with a focus on the past two decades {\textemdash} and identifies several problematic issues with the way that growth has been structured. In particular, this report traces important ways in which policies applied during the boom and subsequent slowdown in growth over the last twenty years have exacerbated a number of self-reinforcing negative externalities of undiversified growth. The report analyzes three key channels through which negative externalities have manifested: labor market imbalances, pro-cyclicality of fiscal policy, and a misalignment of public goods. The report includes sections on each of these channels, which provide perspectives on the ways in which they have hampered the quality of growth and explore the reasons why problematic externalities have become self-reinforcing. In some cases, new issues have emerged in the most recent iteration of WA{\textquoteright}s boom-slowdown cycle, but many issues have roots in the long-term growth history of WA.

},
	author = {Hausmann, Ricardo and Douglas Barrios and Ana Grisanti and Semiray Kasoolu and Tim O{\textquoteright}Brien and Eric Protzer and Rushabh Sanghvi and Nikita Taniparti and Jorge Tapia}
}
@article {1584861,
	title = {Sorting, Matching and Economic Complexity},
	year = {2021},
	abstract = {Assignment models in trade predict that countries with higher productivity levels are assortatively matched to industries that make better use of these higher levels. Here, we assume that the driver of productivity differences is the differential distribution of factors among countries. Utilizing such a structure, we define and estimate the average factor level (AFL) for countries and products using only the information about the production patterns. Interestingly, our estimates coincide with the complexity variables of (Hidalgo and Hausmann, 2009), providing an underlying economic rationale. We show that AFL is highly correlated with country-level characteristics and predictive of future economic growth.},
	author = {Muhammed A. Yildirim}
}
@article {1582235,
	title = {Productive Ecosystems and the arrow of development},
	journal = {Nature Communications},
	volume = {12},
	year = {2021},
	abstract = {
	Economic growth is associated with the diversification of economic activities, which can be observed via the evolution of product export baskets. Exporting a new product is dependent on having, and acquiring, a specific set of capabilities, making the diversification process path-dependent. Taking an agnostic view on the identity of the capabilities, here we derive a probabilistic model for the directed dynamical process of capability accumulation and product diversification of countries. Using international trade data, we identify the set of pre-existing products, the product Ecosystem, that enables a product to be exported competitively. We construct a directed network of products, the Eco Space, where the edge weight corresponds to capability overlap. We uncover a modular structure, and show that low- and middle-income countries move from product communities dominated by small Ecosystem products to advanced (large Ecosystem) product clusters over time. Finally, we show that our network model is predictive of product appearances.



	Listen to the authors discuss their findings in this Growth Lab Podcast.

},
	url = {https://www.nature.com/articles/s41467-021-21689-0},
	author = {Neave O{\textquoteright}Clery and Muhammed A. Yildirim and Hausmann, Ricardo}
}
@article {1581905,
	title = {Implied Comparative Advantage},
	journal = {Research Policy },
	year = {2021},
	abstract = {The comparative advantage of a location shapes its industrial structure. Current theoretical models based on this principle do not take a stance on how comparative advantages in different industries or locations are related with each other, or what such patterns of relatedness might imply about the evolution of comparative advantage. We build a simple Ricardian-inspired model and show that hidden information on inter-industry and inter-location relatedness can be captured by simple correlations between the observed structure of industries across locations, or the structure of locations across industries. We then use this recovered information to calculate a measure of\&nbsp;implied comparative advantage,\&nbsp;and show that it explains much of the location{\textquoteright}s current industrial structure. We give evidence that these patterns are present in a wide variety of contexts, namely the export of goods (internationally) and the employment, payroll and number of establishments across the industries of subnational regions (in the US, Chile and India). In each of these cases, the deviations between the\&nbsp;observed\&nbsp;and\&nbsp;implied\&nbsp;comparative advantage in the past tend to be highly predictive of future industry growth, especially at horizons of a decade or more; this explanatory power holds at both the intensive as well as the extensive margin. These results suggest that a component of the long-term evolution of comparative advantage is already implied in today{\textquoteright}s patterns of production.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S0048733320302183},
	author = {Hausmann, Ricardo and Daniel P. Stock and Muhammed A. Yildirim}
}
@article {1580657,
	title = {Lockdown Fatigue: The Diminishing Effects of Quarantines on the Spread of COVID-19},
	year = {2021},
	abstract = {
	Non-Pharmaceutical Interventions (NPIs) have been for most countries the key policy instrument utilized to contain the impact of the COVID-19 pandemic. In this article, we conduct an empirical analysis of the impact of these policies on the virus{\textquoteright} transmission and death toll, for a panel of 152 countries, from the start of the pandemic through December 31, 2020. We find that lockdowns tend to significantly reduce the spread of the virus and the number of related deaths. We also show that this benign impact declines over time: after four months of strict lockdown, NPIs have a significantly weaker contribution in terms of their effect in reducing COVID-19 related fatalities. Part of the fading effect of quarantines could be attributed to an increasing non-compliance with mobility restrictions, as reflected in our estimates of a declining effect of lockdowns on measures of actual mobility. However, we additionally find that a reduction in de facto mobility also exhibits a diminishing effect on health outcomes, which suggests that lockdown fatigues may have introduce broader hurdles to containment policies.



	Podcast: Do Lockdowns Work? Eduardo Levy Yeyati discusses the research with Sam Munson of the Octavian Report.

},
	author = {Goldstein, Patricio and Eduardo Levy Yeyati and Sartorio, Luca}
}
@article {1580650,
	title = {Inequality, Openness, and Growth through Creative Destruction},
	year = {2021},
	abstract = {We examine how inequality and openness interact in shaping the long-run growth prospects of developing countries. To this end, we develop a Schumpeterian growth model with heterogeneous households and non-homothetic preferences for quality. We show that inequality affects growth very differently in an open economy as opposed to a closed economy: If the economy is close to the technological frontier, the positive demand effect of inequality on growth found in closed-economy models may be amplified by international competition. In countries with a larger distance to the technology frontier, however, rich households satisfy their demand for high quality via importing, and the effect of inequality on growth is smaller than in a closed economy and may even be negative. We show that this theoretical prediction holds up in the data, both when considering growth in export quality at the industry level and when considering growth in GDP per capita.},
	author = {Adrian J{\"a}ggi and Schetter, Ulrich and Schneider, Maik T.}
}
@inbook {1579416,
	title = {Economics of Covid-19 in three sub-Saharan African countries: Ethiopia, Namibia and South Africa},
	booktitle = {Shaping Africa{\textquoteright}s Post-Covid Recovery},
	year = {2021},
	pages = {195-214},
	publisher = {The Centre for Economic Policy Research Press},
	organization = {The Centre for Economic Policy Research Press},
	abstract = {With the exception of some flashpoints in Northern and Southern Africa, the continent has been largely spared from the direct health effect of Covid-19. However, the African economy has been significantly hurt by the economic consequences. This eBook summarises recent research on the economic effect of the Covid-19 pandemic in the continent covering a wide array of topics focusing on the response of firms, households, governments, and international organisations.},
	url = {https://voxeu.org/content/shaping-africa-s-post-covid-recovery},
	author = {Goldstein, Patricio and Hausmann, Ricardo},
	editor = {Rabah Arezki and Djankov, Simeon and Ugo Panizza}
}
@article {1573811,
	title = {The Economic Case for Global Vaccinations: An Epidemiological Model with International Production Networks},
	year = {2021},
	note = {
	In the news:New Yorker: Why Rich Countries Should Subsidize Vaccination Around the World

},
	abstract = {COVID-19 pandemic had a devastating effect on both lives and livelihoods in 2020. The arrival\&nbsp;of effective vaccines can be a major game changer. However, vaccines are in short supply\&nbsp;as of early 2021 and most of them are reserved for the advanced economies. We show that the\&nbsp;global GDP loss of not inoculating all the countries, relative to a counterfactual of global vaccinations,\&nbsp;is higher than the cost of manufacturing and distributing vaccines globally. We use an\&nbsp;economic-epidemiological framework that combines a SIR model with international production\&nbsp;and trade networks. Based on this framework, we estimate the costs for 65 countries and 35 sectors.\&nbsp;Our estimates suggest that up to 49 percent of the global economic costs of the pandemic\&nbsp;in 2021 are borne by the advanced economies even if they achieve universal vaccination in their\&nbsp;own countries.},
	author = {Cem Cakmakli and Selva Demiralp and Kalemli-Ozcan, Sebnem and Sevcan Yesiltas and Muhammed Yildirim}
}
@article {1567218,
	title = {Place-specific determinants of income gaps: New sub-national evidence from Mexico},
	journal = {Journal of Business Research},
	year = {2021},
	abstract = {The literature on wage gaps between Chiapas and the rest of Mexico revolves around individual factors, such as education and ethnicity. Yet, twenty years after the Zapatista rebellion, the schooling gap has shrunk while the wage gap has widened, and we find no evidence indicating that Chiapas indigenes are worse-off than their likes elsewhere in Mexico. We explore a different hypothesis and argue that place-specific characteristics condition the choices and behaviors of individuals living in Chiapas and explain persisting income gaps. Most importantly, they limit the necessary investments at the firm level in dynamic capabilities. Based on census data, we calculate the economic complexity index, a measure of the knowledge agglomeration embedded in the economic activities at the municipal level. Economic complexity explains a larger fraction of the wage gap than any individual factor. Our results suggest that the problem is Chiapas, and not\&nbsp;Chiapanecos.},
	url = {https://www.sciencedirect.com/science/article/pii/S0148296321000035?dgcid=author},
	author = {Hausmann, Ricardo and Carlo Pietrobelli and Miguel Angel Santos}
}
@report {1639400,
	title = {Accelerating Growth in Albania through Targeted Investment Promotion},
	year = {2020},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	address = {Cambridge},
	abstract = {
	The investment promotion process in Albania is underperforming versus its potential. Between 2014 and 2018, the Albanian economy saw accelerating growth and transformation, which has been tied to the arrival of foreign companies. However, Albania has the potential to realize much more and more diversified foreign direct investment (FDI), which will be critical to accelerating growth in the period of global recovery from the COVID-19 pandemic. As the Albanian economy weathers the storm of COVID-19, it is critical to look to the future by enhancing the investment promotion process to be more targeted and proactive such that Albania can attract transformative global companies aligned with the country{\textquoteright}s comparative advantages. This is not only a critical step toward faster and more resilient economic growth in Albania; it also happens to have very high returns in comparison to the limited fiscal spending required to implement the actions required.



	The targeted investment promotion approach discussed in this note would capitalize on Albania{\textquoteright}s many existing comparative advantages for attracting efficiency-seeking FDI. It would not displace Albania{\textquoteright}s Strategic Investment Law nor the activities of the Albanian Investment Corporation (AIC), which aim to expand the country{\textquoteright}s comparative advantages. Efficiency-seeking FDI {\textemdash} global companies that expand into Albania to serve global markets because it makes them more productive {\textemdash} do not need extensive tax incentives, regulatory exemptions, or other subsidies. In fact, an overreliance on these approaches can crowd out firms that do not want or need to rely on government support. Adding targeted investment promotion to Albania{\textquoteright}s growth strategy would lead to more jobs, better quality jobs, more inclusive job growth, faster convergence with the income levels of the rest of Europe, and ultimately less outmigration.



	This note summarizes the Growth Lab{\textquoteright}s observations of the investment promotion process in Albania, over the last year in particular, and lays out recommendations to capture widespread opportunities for economic transformation that have been missed to date. The recommendations provided at the end of this note provide a roadmap for building an enhanced network for targeted investment promotion that is specific to Albania{\textquoteright}s context. These recommendations recognize the current constraints that the COVID-19 pandemic creates but also look past the pandemic to prepare for opportunities that will emerge during the global recovery.

},
	author = {Tim O{\textquoteright}Brien and Muhaj, Daniela and Hector Zevallos and Lu, Jessie}
}
@article {1577471,
	title = {Production Ability and Economic Growth},
	journal = {Research Policy },
	year = {2020},
	abstract = {Cities and countries undergo constant structural transformation. Industries need many inputs, such as regulations, infrastructure or productive knowledge, which we call capabilities. And locations are successful in hosting industries insofar as the capabilities that they can provide. We propose a capabilities-based production model and an empirical strategy to measure the Sophistication of a product and the Production Ability of a location. We apply our framework to international trade data and employment data in the United States, recovering measures of Production Ability for countries and cities, and the Sophistication of products and industries. We show that both country- and city-level measures have a strong correlation with income and economic growth at different time horizons. Product Sophistication is positively correlated with indicators of human capital and wages. Our model-based estimations predict product appearances and disappearances through the extensive margin.},
	url = {https://www.sciencedirect.com/science/article/pii/S0048733320302286$\#$!},
	author = {Sebasti{\'a}n Bustos and Muhammed Yildirim}
}
@article {1567204,
	title = {Macroeconomic Rationales for Public Investments in Science},
	journal = {Economic Inquiry},
	volume = {59},
	year = {2020},
	abstract = {What is the economic rationale for investing in science? Based on an open economy model of creative destruction, we characterize four key factors of optimal investment in basic research: the stage of economic development, the strength of the manufacturing base, the degree of openness, and the share of foreign-owned firms. For each of these factors, we analyze its bearings on optimal basic research investment. We then show that the predicted effects are consistent with patterns observed in the data and discuss how the factor-based approach might inform basic research policies.},
	url = {https://onlinelibrary.wiley.com/doi/10.1111/ecin.12921},
	author = {Gersbach, Hans and Schetter, Ulrich and Schneider, Maik T.}
}
@article {1555348,
	title = {Buscando virtudes en la lejan{\'\i}a: Recomendaciones de pol{\'\i}tica para promover el crecimiento inclusivo y sostenible en Loreto, Peru},
	year = {2020},
	abstract = {
	Loreto es un lugar de contrastes. Es el departamento m{\'a}s grande del Per{\'u}, pero se encuentra entre los de menor densidad poblacional. Su capital, Iquitos, est{\'a} m{\'a}s cerca de los estados fronterizos de Brasil y Colombia que de las capitales de sus regiones vecinas en el Per{\'u} - San Mart{\'\i}n y Ucayali. S{\'o}lo se puede llegar a Iquitos por v{\'\i}a a{\'e}rea o fluvial, lo que la convierte en una de las mayores ciudades del mundo sin acceso por carretera. Desde la fundaci{\'o}n del departamento, la econom{\'\i}a de Loreto ha dependido de la explotaci{\'o}n de recursos naturales, desde el boom del caucho a finales del siglo XIX y principios del XX hasta la extracci{\'o}n petrolera y explotaci{\'o}n de recursos forestales que predomina en nuestros d{\'\i}as. Este modelo ha tra{\'\i}do consigo da{\~n}os ambientales significativos y ha producido un patr{\'o}n de crecimiento lento y vol{\'a}til, que ha abierto una brecha cada vez m{\'a}s amplia entre la econom{\'\i}a de la regi{\'o}n y la del resto del pa{\'\i}s. Entre 1980 y 2018, Loreto creci{\'o} a una tasa promedio compuesta anual cuatro veces menor a la del resto del Per{\'u}. Es decir, mientras el resto del Per{\'u} triplic{\'o} el tama{\~n}o de su econom{\'\i}a, la de Loreto creci{\'o} algo menos que un tercio.



	En la {\'u}ltima d{\'e}cada (2008-2018), la regi{\'o}n tambi{\'e}n se ha venido distanciando de sus pares amaz{\'o}nicos en el pa{\'\i}s (Ucayali, San Mart{\'\i}n y Madre de Dios), que han crecido a una tasa promedio anual cinco veces mayor. En este per{\'\i}odo, el ingreso promedio por habitante en Loreto ha pasado de ser tres cuartas partes del promedio nacional en 2008 a menos de la mitad para 2018. Adem{\'a}s del rezago econ{\'o}mico - o quiz{\'a}s como consecuencia de {\'e}l -, Loreto tambi{\'e}n se ubica entre los departamentos con peores indicadores de desarrollo social, anemia y desnutrici{\'o}n infantil del Per{\'u}.



	En este contexto, el Laboratorio de Crecimiento de la Universidad de Harvard se asoci{\'o} con la Fundaci{\'o}n Gordon and Betty Moore para desarrollar una investigaci{\'o}n que proporcionara insumos y recomendaciones de pol{\'\i}tica para acelerar el desarrollo de la regi{\'o}n y generar prosperidad de forma sostenible.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Tudela Pye, Jorge and Frank Muci and Li, Yang and Miralles-Wilhelm, Fernando and Ana Grisanti and Lu, Jessie}
}
@article {1554251,
	title = {Supply-Side Structural Reform and Dynamic Capital Structure Adjustment: Evidence from Chinese-Listed Firms},
	journal = {Pacific-Basin Finance Journal},
	volume = {65},
	year = {2020},
	abstract = {
	The literature extensively discusses the increasing commitment toward comprehensive structural reform of China{\textquoteright}s economy as it targets to achieve high quality and sustainable economic growth. This research investigates the inherent relationship between supply-side structural reform (SSSR) and dynamic capital structure adjustment in Chinese-listed firms. Our results show that SSSR{\textquoteright}s introduction has significantly improved the adjustment speed toward the optimal debt ratio, especially for firms with high indebtedness and low investment performance. Importantly, China{\textquoteright}s bond market plays a crucial role through SSSR for firms{\textquoteright} debt ratio to adjust toward their optimal level. However, there is no such evidence among state-owned enterprises (SOEs), suggesting that the structural reform concerning corporate capital structure for SOEs is more challenging and longstanding when compared with non-SOEs.

},
	url = {https://doi.org/10.1016/j.pacfin.2020.101482},
	author = {Shen, Jim Huangnan}
}
@article {1554250,
	title = {Towards a Dynamic Model of the Industrial Upgrading with Global Value Chains},
	journal = {The World Economy},
	year = {2020},
	abstract = {
	This research constructs a simple dynamic model to illustrate the micro-mechanism of industrial upgrading along the global value chains. Our model predicts that as firms move up from downstream to upstream stages, (a) there is higher profitability if and only if the following three conditions are satisfied. First, the increasing rate of sunk cost (including R\&amp;D expenditure) over sequential stages of production cannot be sufficiently large (endogenous sunk cost effect). Second, the decreasing rate of change of intermediate input demand with respect to the price set by firms at a production stage cannot be sufficiently high (intermediate input price effect). Third, the decreasing rate of change of intermediate input demand with respect to the pricing dynamics over the sequential stages of production cannot be sufficiently large (sequential pricing uncertainty effect); (b) total cost is lower if and only if the decreasing rate of change of input demand with respect to the price is sufficiently large; (c) output is higher if and only if and the decreasing rate of change of input demand with respect to the price is not sufficiently large; and (d) the price decreases. We show that the empirical patterns revealed in China are consistent with our model{\textquoteright}s predictions.

},
	url = {https://doi.org/10.1111/twec.13068},
	author = {Shen, Jim Huangnan}
}
@article {1552222,
	title = {The Node Vector Distance Problem in Complex Networks},
	journal = {ACM Computing Surveys},
	volume = {53},
	number = {6},
	year = {2020},
	abstract = {We describe a problem in complex networks we call the Node Vector Distance (NVD) problem, and we survey algorithms currently able to address it. Complex networks are a useful tool to map a non-trivial set of relationships among connected entities, or nodes. An agent{\textemdash}e.g., a disease{\textemdash}can occupy multiple nodes at the same time and can spread through the edges. The node vector distance problem is to estimate the distance traveled by the agent between two moments in time. This is closely related to the Optimal Transportation Problem (OTP), which has received attention in fields such as computer vision. OTP solutions can be used to solve the node vector distance problem, but they are not the only valid approaches. Here, we examine four classes of solutions, showing their differences and similarities both on synthetic networks and real world network data. The NVD problem has a much wider applicability than computer vision, being related to problems in economics, epidemiology, viral marketing, and sociology, to cite a few. We show how solutions to the NVD problem have a wide range of applications, and we provide a roadmap to general and computationally tractable solutions. We have implemented all methods presented in this article in a publicly available open source library, which can be used for result replication.},
	url = {https://doi.org/10.1145/3416509},
	author = {Michele Coscia and Andres Gomez-Lievano and McNerney, James and Neffke, Frank}
}
@report {1541604,
	title = {Pathways for Productive Diversification in Ethiopia},
	year = {2020},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Ethiopia will need to increase the diversity of its export basket to guarantee a sustainable growth path. Ethiopia has shown stellar growth performance throughout the last two decades, but, in this period, export growth has been insufficient to finance the country{\textquoteright}s balance of payments needs. As argued in our Growth Diagnostic report,1 Ethiopia{\textquoteright}s growth decelerated as a result of the increasing external imbalances which have resulted in a foreign exchange constraint. This macroeconomic imbalance is now slowing the rate of economic growth, job creation and poverty alleviation across the country. Although export growth will not be rapid enough to address the foreign exchange constraint on its own in the short-term, the only way for the country to achieve macroeconomic balance as it grows in the longer term is to increase its exports per capita. With only limited opportunities to expand its exports on the intensive margin, the Government of Ethiopia (GoE) will have to strategically support the diversification of its economy to expand its exports base.



	This report applies the theory of Economic Complexity in order to describe the base of productive knowhow and assess the opportunities and constraints to diversification in Ethiopia{\textquoteright}s economy. The theory of Economic Complexity offers tools to capture and quantitatively estimate the diversity and sophistication of productive knowhow in an economy and to analyze the potential to develop comparative advantage in new industries. These tools provide valuable inputs for informing diversification strategies and the use of state resources by providing rigorous information on the risks and potential returns of government industrial policies in support of different sectors.

},
	author = {Goldstein, Patricio}
}
@article {1539841,
	title = {Diagn{\'o}stico de Crecimiento de Loreto: Principales Restricciones al Desarrollo Sostenible},
	year = {2020},
	abstract = {
	Sembrado en el flanco oeste de la selva amaz{\'o}nica, Loreto se encuentra entre los departamentos m{\'a}s pobres y con peores indicadores sociales del Per{\'u}. El desarrollo enfrenta all{\'\i} un sinf{\'\i}n de barreras, pero no todas son igualmente limitantes y tampoco hay recursos para atender todos los problemas a la vez. El Laboratorio de Crecimiento de la Universidad de Harvard, bajo el auspicio de la Fundaci{\'o}n Gordon and Betty Moore, ha desarrollado un Diagn{\'o}stico de Crecimiento que buscar identificar las restricciones m{\'a}s limitantes, y priorizar las intervenciones de pol{\'\i}ticas p{\'u}blicas alrededor de un n{\'u}mero reducido de factores con el mayor impacto. La investigaci{\'o}n, que se fundamenta en an{\'a}lisis de bases de datos nacionales e internacionales, e incluye factores cuantitativos y cualitativos derivados de las visitas de campo, identifica a la conectividad de transporte, los problemas de coordinaci{\'o}n asociados al autodescubrimiento, y la energ{\'\i}a el{\'e}ctrica, como las restricciones m{\'a}s vinculantes para el desarrollo de Loreto. De acuerdo con nuestras conclusiones, mejoras en la provisi{\'o}n de estos tres factores tendr{\'\i}an un mayor impacto sobre el desarrollo sostenible de la regi{\'o}n que mejores en la educaci{\'o}n y los niveles de capital humano, el acceso a financiamiento, y otros sospechosos habituales. Este reporte es el segundo de una investigaci{\'o}n m{\'a}s amplia {\textendash} Transformaci{\'o}n estructural y restricciones limitantes a la prosperidad en Loreto, Per{\'u} {\textendash} que busca aportar insumos para el desarrollo de pol{\'\i}ticas p{\'u}blicas a escala nacional y regional que contribuyan a promover el desarrollo productivo y la prosperidad de la regi{\'o}n.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Frank Muci and Tudela Pye, Jorge and Ana Grisanti and Lu, Jessie}
}
@article {1537239,
	title = {Assessing Ukraine{\textquoteright}s Role in European Value Chains: A Gravity Equation-cum-Economic Complexity Analysis Approach},
	year = {2020},
	abstract = {We analyze Ukraine{\textquoteright}s opportunities to participate in European value chains, using traditional gravity models, combined with tools from Economic Complexity Analysis to study international trade (exports) and Foreign Direct Investment (FDI). This toolbox is shown to be predictive of the growth and entry of new exports to the EU{\textquoteright}s Single Market, as well as foreign direct investments from the Single Market in Ukraine. We find that Ukraine has suffered from a decline of trade with Russia, which has led not only to a quantitative but also a qualitative deterioration in Ukrainian exports. Connecting to western European value chains is in principle possible, with several opportunities in the automotive, information technology and other sectors. However, such a shift may lead to a spatial restructuring of the Ukrainian economy and a mismatch between the geographical supply of and demand for labor.},
	author = {Matte Hartog and Lopez-Cordova, J. Ernesto and Neffke, Frank}
}
@article {1536650,
	title = {On Globalization and the Concentration of Talent: A General Result on Superstar Effects and Matching},
	year = {2020},
	note = {revised October 2020},
	abstract = {We analyze how globalization affects the allocation of talent across competing teams in large matching markets. Focusing on amplified superstar effects, we show that a convex transformation of payoffs promotes positive assortative matching. This result holds under minimal assumptions on how skills translate into competition outcomes and how competition outcomes translate into payoffs. Our analysis covers many interesting special cases, including simple extensions of Rosen (1981) and Melitz (2003) with competing teams. It also provides new insights on the distributional consequences of globalization, and on the role of technological change, urban agglomeration, and taxation for the composition of teams.},
	author = {Schetter, Ulrich and Tejada, Oriol}
}
@article {1535526,
	title = {La Riqueza Escondida de Loreto: An{\'a}lisis de Complejidad Econ{\'o}mica y Oportunidades de Diversificaci{\'o}n Productiva},
	year = {2020},
	abstract = {
	El Laboratorio de Crecimiento de la Universidad de Harvard, bajo el auspicio de la Fundaci{\'o}n Gordon and Betty Moore, ha desarrollado esta investigaci{\'o}n para identificar las capacidades productivas existentes en Loreto y las actividades econ{\'o}micas con potencial para liderar la transformaci{\'o}n estructural de su econom{\'\i}a. Este reporte forma parte de una investigaci{\'o}n m{\'a}s amplia {\textendash} Transformaci{\'o}n estructural y restricciones limitantes a la prosperidad en Loreto, Per{\'u} {\textendash} que busca aportar insumos para el desarrollo de pol{\'\i}ticas p{\'u}blicas a escala nacional y regional que contribuyan a promover el desarrollo productivo y la prosperidad de la regi{\'o}n, tomando en cuenta sus caracter{\'\i}sticas particulares.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Tudela Pye, Jorge and Li, Yang and Ana Grisanti}
}
@article {1534227,
	title = {Emerging Cities as Independent Engines of Growth: The Case of Buenos Aires},
	year = {2020},
	abstract = {
	What does it take for a sub-national unit to become an autonomous engine of growth? This issue is particularly relevant to large cities, as they tend to display larger and more complex know-how agglomerations and may have access to a broader set of policy tools. To approximate an answer to this question, specific to the case of Buenos Aires, Harvard{\textquoteright}s Growth Lab engaged in a research project from December 2018 to June 2019, collaborating with the Center for Evidence-based Evaluation of Policies (CEPE) of Universidad Torcuato di Tella, and the Development Unit of the Secretary of Finance of the City of Buenos Aires. Together, we have developed research agenda that seeks to provide inputs for a policy plan aimed at decoupling Buenos Aires{\textquoteright}s growth trajectory from the rest of Argentina{\textquoteright}s.



	Listen to the Growth Lab Podcast interview with the authors.\&nbsp;

},
	author = {Hausmann, Ricardo and Douglas Barrios and Muhaj, Daniela and Noor, Sehar and Pan, Carolina and Miguel Angel Santos and Jorge Tapia and Bruno Zuccolo}
}
@article {1533084,
	title = {Income Changes after Inter-city Migration},
	year = {2020},
	abstract = {Using panel data for workers who change jobs, changes in several labor outcomes after inter-city migration are estimated by comparing workers in similar circumstances who move to a new city {\textendash}the treatment group{\textemdash}with those who stay in the same city {\textendash}the control group. After matching the two groups using Mahalanobis distances over a wide range of covariates, the methodology of {\textquotedblleft}difference-in-difference treatment effects on the treated{\textquotedblright} is used to estimate changes after migration. On average, migrants experience income gains but their dedication to formal employment becomes shorter. Income changes are very heterogenous, with low-wage workers and those formerly employed by small firms experiencing larger and more sustained gains. The propensity to migrate by groups of sex, age, wage level, initial dedication, initial firm size and size of city of origin is significantly and directly correlated with the expected cumulative income gains of migration, and inversely with the uncertainty of such gains.},
	author = {Eduardo Lora}
}
@article {1526313,
	title = {Mortgage Payments and Household Consumption in Urban China},
	journal = {Economic Modelling},
	volume = {93},
	year = {2020},
	pages = {100-111},
	abstract = {
	By exploiting variation both in mortgage payoffs and mortgage interest rate resets, we find that a decline in mortgage payments induces a significant increase in nondurable goods spending, even when households have substantial amounts of liquidity. Following mortgage payoff, households increase consumption expenditures by 61\% of the original payment. In comparison, households increase consumption by only 36\% in response to a transitory payment adjustment induced by interest rate changes. Households with a higher payment-to-income ratio have a significantly lower marginal propensity to consume (MPC). These results have practical implications for policy markers seeking to design consumption boosting policies and are important for understanding how changes in monetary policy may affect consumer spending patterns.

},
	url = {https://doi.org/10.1016/j.econmod.2020.07.008},
	author = {Da Zhao and Yifan Chen and Shen, Jim H.}
}
@article {1523132,
	title = {Knowledge Diffusion in the Network of International Business Travel},
	journal = {Nature Human Behaviour},
	volume = {4},
	number = {10},
	year = {2020},
	abstract = {
	We use aggregated and anonymized information based on international expenditures through corporate payment cards to map the network of global business travel. We combine this network with information on the industrial composition and export baskets of national economies. The business travel network helps to predict which economic activities will grow in a country, which new activities will develop and which old activities will be abandoned. In statistical terms, business travel has the most substantial impact among a range of bilateral relationships between countries, such as trade, foreign direct investments and migration. Moreover, our analysis suggests that this impact is causal: business travel from countries specializing in a specific industry causes growth in that economic activity in the destination country. Our interpretation of this is that business travel helps to diffuse knowledge, and we use our estimates to assess which countries contribute or benefit the most from the diffusion of knowledge through global business travel.



	Additional content:



	
		Mapping Business Travel \&amp; Knowhow Index
	
	
		Podcast: What would happen if business travel stopped?
	
	
		Op-ed: Why Zoom can{\textquoteright}t save the world
	

},
	url = {https://www.nature.com/articles/s41562-020-0922-x},
	author = {Michele Coscia and Neffke, Frank and Hausmann, Ricardo}
}
@website {1568576,
	title = {Albania{\textquoteright}s Industry Targeting Dashboard},
	journal = {The Growth Lab{\textquoteright}s VizHub},
	year = {2020},
	abstract = {This industry targeting tool is custom-made for Albania. Users can choose any of 272 industries (based on NACE Rev. 2 industry codes) from the above drop-down list and explore the industry{\textquoteright}s match with Albania{\textquoteright}s current productive capabilities and comparative advantages and disadvantages. The tool is designed for use by government and non-government entities that seek to attract foreign direct investment (FDI) to Albania to accelerate economic development.\&nbsp;Harvard Growth Lab research in Albania\&nbsp;shows that the long-term pace of economic growth will be determined by the pace at which the country can absorb new economic activities and productive capabilities from abroad. Detailed information on the methodology and data sources used in this tool can be found\&nbsp;here. This tool can be used in combination with the Growth Lab{\textquoteright}s\&nbsp;Atlas of Economic Complexity\&nbsp;to explore patterns in global trade in very high detail.},
	url = {https://growthlab.app/albania-tool},
	author = {Miguel Santos and Ermal Frasheri and Tim O{\textquoteright}Brien and Muhaj, Daniela and Lu, Jessie}
}
@webarticle {1567707,
	title = {Can Albania{\textquoteright}s Economic Turnaround Survive COVID-19? A Growth Diagnostic Update},
	journal = {The Growth Lab{\textquoteright}s VizHub},
	year = {2020},
	abstract = {The Growth Lab, which works with countries to identify obstacles to growth and propose targeted policy solutions, has been conducting\&nbsp;applied research in Albania\&nbsp;since 2013. This brief analysis takes stock of Albania{\textquoteright}s economic growth prior to the COVID-19 crisis and what the strengths and weaknesses of the pre-COVID economy imply for recovery and the possibility of accelerating long-term and inclusive growth in the years to come. Albania is a place where much has been achieved to expand opportunity and well-being as growth has gradually accelerated since 2013-14, but where much remains to be done to continue this acceleration once the immediate crisis of COVID-19 has passed.},
	url = {https://growthlab.app/accelerating-growth-in-albania},
	author = {Tim O{\textquoteright}Brien and Lu, Jessie}
}
@article {1521034,
	title = {Horrible Trade-offs in a Pandemic: Lockdowns, Transfers, Fiscal Space, and Compliance},
	year = {2020},
	abstract = {
	In this paper, we develop a heterogeneous agent general equilibrium framework to analyze optimal joint policies of a lockdown and transfer payments in times of a pandemic. In our model, the effectiveness of a lockdown in mitigating the pandemic depends on endogenous compliance. A more stringent lockdown deepens the recession which implies that poorer parts of society find it harder to subsist. This reduces their compliance with the lockdown, and may cause deprivation of the very poor, giving rise to an excruciating trade-off between saving lives from the pandemic and from deprivation. Lump-sum transfers help mitigate this trade-off. We identify and discuss key trade-offs involved and provide comparative statics for optimal policy. We show that, ceteris paribus, the optimal lockdown is stricter for more severe pandemics and in richer countries. We then consider a government borrowing constraint and show that limited fiscal space lowers the optimal lockdown and welfare, and increases the aggregate death burden during the pandemic. We finally discuss distributional consequences and the political economy of fighting a pandemic.



	Additional readings:



	
		Q\&amp;A with the authors
	
	
		Op-ed in VoxEU
	

},
	author = {Hausmann, Ricardo and Schetter, Ulrich}
}
@article {1517949,
	title = {Labor Market Nationalization Policies and Firm Outcomes: Evidence from Saudi Arabia},
	year = {2020},
	abstract = {Saudi Arabia is home to the world{\textquoteright}s third largest migrant population. Under mounting pressure to increase the private sector employment of Saudis during the last decade, a series of nationalization policies on the labor force have been imposed since late 2011. In this paper, we study how the first nationalization policy, Nitaqat, affected the overall labor market and non-oil firms in the private sector, especially exporting firms. Our rich and novel data allow us to assess the effect of the policy on a wide set of outcomes: employment decisions by composition and size, the output and productivity of exporting firms, labor costs, and exit from the market. Using a difference-in-difference analysis, we compare the 2011 to 2012 change in outcomes between firms above and firms below the threshold required for the minimum share of Saudi workers in a firm. Our results suggest that the policy succeeded in encouraging firms to increase the share of Saudis in private firms. It also increased the share of Saudi women in the workforce, suggesting that the policy had a positive effect on increasing female labor force participation. However, these gains came at a very high cost to firms: our findings suggest that the policy led to a reduced firm size, reduced productivity and output of exporting firms, increased wage bill, increased share of low-skilled Saudi workers, and higher firm exit rates.},
	author = {Cortes, Patricia and Semiray Kasoolu and Pan, Carolina}
}
@article {1511937,
	title = {Air Transportation and Regional Economic Development: A Case Study for the New Airport in South Albania},
	year = {2020},
	abstract = {
	Considering the case of the proposed airport in Vlora, South Albania, this report analyzes the channels through which a new greenfield airport can contribute to regional economic development. In December 2019, the Government of Albania opened a call for offers to build a new airport in the south of the country. While there is evidence indicating that the airport could be commercially viable, this does not provide a grounded perspective on the channels by which the airport could boost the regional economy. To evaluate how the new airport would interact with existing and potential economic activities, this report evaluates three of the most important channels of impact by which the airport could serve as a promoter: (1) economic activities directly related to or promoted by airports, (2) the airport{\textquoteright}s potential contribution to the region{\textquoteright}s booming tourism sector and (3) the potential for the country{\textquoteright}s development of air freight as a tool for export promotion. In each of these three cases, the report identifies complementary public goods or policies that could maximize the airport{\textquoteright}s impact in the region.



	The operation of the airport itself could stimulate a series of economic activities directly related to air traffic services. Airports have the ability to mold the economic structure of the places immediately around them, acting both as a consumer and as a supplier of air transport services. Not only activities related to transportation and logistics thrive around airports, but also a variety of manufacturing, trade and construction industries. Nevertheless, the agglomeration benefits of a successful aerotropolis are not guaranteed by the construction of an airport. For South Albania{\textquoteright}s new airport to actualize its potential returns, integrated planning of the airport site will be required, with focus on real estate planification and provision of complementary infrastructure.



	Establishing an airport in Vlora has the potential to spur regional development in South Albania through facilitating the growth of the tourism sector and its related activities. Albania{\textquoteright}s tourism industry has seen strong growth in the last two decades, but still lags behind its potential. Albania only has a strong penetration in the tourism market of its neighboring markets, and the high seasonality of the tourism season further limits the sector{\textquoteright}s growth. The establishment of an airport in South Albania would ease some of the tourism industry constraints tied to transportation into the country and region. Given the high reliance of the tourism industry on its many complementary inputs, more than one area of concern may have to be addressed for the impact of the new airport to be maximized. Facilitating transportation access around the South Albania region and specifically to tourist sites; preparing natural and cultural heritage sites for tourism use and expanding tourism infrastructure to accommodate potential growth are some of the interventions analyzed.



	Airfreight infrastructure could in theory provide opportunities to improve the competitiveness of Albanian exports but developing a successful air cargo cluster is no simple task. An airport can facilitate an alternative mode of transport for specific types of goods and hence promote a country{\textquoteright}s exports. In Albania{\textquoteright}s case, not only existing textile and agriculture products could be competitively exported through air freight, but also air freight itself could improve Albania{\textquoteright}s position to diversify into {\textquotedblleft}nearby{\textquotedblright} industries, identified by the theory of Economic Complexity. Nevertheless, an effective air freight strategy does not and cannot uniquely depend on the simple availability of a nearby airport. Air cargo operations require both traffic volume that Albania may not be able to provide, as well as complementary cargo-specific infrastructure. Although the potential for air freight in South Albania could be high, it is by no means a safe bet nor does it imply with certainty significant impact in the immediate future.

},
	author = {Gadgin Matha, Shreyas and Goldstein, Patricio and Lu, Jessie}
}
@article {1502581,
	title = {Specificity of Human Capital: An Occupation Space Based on Job-to-Job Transitions},
	year = {2020},
	note = {Revised May 2020.},
	abstract = {Using job transition data from Argentina{\textquoteright}s Household Survey, we document the extent to which human capital is specific to occupations and activities. Based on workers{\textquoteright} propensity to move between occupations/industries, we build Occupation and Industry Spaces to illustrate job similarities, and we compute an occupation and industry similarity measures that, in turn, we use to explain wage transition dynamics. We show that our similarity measures influence positively post-transition wages. Inasmuch as wages capture a worker{\textasciiacute}s marginal productivity and this productivity reflects the degree to which a worker matches the job{\textquoteright}s skill demand, our results indicate that a worker{\textasciiacute}s human capital is specific to both occupation and activity: closer occupations share similar skill demands and task composition (in other words, demand similar workers) and imply a smaller human capital loss in the event of a transition.},
	author = {Eduardo Levy-Yeyati and Montane, Martin}
}
@article {1502372,
	title = {Gender Differences in Professional Career Dynamics: New Evidence from a Global Law Firm},
	year = {2020},
	abstract = {
	We examine gender gaps in career dynamics in the legal sector using rich panel data from one of the largest global law firms in the world. The law firm studied is representative of multinational law firms and operates in 23 countries. The sample includes countries at different stages of development. We document the cross-country variation in gender gaps and how these gaps have changed over time. We show that while there is gender parity at the entry level in most countries by the end of the period examined, there are persistent raw gender gaps at the top of the organization across all countries. We observe significant heterogeneity among countries in terms of gender gaps in promotions and wages, but the gaps that exist appear to be declining over the period studied. We also observe that women are more likely to report exiting the firm for family and work-life balance reasons, while men report leaving for career advancement. Finally, we show that various measures of national institutions and culture appear to play a role in the differential labor-market outcomes of men and women.

},
	author = {Ganguli, Ina and Hausmann, Ricardo and Viarengo, Martina}
}
@article {1500970,
	title = {Quality Differentiation, Comparative Advantage, and International Specialization Across Products},
	year = {2020},
	abstract = {
	We introduce quality differentiation into a Ricardian model of international trade. We show that (1) quality differentiation allows industrialized countries to be active across the full board of products, complex and simple ones, while developing countries systematically specialize in simple products, in line with novel stylized facts. (2) Quality differentiation may thus help to explain why richer countries tend to be more diversified and why, increasingly over time, rich and poor countries tend to export the same products. (3) Quality differentiation implies that the gains from inter-product trade mostly accrue to developing countries. (4) Guided by our theory, we use a censored regression model to estimate the link between a country{\textquoteright}s GDP per capita and its export quality. We find a much stronger relationship than when using OLS, in line with our theory.

},
	author = {Schetter, Ulrich}
}
@article {1493729,
	title = {Does Birthplace Diversity Affect Economic Complexity? Cross-country Evidence},
	year = {2020},
	abstract = {We empirically investigate the relationship between a country{\textquoteright}s economic complexity and the diversity in the birthplaces of its immigrants. Our cross-country analysis suggests that countries with higher birthplace diversity by one standard deviation are more economically complex by 0.1 to 0.18 standard deviations above the mean. This holds particularly for diversity among highly educated migrants and for countries at intermediate levels of economic complexity. We address endogeneity concerns by instrumenting diversity through predicted stocks from a pseudo-gravity model as well as from a standard shift-share approach. Finally, we provide evidence suggesting that birthplace diversity boosts economic complexity by increasing the diversification of the host country{\textquoteright}s export basket.},
	author = {Dany Bahar and Rapoport, Hillel and Turati, Riccardo}
}
@article {1489579,
	title = {Migrant Inventors and the Technological Advantage of Nations},
	year = {2020},
	abstract = {We investigate the relationship between the presence of migrant inventors and the dynamics of innovation in the migrants{\textquoteright} receiving countries. We find that countries are 25 to 60 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies. For the average country in our sample, this number corresponds to only 25 inventors and a standard deviation of 135. We deal with endogeneity concerns by using historical migration networks to instrument for stocks of migrant inventors. Our results generalize the evidence of previous studies that show how migrant inventors "import" knowledge from their home countries, which translates into higher patenting in the receiving countries. We interpret these results as tangible evidence of migrants facilitating the technology-specific diffusion of knowledge across nations.},
	author = {Dany Bahar and Choudhury, Prithwiraj and Rapoport, Hillel}
}
@article {1489001,
	title = {Profit Sharing, Industrial Upgrading, and Global Supply Chains: Theory and Evidence},
	year = {2020},
	note = {Revised May 2020.},
	abstract = {This paper constructed a simple model to illustrate the global supply chain profit sharing and industrial upgrading mechanism, from which it was found that the average profitability distribution in the different supply chain stages was determined by two main factors: (1) the average product of the labor in the firms at each production stage; and (2) the ratio of the output elasticity of capital to the output elasticity of labor in each stage. This paper also proposed a new industrial upgrading mechanism, the {\textquoteleft}inter-supply chain upgrading{\textquoteright}, for supply chain firms. Rises in production complexity and increased factor intensity in each production stage were found to be the two essential conditions for the inter-supply chain upgrading. The empirical study results were found to be broadly consistent with the proposed theories.},
	author = {Shen, Jim H. and Liu, XiaoJi and Liu, Haiyue and Liu, ShiYi and Lee, Chien-Chiang}
}
@article {1487760,
	title = {You Get What You Pay for: Sources and Consequences of the Public Sector Premium in Albania and Sri Lanka},
	year = {2020},
	abstract = {We study the factors behind the public sector premium in Albania and Sri Lanka, the group heterogeneity in the premium, the sources of public sector wage compression, and the impact of this compression on the way individuals self-select between the public and the private sector. Similar to other countries, the public sectors in Albania and Sri Lanka pay higher wages than the private sector, for all but the most valued employees. While half of the premium of Sri Lanka and two-thirds of it in Albania are explained by differences in the occupation-education-experience mix between the sectors, and the level of private sector informality, the unexplained part of the premium is significant enough to affect the preferences of working in the public sector for different groups. We show that the compressed distributions of public sector wages and benefits create incentives for positive sorting into the public sector among most employees, and negative sorting among the most productive ones.Listen to\&nbsp;a podcast with author Ljubica Nedelkoska as she\&nbsp;discusses the factors behind public sector wage premiums.\&nbsp;},
	author = {Hausmann, Ricardo and Ljubica Nedelkoska and Noor, Sehar}
}
@article {1479791,
	title = {Smart Development Banks},
	journal = {Journal of Industry, Competition and Trade},
	volume = {19},
	number = {69},
	year = {2020},
	abstract = {The conventional paradigm about development banks is that these institutions exist to target well-identified market failures. However, market failures are not directly observable and can only be ascertained with a suitable learning process. Hence, the question is how do the policymakers know what activities should be promoted; how do they learn about the obstacles to the creation of new activities? Rather than assuming that the government has arrived at the right list of market failures and uses development banks to close some well-identified market gaps, we suggest that development banks can be in charge of identifying these market failures through their loan-screening and lending activities to guide their operations and provide critical inputs for the design of productive development policies. In fact, they can also identify government failures that stand in the way of development and call for needed public inputs. This intelligence role of development banks is similar to the role that modern theories of financial intermediation assign to banks as institutions with a comparative advantage in producing and processing information. However, while private banks focus on information on private returns, development banks would potentially produce and organize information about social returns.},
	url = {https://doi.org/10.1007/s10842-019-00328-x},
	author = {Fernandez-Arias, Eduardo and Hausmann, Ricardo and Ugo Panizza}
}
@article {1479372,
	title = {Machine-learned patterns suggest that diversification drives economic development},
	journal = {Journal of the Royal Society Interface},
	volume = {17},
	number = {162},
	year = {2020},
	abstract = {We combine a sequence of machine-learning techniques, together called Principal Smooth-Dynamics Analysis (PriSDA), to identify patterns in the dynamics of complex systems. Here, we deploy this method on the task of automating the development of new theory of economic growth. Traditionally, economic growth is modelled with a few aggregate quantities derived from simplified theoretical models. PriSDA, by contrast, identifies important quantities. Applied to 55 years of data on countries{\textquoteright} exports, PriSDA finds that what most distinguishes countries{\textquoteright} export baskets is their diversity, with extra weight assigned to more sophisticated products. The weights are consistent with previous measures of product complexity. The second dimension of variation is proficiency in machinery relative to agriculture. PriSDA then infers the dynamics of these two quantities and of per capita income. The inferred model predicts that diversification drives growth in income, that diversified middle-income countries will grow the fastest, and that countries will converge onto intermediate levels of income and specialization. PriSDA is generalizable and may illuminate dynamics of elusive quantities such as diversity and complexity in other natural and social systems.},
	url = {https://doi.org/10.1098/rsif.2019.0283},
	author = {Andres Gomez and Hausmann, Ricardo and Matthew H. Bonds and Brummitt, Charles D.}
}
@inbook {1561672,
	title = {Hiperinflaci{\'o}n y cambios pol{\'\i}ticos: Democracia, transiciones en el poder y resultados econ{\'o}micos},
	booktitle = {Inflaci{\'o}n e Hiperinflaci{\'o}n: Miradas, lecciones y desaf{\'\i}os para Venezuela},
	year = {2019},
	pages = {185-207},
	publisher = {Abediciones (UCAB)},
	organization = {Abediciones (UCAB)},
	address = {Caracas},
	author = {Douglas Barrios and Miguel Santos},
	editor = {Leonardo Vera and Jose Guerra}
}
@article {1479385,
	title = {A Roadmap for Investment Promotion and Export Diversification: The Case of Jordan},
	year = {2019},
	note = {Revised March 2020},
	abstract = {Jordan faces a number of pressing economic challenges: low growth, high unemployment, rising debt levels, and continued vulnerability to regional shocks. After a decade of fast economic growth, the economy decelerated with the Global Financial Crisis of 2008-09. From then onwards, various external shocks have thrown its economy out of balance and prolonged the slowdown for over a decade now. Conflicts in neighboring countries have led to reduced demand from key export markets and cut off important trade routes. Foreign direct investment, which averaged 12.7\% of gross domestic product (GDP) between 2003-2009, fell to 5.1\% of GDP over the 2010-2017. Regional conflicts have interrupted the supply of gas from Egypt {\textendash} forcing Jordan to import oil at a time of record prices, had a negative impact on tourism, and also provoked a massive influx of migrants and refugees. Failure to cope with 50.4\% population growth between led to nine consecutive years (2008-2017) of negative growth rates in GDP per capita, resulting in a cumulative loss of 14.0\% over the past decade (2009-2018). Debt to GDP ratios, which were at 55\% by the end of 2009, have skyrocketed to 94\%.Over the previous five years Jordan has undertaken a significant process of fiscal consolidation. The resulting reduction in fiscal impulse is among the largest registered in the aftermath of the Financial Crises, third only to Greece and Jamaica, and above Portugal and Spain. Higher taxes, lower subsidies, and sharp reductions in public investment have in turn furthered the recession. Within a context of lower aggregate demand, more consolidation is needed to bring debt-to-GDP ratios back to normal. The only way to break that vicious cycle and restart inclusive growth is by leveraging on foreign markets, developing new exports and attracting investments aimed at increasing competitiveness and strengthening the external sector. The theory of economic complexity provides a solid base to identify opportunities with high potential for export diversification. It allows to identify the existing set of knowhow, skills and capacities as signaled by the products and services that Jordan is able to make, and to define existing and latent areas of comparative advantage that can be developed by redeploying them. Service sectors have been growing in importance within the Jordanian economy and will surely play an important role in export diversification. In order to account for that, we have developed an adjusted framework that allows to identify the most attractive export sectors including services.Based on that adjusted framework, this report identifies export themes with a high potential to drive growth in Jordan while supporting increasing wage levels and delivering positive spillovers to the non-tradable economy. The general goal is to provide a roadmap with key elements of a strategy for Jordan to return to a high economic growth path that is consistent with its emerging comparative advantages.},
	author = {Hausmann, Ricardo and Goldstein, Patricio and Ana Grisanti and T. O{\textquoteright}Brien and Jorge Tapia and Miguel Angel Santos}
}
@article {1476713,
	title = {The Value of Complementary Coworkers},
	journal = {Science Advances},
	volume = {5},
	number = {12},
	year = {2019},
	abstract = {
	As individuals specialize in specific knowledge areas, a society{\textquoteright}s know-how becomes distributed across different workers. To use this distributed know-how, workers must be coordinated into teams that, collectively, can cover a wide range of expertise. This paper studies the interdependencies among co-workers that result from this process in a population-wide dataset covering educational specializations of millions of workers and their co-workers in Sweden over a 10-year period. The analysis shows that the value of what a person knows depends on whom that person works with. Whereas having co-workers with qualifications similar to one{\textquoteright}s own is costly, having co-workers with complementary qualifications is beneficial. This co-worker complementarity increases over a worker{\textquoteright}s career and offers a unifying framework to explain seemingly disparate observations, answering questions such as {\textquotedblleft}Why do returns to education differ so widely?{\textquotedblright} {\textquotedblleft}Why do workers earn higher wages in large establishments?{\textquotedblright} {\textquotedblleft}Why are wages so high in large cities?{\textquotedblright}



	Additional resources: Website |\&nbsp;Podcast\&nbsp;| Video | Media Release

},
	url = {https://advances.sciencemag.org/content/5/12/eaax3370},
	author = {Neffke, Frank}
}
@article {1476450,
	title = {Skill Mismatch and Skill Transferability: Review of Concepts and Measurements},
	journal = {Papers in Evolutionary Economic Geography},
	volume = {19},
	number = {21},
	year = {2019},
	abstract = {The notion of skills plays an increasingly important role in a variety of research fields. Since the foundational work on human capital theory, economists have approached skills through the lens of education, training and work experience, whereas early work in evolutionary economics and management stressed the analogy between skills of individuals and the organizational routines of firms. We survey how the concept of skills has evolved into notions such as skills mismatch, skill transferability and skill distance or skill relatedness in labor economics, management, and evolutionary approaches to economics and economic geography. We find that these disciplines converged in embracing increasingly sophisticated approaches to measuring skills. Economists have expanded their approach from quantifying skills in terms of years of education to measuring them more directly, using skill tests, self-reported skills and job tasks, or skills and job tasks reported by occupational experts. Others have turned to administrative and other large-scale data sets to infer skill similarities and complementarities from the careers of sometimes millions of workers. Finally, a growing literature on team human capital and skill complementarities has started thinking of skills as features of collectives, instead of only of individuals. At the same time, scholars in corporate strategy have studied the micro-determinants of team formation. Combined, the developments in both strands of research may pave the way to an understanding of how individual-level skills connect to firm-level routines.},
	url = {http://econ.geo.uu.nl/peeg/peeg1921.pdf},
	author = {Ljubica Nedelkoska and Neffke, Frank}
}
@article {1474500,
	title = {Taxation, Innovation, and Entrepreneurship},
	journal = {The Economic Journal},
	volume = {129},
	number = {620},
	year = {2019},
	pages = {1731-1781},
	abstract = {We explore optimal and politically feasible growth policies consisting of basic research investments and taxation. We show that the impact of basic research on the general economy rationalises a taxation pecking order with high labour taxes and low profit taxes. This scheme induces a significant proportion of agents to become entrepreneurs, thereby rationalising substantial investments in basic research fostering their innovation prospects. These entrepreneurial economies, however, may make a majority of workers worse off, giving rise to a conflict between efficiency and equality. We discuss ways of mitigating this conflict, and thus strengthening political support for growth policies.},
	url = {https://doi.org/10.1111/ecoj.12588},
	author = {Schetter, Ulrich and Gersbach, Hans and Schneider, Maik T.}
}
@article {1472388,
	title = {Migration and Post-conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia},
	year = {2019},
	abstract = {During the early 1990s Germany offered temporary protection to over 700,000 Yugoslavian refugees fleeing war. By 2000, many had been repatriated. We exploit this natural experiment to investigate the role of migrants in post-conflict reconstruction in the former Yugoslavia, using exports as outcome. Using confidential social security data to capture intensity of refugee workers to German industries{\textendash}and exogenous allocation rules for asylum seekers within Germany as instrument{\textemdash}we find an elasticity of exports to return migration between 0.08 to 0.24. Our results are stronger in knowledge-intensive industries and for workers in occupations intensive in analytical and managerial skills.},
	author = {Dany Bahar and Hauptmann, Andreas and {\"O}zg{\"u}zel, Cem and Rapoport, Hillel}
}
@article {1472181,
	title = {A Structural Ranking of Economic Complexity},
	year = {2019},
	abstract = {We propose a structural alternative to the Economic Complexity Index (ECI, Hidalgo and Hausmann 2009; Hausmann et al. 2011) that ranks countries by their complexity. This ranking is tied to comparative advantages. Hence, it reveals information different from GDP per capita on the deep underlying economic capabilities of countries. Our analysis proceeds in three main steps: (i) We first consider a simplified trade model that is centered on the assumption that countries{\textquoteright} global exports are log-supermodular (Costinot, 2009a), and show that a variant of the ECI correctly ranks countries (and products) by their complexity. This model provides a general theoretical framework for ranking nodes of a weighted (bipartite) graph according to some under- lying unobservable characteristic. (ii) We then embed a structure of log-supermodular productivities into a multi-product Eaton and Kortum (2002)-model, and show how our main insights from the simplified trade model apply to this richer set-up. (iii) We finally implement our structural ranking of economic complexity. The derived ranking is robust and remarkably similar to the one based on the original ECI.},
	author = {Schetter, Ulrich}
}
@article {1468997,
	title = {Female Labor in Jordan: A Systematic Approach to the Exclusion Puzzle},
	year = {2019},
	abstract = {
	Women in Jordan are excluded from labor market opportunities at among the highest rates in the world. Previous efforts to explain this outcome have focused on specific, isolated aspects of the problem and have not exploited available datasets to test across causal explanations. We develop a comprehensive framework to analyze the drivers of low female employment rates in Jordan and systematically test their validity, using micro-level data from Employment and Unemployment Surveys (2008-2018) and the Jordanian Labor Market Panel Survey (2010-2016). We find that the nature of low female inclusion in Jordan{\textquoteright}s labor market varies significantly with educational attainment, and identify evidence for different factors affecting different educational groups. Among women with high school education or less, we observe extremely low participation levels and find the strongest evidence for this phenomenon tracing to traditional social norms and poor public transportation. On the higher end of the education spectrum {\textendash} university graduates and above {\textendash} we find that the problem is not one of participation, but rather of unemployment, which we attribute to a small and undiversified private sector that is unable to accommodate women{\textquoteright}s needs for work and work-family balance.



	Listen to a podcast interview with author Semiray Kasoolu about\&nbsp;her research on women and labor force exclusion in Jordan.\&nbsp;

},
	author = {Semiray Kasoolu and Hausmann, Ricardo and T. O{\textquoteright}Brien and Miguel Angel Santos}
}
@article {1464939,
	title = {Social Mobility Explains Populism, Not Inequality or Culture},
	year = {2019},
	note = {Revised May 2021},
	abstract = {
	What explains contemporary developed-world populism? A largely-overlooked hypothesis, advanced herein, is economic unfairness. This idea holds that humans do not simply care about the magnitudes of final outcomes such as losses or inequalities. They care deeply about whether each individual{\textquoteright}s economic outcomes occur for fair reasons. Thus citizens turn to populism when they do not get the economic opportunities and outcomes they think they fairly deserve. A series of cross-sectional regressions show that low social mobility {\textendash} an important type of economic unfairness {\textendash} consistently correlates with the geography of populism, both within and across developed countries. Conversely, income and wealth inequality do not; and neither do the prominent cultural hypotheses of immigrant stocks, social media use, nor the share of seniors in the population. Collectively, this evidence underlines the importance of economic fairness, and suggests that academics and policymakers should pay greater attention to normative, moral questions about the economy.

},
	author = {Protzer, Eric S. M.}
}
@article {1464927,
	title = {Tax Avoidance in Buenos Aires: The Case of Ingresos Brutos},
	year = {2019},
	abstract = {This study presents evidence of tax avoidance in Buenos Aires, Argentina. I exploit a break in the tax scheme of the most controversial tax, Ingresos Brutos (gross income), between the city and the greater area, which are otherwise identical law and regulation-wise for the studied population. When possible, workers would rather travel longer distances to their jobs than face the tax burden. Given that this type of avoidance is costly, results suggest that Ingresos Brutos might be acting as a binding constraint to growth for businesses.},
	author = {Pan, Carolina Ines}
}
@article {1462609,
	title = {Converge and European Value Chains: How Deep Integration Can Reignite Convergence in the EU},
	year = {2019},
	abstract = {Convergence, the process by which poorer countries {\textquoteleft}catch-up{\textquoteright} to rich ones in terms of real incomes, is at the core of the promise of the European Union and the Eurozone. It was enshrined in the founding treaty of the EU and is at the center of policy-making today. However, after several decades of strong European growth, convergence across many core countries has come to a halt. Policymaking has focused on promoting greater integration between EU countries and in particular within the Eurozone to foster further convergence but the political gridlock has stopped these initiatives from moving forward.\&nbsp;Further economic and political integration is not necessary for, and may in fact be orthogonal to, greater convergence in the EU. EU countries have converged at roughly the same rate as non-EU countries since the 1950s, suggesting EU membership is not responsible for convergence. Further, there is no statistically significant difference in the rate of convergence between EA 12 or EA19 members before and after the introduction of the Euro. Finally, many current Eurozone members have converged in the last 10 years suggesting that the Euro structure does not impede convergence. Still, further integration may be desirable in the EU {\textendash} not least to restore the union to its democratic ideals.\&nbsp;The only variable that is associated with greater convergence in European countries is value chain integration, particularly upstream integration. Upstream integration is domestic value added embodied in intermediate exports that are re-processed abroad. High upstream integration indicates strong participation in value chains and integration into regional production networks. The level of upstream integration varies tremendously within the EU, going from 10\% of GDP in Spain to 28\% of GDP in Estonia. Once we control for the level of upstream integration, the rate of converge in European countries goes from 1.25\% to 4.5\%.\&nbsp;High growth countries are deeply integrated in sub-regional supply chains within Europe. Europe is often thought of as a single supply chain but, in fact, there are several sub-regional supply chains within Europe. These sub-regional supply chains are based on strong bilateral ties between neighboring countries. Participation in one of these supply chains appears to matter more for growth than integration with any particular country (e.g. Germany) or to any specific region. Participation in these supply chains is independent of EU membership {\textendash} it is due to historical ties and deliberate national policymaking.\&nbsp;The EU must put cross-country collaboration at the core Horizon Europe{\textendash} its {\texteuro}100B mission driven innovation programme {\textendash} to future-proof European supply chains and reintegrate lagging countries. Horizon Europe is the EU{\textquoteright}s bet to become a global technology leader. Leading in technology involves not only innovation but also developing the supply chains of the future that allow innovation to be commercially successful. Horizon Europe will not succeed if innovation spending continues occur in national siloes as it did in the Horizon 2020 programme. The EU must pro-actively manage and integrate innovation efforts across the Union and ensure that commercialization occurs at the EU level. Only then can we hope to achieve both EU technological leadership and convergence within the EU.\&nbsp;},
	author = {Rama, Marisa}
}
@article {1457302,
	title = {Putting Global Governance in its Place},
	year = {2019},
	abstract = {In a world economy that is highly integrated, most policies produce effects across the border. This is often believed to be an argument for greater global governance, but the logic requires scrutiny. There remains strong revealed demand for policy and institutional diversity among nations, rooted in differences in historical, cultural, or development trajectories. The canonical case for global governance is based on two set of circumstances. The first occurs when there is global public good (GPG) and the second under {\textquotedblleft}beggar-thy-neighbor{\textquotedblright} (BTN) policies. However, the world economy is not a global commons, and virtually no economic policy has the nature of a global public good (or bad). And while there are some important BTN policies, much of our current discussions deal with policies that are not true BTNs. The policy failures that exist arise not from weaknesses of global governance, but from distortions of domestic governance. As a general rule, these domestic failures cannot be fixed through international agreements or multilateral cooperation. The paper closes by discussing an alternative model of global governance called {\textquotedblleft}democracy-enhancing global governance.{\textquotedblright}},
	author = {Rodrik, Dani}
}
@article {1448567,
	title = {What Works for Active Labor Market Policies?},
	year = {2019},
	abstract = {The past 5 years have witnessed a flurry of RCT evaluations that shed new light on the impact and cost effectiveness of Active Labor Market Policies (ALMPs) aiming to improve workers{\textasciiacute} access to new jobs and better wages. We report the first systematic review of 102 RCT interventions comprising a total of 652 estimated impacts. We find that (i) a third of these estimates are positive and statistically significant (PPS) at conventional levels; (ii) programs are more likely to yield positive results when GDP growth is higher and unemployment lower; (iii) programs aimed at building human capital, such as vocational training, independent worker assistance and wage subsidies, show significant positive impact, and (iv) program length, monetary incentives, individualized follow up and activity targeting are all key features in determining the effectiveness of the interventions.},
	author = {Eduardo Levy-Yeyati and Montan{\'e}, Mart{\'\i}n and Sartorio, Luca}
}
@inbook {1446416,
	title = {Is There Life After Ford?},
	booktitle = {City Design, Planning \& Policy Innovations: The Case of Hermosillo},
	year = {2019},
	pages = {131-53},
	publisher = {Inter-American Development Bank},
	organization = {Inter-American Development Bank},
	abstract = {
	This publication summarizes the outcomes and lessons learned from the Fall 2017 course titled {\textquotedblleft}Emergent Urbanism: Planning and Design Visions for the City of Hermosillo, Mexico{\textquotedblright} (ADV-9146). Taught by professors Diane Davis and Felipe Vera, this course asked a group of 12 students to design a set of projects that could lay the groundwork for a sustainable future for the city of Hermosillo{\textemdash}an emerging city located in northwest Mexico and the capital of the state of Sonora. Part of a larger initiative funded by the Inter-American Development Bank and the North-American Development Bank in collaboration with Harvard University, ideas developed for this class were the product of collaboration between faculty and students at the Graduate School of Design, the Kennedy School{\textquoteright}s Center for International Development and the T.H. Chan School of Public Health.



	Written by Miguel Angel Santos and Douglas Barrios{\textemdash}two Growth Lab research fellows{\textemdash}the fourth chapter titled {\textquotedblleft}Is There Life After Ford?{\textquotedblright} focuses on Hermosillo{\textquoteright}s economic competitiveness and, specifically, the reasons behind the city{\textquoteright}s economic stagnation. It sees the city{\textquoteright}s overreliance on the automobile industry as a primary concern. Based on two methodologies developed at the Growth Lab{\textemdash}the Growth Diagnostic and the Economic Complexity Analysis{\textemdash}this piece proposes alternative pathways for Hermosillo{\textquoteright}s future economic growth.

},
	url = {http://dx.doi.org/10.18235/0001755},
	author = {Douglas Barrios and Miguel Angel Santos}
}
@report {1441543,
	title = {Research Note: "One Village One Product" Programs},
	year = {2019},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {The One Village, One Product (OVOP) movement started 40 years ago in a rural Japanese prefecture, with the aim of helping small villages and towns develop by focusing on their local culture and resources. Since then the principles of the OVOP movement have spread to other countries, including Thailand, Malawi, and beyond. The varying levels of success across these different versions of OVOP suggest some lessons on how to best organize rural development programs that could be useful as the Albanian government embarks on its flagship 100+ Villages project.},
	author = {Stock, Daniel and Bruno Zuccolo}
}
@article {1439004,
	title = {The Cost of Holding Foreign Exchange Reserves},
	year = {2019},
	abstract = {Recent studies that have emphasized the costs of accumulating reserves for self-insurance purposes have overlooked two potentially important side-effects. First, the impact of the resulting lower spreads on the service costs of the stock of sovereign debt, which could substantially reduce the marginal cost of holding reserves. Second, when reserve accumulation reflects countercyclical LAW central bank interventions, the actual cost of reserves should be measured as the sum of valuation effects due to exchange rate changes and the local-to-foreign currency exchange rate differential (the inverse of a carry trade profit and loss total return flow), which yields a cost that is typically smaller than the one arising from traditional estimates based on the sovereign credit risk spreads. We document those effects empirically to illustrate that the cost of holding reserves may have been considerably smaller than usually assumed in both the academic literature and the policy debate.},
	author = {Eduardo Levy-Yeyati and Gomez, J-F}
}
@article {1437408,
	title = {How ETFs Amplify the Global Financial Cycle in Emerging Markets},
	year = {2019},
	abstract = {Since the early 2000s exchange-traded funds (ETFs) have grown to become an important in- vestment vehicle worldwide. In this paper, we study how their growth affects the sensitivity of international capital flows to the global financial cycle. We combine comprehensive fund- level data on investor flows with a novel identification strategy that controls for unobservable time-varying economic conditions at the investment destination. For dedicated emerging mar- ket funds, we find that the sensitivity of investor flows to global financial conditions for equity (bond) ETFs is 2.5 (2.25) times higher than for equity (bond) mutual funds. In turn, we show that in countries where ETFs hold a larger share of financial assets, total cross-border equity flows and prices are significantly more sensitive to global financial conditions. We conclude that the growing role of ETFs as a channel for international capital flows amplifies the global financial cycle in emerging markets.},
	author = {Eduardo Levy-Yeyati}
}
@article {1436132,
	title = {Empleo Femenino en las Ciudades Colombianas: Un M{\'e}todo de Descripci{\'o}n Estad{\'\i}stica},
	year = {2019},
	abstract = {Este trabajo propone una metodolog{\'\i}a de descomposici{\'o}n estad{\'\i}stica para describir enforma coherente las dimensiones del empleo femenino seg{\'u}n la estructura del mercadolaboral y seg{\'u}n la estructura productiva de las ciudades. La metodolog{\'\i}a se utilizapara analizar el empleo femenino {\textquotedblleft}pleno y decente{\textquotedblright} en 23 ciudades colombianas entre2008 y 2016. Seg{\'u}n la estructura laboral, se encuentra que la brecha de g{\'e}nero en elempleo pleno y decente se debe a diferencias en la participaci{\'o}n laboral y en laformalidad del empleo, m{\'a}s que a diferencias entre hombres y mujeres en el desempleoo en la dedicaci{\'o}n al empleo. Seg{\'u}n la estructura productiva, se encuentra que laorientaci{\'o}n por sexo y la composici{\'o}n del empleo sectorial de las ciudades tieneninfluencia modesta en las diferencias entre ciudades en la generaci{\'o}n de empleofemenino pleno y decente, ya que {\'e}stas resultan sobre todo de las diferencias en lacapacidad de generaci{\'o}n de para ambos sexos. La metodolog{\'\i}a tambi{\'e}n se usa paraanalizar los cambios en el per{\'\i}odo. Se sugieren posibles extensiones de la metodolog{\'\i}apropuesta e implicaciones para futuras investigaciones.- - -Female Employment in Colombian Cities: A Method of Statistical DescriptionThis paper proposes a methodology of statistical decomposition to describe in acoherent way the dimensions of female employment according to the structure of thelabor market and according to the productive structure of cities. The methodology isused to analyze "full and decent" female employment in 23 Colombian cities between2008 and 2016. According to the labor structure, it is found that the gender gap in fulland decent employment is due to differences in labor participation and in theformality of employment, rather than differences between men and women inunemployment or dedication to employment. According to the productive structure, itis found that the orientation by sex and the composition of sectoral employment incities have a modest influence on the differences between cities in the generation of fulland decent female employment, since these are mainly the result of differences incities{\textquoteright} capacities to generate employment for both sexes. The methodology is also usedto analyze changes in the period. Potential extensions of the proposed methodologyand implications for future research are suggested.},
	author = {Eduardo Lora}
}
@article {1436110,
	title = {Forecasting Formal Employment in Cities},
	year = {2019},
	abstract = {Can {\textquotedblleft}full and productive employment for all{\textquotedblright} be achieved by 2030 as envisaged by the United Nations Sustainable Development Goals? This paper assesses the issue for the largest 62 Colombian cities using social security administrative records between 2008 and 2015, which show that the larger the city, the higher its formal occupation rate. This is explained by the fact that formal employment creation is restricted by the availability of the diverse skills needed in complex sectors. Since skill accumulation is a gradual path-dependent process, future formal employment by city can be forecasted using either ordinary least square regression results or machine learning algorithms. The results show that the share of working population in formal employment will increase between 13 and nearly 32 percent points between 2015 and 2030, which is substantial but still insufficient to achieve the goal. Results are broadly consistent across methods for the larger cities, but not the smaller ones. For these, the machine learning method provides nuanced forecasts which may help further explorations into the relation between complexity and formal employment at the city level.},
	author = {Eduardo Lora}
}
@article {1433142,
	title = {Smart Development Banks},
	year = {2019},
	abstract = {The conventional paradigm about development banks is that these institutions exist to target well-identified market failures. However, market failures are not directly observable and can only be ascertained with a suitable learning process. Hence, the question is how do the policymakers know what activities should be promoted, how do they learn about the obstacles to the creation of new activities? Rather than assuming that the government has arrived at the right list of market failures and uses development banks to close some well-identified market gaps, we suggest that development banks can be in charge of identifying these market failures through their loan-screening and lending activities to guide their operations and provide critical inputs for the design of productive development policies. In fact, they can also identify government failures that stand in the way of development and call for needed public inputs. This intelligence role of development banks is similar to the role that modern theories of financial intermediation assign to banks as institutions with a comparative advantage in producing and processing information. However, while private banks focus on information on private returns, development banks would potentially produce and organize information about social returns.},
	author = {Fernandez-Arias, Eduardo and Hausmann, Ricardo and Ugo Panizza}
}
@article {1430766,
	title = {Minimizing Smuggling and Restoring Public Trust in the Philippine Bureau of Customs},
	year = {2019},
	abstract = {This policy analysis attempts to answer three questions: First, what is the extent of smuggling and customs tax evasion in the Philippines? Second, how can customs improve its risk management system in the short term to minimize officers{\textquoteright} discretion and improve trade facilitation without abdicating its other mandates of revenue generation and border control? Third, what types of reforms and political commitment are necessary in the long term to restore public trust in the Bureau of Customs?},
	author = {Abante, Kenneth}
}
@article {1426932,
	title = {Exit and Foreign Ownership: Evidence from Export-Oriented Firms in Sri Lanka},
	year = {2019},
	abstract = {While foreign direct investment may play a transformative role in the development of economies, foreign-owned firms are also said to be more {\textquotedblleft}footloose{\textquotedblright} than comparable local firms. This paper uses a semi-parametric approach to examine the link between firm ownership and exit rates, tracking a set of export-oriented firms operating in Sri Lanka in years between 1978 and 2017. We find that foreign firms are in fact 42-56\% more likely to exit than local firms, but only for their first years of existence. In their later years, foreign firms are actually less likely to exit than local firms, though this late advantage is not statistically significant when conditioned on the firms{\textquoteright} initial characteristics (such as employment size). This pattern supports the theory that foreign firms face a steeper early learning curve in adapting to local conditions.},
	author = {Stock, Daniel}
}
@article {1426589,
	title = {Globalization and Protectionism: AMLO{\textquoteright}s 2006 Presidential Run},
	year = {2019},
	abstract = {We study the effects of local tariff drops for Mexican exports to the US on the local electoral performance of Andr{\'e}s Manuel L{\'o}pez Obrador (AMLO) in Mexico{\textquoteright}s 2006 presidential election. In an effort to appeal to his rural base, AMLO proposed to unilaterally retain tariff exemptions on imported corn and beans, which were scheduled to drop under NAFTA by the end of 2008. This elevated protectionism in the public agenda during the campaign. We find that local economic gains due to export tariff drops under NAFTA between 1994 and 2001 led to a drop in AMLO{\textquoteright}s local vote share gains in 2006. These effects are contingent to the 2006 election, as similar effects on local vote for the left are not found in previous or later elections. Results are robust to controls for local grain growing and Chinese competition. We predict that AMLO would have been elected in 2006 had protectionism not been a salient electoral issue. Our findings suggest export access gains due to globalization undermine local political preferences over national protectionist platforms.},
	author = {Sebasti{\'a}n Bustos and Jos{\'e} Ram{\'o}n Morales}
}
@article {1425508,
	title = {Production Ability and Economic Growth},
	year = {2019},
	abstract = {Production is shaped by capability requirements of products and availability of these capabilities across locations. We propose a capabilities based production model and an empirical strategy to measure product sophistication and location{\textquoteright}s production ability. We apply our framework to international trade data, and employment data in the US, recovering measures of production ability for countries and cities, and sophistication of products and industries. We show that both country and city level measures have a strong correlation with income, and economic growth at different time horizons. Product sophistication is positively correlated with measures like education and training needed in the industry. Our model-based estimations also predict the diversification patterns through the extensive margin.},
	author = {Sebastian Bustos and Muhammed A. Y{\i}ld{\i}r{\i}m}
}
@article {1425490,
	title = {The Impact of the Mexican Drug War on Trade},
	year = {2019},
	abstract = {This paper studies the unintended economic consequences of increases in violence following the Mexican Drug War. We study the effects on exports in municipalities with different levels of exposure to violence after the policy. A focus on exports allows us to control for demand shocks by comparing exports of the same product to the same country of destination. Building on the close elections identification strategy proposed by Dell (2015), we show that municipalities that are exogenously exposed to the Drug War experience a 40\% decrease in export growth on the in- tensive margin. Large exporters suffer larger effects, along with exports of more complex, capital intensive, and skill intensive products. Finally, using firm level data, we provide evidence consistent with violence increasing marginal exporting costs.},
	author = {Jes{\'u}s Gorr{\'\i}n and Jos{\'e} Ram{\'o}n Morales A. and Bernardo Ricca}
}
@article {1423692,
	title = {Jordan: The Elements of a Growth Strategy},
	year = {2019},
	abstract = {
	In the decade 1999-2009, Jordan experienced an impressive growth acceleration, tripling its exports and increasing income per capita by 38\%. Since then, a number of external shocks that include the Global Financial Crisis (2008-2009), the Arab Spring (2011), the Syrian Civil War (2011), and the emergence of the Islamic State (2014) have affected Jordan in significant ways and thrown its economy out of balance. Jordan{\textquoteright}s debt-to-GDP ratio has ballooned from 55\% (2009) to 94\% (2018). The economy has continued to grow amidst massive fiscal adjustment and balance of payments constraints, but the large increase in population {\textendash} by 50\% between 2008 and 2017 {\textendash} driven by massive waves of refugees has resulted in a 12\% cumulative loss in income per capita (2010-2017). Moving forward, debt sustainability will require not only continued fiscal consolidation but also faster growth and international support to keep interest payments on the debt contained. We have developed an innovative framework to align Jordan{\textquoteright}s growth strategy with its changing factor endowments. The framework incorporates service industries into an Economic Complexity analysis, utilizing the Dun and Bradstreet database, together with an evaluation of the evolution of Jordan{\textquoteright}s comparative advantages over time. Combining several tools to identify critical constraints faced by sectors with the greatest potential, we have produced a roadmap with key elements of a strategy for Jordan to return to faster, more sustainable and more inclusive growth that is consistent with its emerging comparative advantages.

},
	author = {Hausmann, Ricardo and T. O{\textquoteright}Brien and Miguel Angel Santos and Ana Grisanti and Semiray Kasoolu and Nikita Taniparti and Jorge Tapia and Ricardo Villasmil}
}
@report {1293965,
	title = {Sri Lanka Growth Diagnostic},
	year = {2018},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Throughout 2016, CID conducted a growth diagnostic analysis for Sri Lanka in collaboration with the Government of Sri Lanka, led by the Prime Minister{\textquoteright}s Policy Development Office (PDO), and the Millennium Challenge Corporation (MCC). This presentation report aggregates collaborative quantitative and qualitative analysis undertaken by the research team. This analysis was originally provided to the Government of Sri Lanka in April 2017 in order to make available a record of the detailed technical work and CID{\textquoteright}s interpretations of the evidence. A written executive summary is provided here as a complement to the detailed presentation report. Both the report and the executive summary are structured as follows. First, the analysis identifies Sri Lanka{\textquoteright}s growth problem. It then presents evidence from diagnostic tests to identify what constraints are most responsible for this problem. Finally, it provides a summary of what constraints CID interprets as most binding and suggests a {\textquotedblleft}growth syndrome{\textquotedblright} that underlies the set of binding constraints.\&nbsp;



	In brief, this growth diagnostic analysis shows that economic growth in Sri Lanka is constrained by the weak growth of exports, particularly from new sectors. Compared to other countries in the region, Sri Lanka has seen virtually no diversification of exports over the last 25 years, especially in manufactured goods linked through FDI-driven, global value chains. We found several key causes behind this lack of diversified exports and FDI: Sri Lanka{\textquoteright}s ineffective land-use governance, underdeveloped industrial and transportation infrastructure, and a very high level of policy uncertainty, particularly in tax and trade policy. We believe that these issues trace back to an underlying problem of severe fragmentation in governance, with a critical lack of coordination between ministries and agencies with overlapping responsibilities and decision-making authority.



	[[{"fid":"3719217","view_mode":"default","type":"media","attributes":{"height":"1028","width":"1368","style":"width: 650px; height: 488px;","alt":"Sri Lanka{\textquoteright}s Growth Conundrum","class":"media-element file-default"}}]]



	[[{"fid":"3719218","view_mode":"default","type":"media","attributes":{"height":"1031","width":"1379","style":"width: 650px; height: 486px;","alt":"Sri Lanka Product Space Clusters","class":"media-element file-default"}}]][[{"fid":"3719219","view_mode":"default","type":"media","attributes":{"height":"1114","width":"1600","style":"width: 650px; height: 453px;","alt":"Sri Lanka Growth Diagnostic Summary of Findings","class":"media-element file-default"}}]]



	[[{"fid":"3719220","view_mode":"default","type":"media","attributes":{"height":"1016","width":"1369","style":"width: 650px; height: 482px;","alt":"Sri Lanka Growth Syndrome","class":"media-element file-default"}}]]

}
}
@report {1313939,
	title = {Targeting Sectors For Investment and Export Promotion in Sri Lanka},
	year = {2018},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	In August 2016, the Government of Sri Lanka (GoSL) and the Building State Capability program of CID convened five teams of civil servants, tasking them with solving issues related to investment and export promotion. One of these teams, the {\textquotedblleft}Targeting Team,{\textquotedblright} took on the task of formulating and executing a plan to identify promising new economic activities for investment and export promotion in Sri Lanka. With the assistance of CID{\textquoteright}s Growth Lab, the Targeting Team assembled and analyzed over 100 variables from 22 datasets, studying all tradable activities and 29 representative subsectors. Their analysis highlighted the potential of investment related to electronics, electrical equipment and machinery (including automotive products), as well as tourism. Ultimately, the team{\textquoteright}s recommendations were incorporated in GoSL strategies for investment promotion, export development, and economic diplomacy; extensions of the research were also used to help plan new export processing zones and target potential anchor investors.



	This report summarizes the methodology and findings of the Targeting Team, including scorecards for each of the sectors studied.



	[[{"fid":3727065,"view_mode":"default","type":"media","attributes":{"height":"1024","width":"1474","alt":"targeting_report_figure15","class":"media-element file-default"}}]]

},
	author = {Malalgoda, Champika and Samaraweera, Priyanka and Stock, Daniel}
}
@presentation {1636465,
	title = {Sri Lanka{\textquoteright}s North Central Province: A Growth Diagnostic},
	year = {2018},
	abstract = {
	In 2018, the Growth Lab team turned attention to diagnosing growth problems at the subnational level. The Prime Minister of Sri Lanka requested that the team start with the North Central Province, which had been experiencing recurring droughts, which had in turn been affecting national rice production. This presentation summarizes what the team found and presented to a local university in the North Central Province in September 2018. People in the province had long been working to escape from the vulnerability and low income levels of rice farming and the diagnostic found important areas for national-local coordination to support pathways to a stronger, and more connected, local economy.

},
	author = {Tim O{\textquoteright}Brien}
}
@presentation {1614119,
	title = {Opportunity Analysis of Agriculture Products in Sri Lanka},
	journal = {Measuring markets and feasibility},
	year = {2018},
	abstract = {
	In August 2017, CID began focused work with Sri Lanka{\textquoteright}s Ministry of Primary Industries (MPI), specifically with their Agriculture Sector Modernization Project (ASMP) team. MPI requested Harvard assistance in the analysis of constraints and opportunities in the agriculture and fisheries sector, specifically in non-plantation, export-oriented activities. As a first step, CID worked with MPI research officers to compare the more than twenty agricultural and fishery subsectors being considered under the ASMP. These subsectors were analyzed across over 53 quantitative and qualitative variables, measuring market demand, feasibility, current strength, and poverty considerations. The analysis ultimately identified spices (especially pepper), aquaculture (especially shrimp) and plantains and bananas as especially promising subsectors for future research and ASMP activities. More broadly, the analysis identified the basic market and feasibility considerations that can provide a starting point for value chain analyses and public-private strategic planning. This presentation was prepared jointly by MPI project officers and CID Growth Lab researchers in order to inform MPI initiatives, both within the ASMP and beyond.



	[[{"fid":3727070,"view_mode":"default","type":"media","attributes":{"style":"width: 690px; height: 721px;","alt":"agri_sector_opportunities_chart","class":"media-element file-default "}}]]



},
	author = {Tim O{\textquoteright}Brien and Dan Stock and Paula Marra and D.C.A Gunawardana and Sapumal Kapukotuwa and Nandani Siriyalatha}
}
@mastersthesis {1614098,
	title = {Engaging Overseas Sri Lankans to Facilitate Export Diversification},
	year = {2018},
	abstract = {
	Insufficient export diversification is a binding constraint to economic growth in Sri Lanka



	
		The Harvard CID growth diagnostic found that with wages in traditional export sectors now below average Sri Lankan wages, new higher-wage export industries are required
	



	Overseas Sri Lankans (OSL) have the potential to create new export industries in Sri Lanka



	
		Diasporas were involved in the export-led development of India, Taiwan, and China by bringing industry knowhow and market connections to their home countries
	
	
		There are large, well-educated OSL communities living in the US, UK, Canada, and Australia that have the industry knowhow to assist in export-led growth in Sri Lanka
	



	OSL can have the biggest impact on diversifying exports if they return to start firms in new export industries rather than working with firms while based overseas



	
		OSL can play a useful role connecting the existent Sri Lankan IT export sector to overseas markets, but they cannot start firms in new export industries from abroad
	
	
		If OSL return to start firms they can {\textquotedblleft}seed{\textquotedblright} a new export industry that grows organically through the diffusion of knowhow
	
	
		The pharmaceutical sector is an example of an industry with high potential to be {\textquotedblleft}seeded{\textquotedblright} by returning OSL entrepreneurs
	



	Preliminary policy recommendations focus on removing barriers and catalyzing latent motivations to facilitate OSL return entrepreneurship:



	
		The Department for Immigration and Emigration should continue to ease border processes for OSL through dual citizenship and the OSL lifetime resident visa
	
	
		The Board of Investment should orient part of its {\textquotedblleft}one-stop-shop{\textquotedblright} to dealing specifically with OSL issues
	
	
		The Ministry of Foreign Affairs should utilize its diplomatic network to engage potential OSL entrepreneurs to catalyze latent motivations to return
	



	*This is an edited version of a Policy Analysis written in fulfilment of the requirements for the degree of Master in Public Administration in International Development, John F. Kennedy School of Government, Harvard University

},
	author = {Jack Sennett}
}
@article {1604264,
	title = {Fool{\textquoteright}s Gold: On the Impact of Venezuelan Devaluations in Multinational Stock Prices},
	journal = {Economia LACEA },
	volume = {19},
	number = {1},
	year = {2018},
	pages = {93-128},
	abstract = {This paper documents negative cumulative abnormal returns (CARs) to five\&nbsp;exchange rate devaluations in Venezuela within the context of stiff exchange controls and large\&nbsp;black-market premiums, using daily stock prices for 110 multinational corporations with Venezuelan\&nbsp;subsidiaries. The results suggest evidence of statistically and economically significant\&nbsp;negative CARs of up to 2.07 percent over the ten-day event window. We find consistent results\&nbsp;using synthetic controls to causally infer the effect of each devaluation on the stock prices\&nbsp;of global firms active in the country at the time of the event. Our results are at odds with the\&nbsp;predictions of the efficient market hypothesis stating that predictable devaluations should not\&nbsp;affect the stock prices of large multinational companies on the day of the event, and even less\&nbsp;so when they happen in small countries. We interpret these results as a suggestive indication of\&nbsp;market inefficiencies in the process of asset pricing.},
	url = {https://muse.jhu.edu/article/708363/pdf},
	author = {Dany Bahar and Carlos A. Molina and Miguel A. Santos}
}
@article {1489279,
	title = {Career dynamics and gender gaps among employees in the microfinance sector},
	year = {2018},
	abstract = {
	While microfinance institutions (MFIs) are increasingly important as employers in the developing world, there is little micro-level evidence on gender differences among MFI employees and MFIs{\textquoteright} relation to economic development.



	We use a unique panel dataset of employees from Latin America{\textquoteright}s largest MFI to show that gender gaps favouring men for promotion exist primarily in the sales division, while there is a significant gender wage gap in the administrative division. Among loan officers in the sales division, the gender gap in promotion and wages reverses.



	Finally, female employees tend to work with clients with better loan terms and a history of loans with the institution.

},
	url = {https://doi.org/10.35188/UNU-WIDER/2017/341-7},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina}
}
@inbook {1489277,
	title = {Career Dynamics and Gender Gaps among Employees in the Microfinance Sector},
	booktitle = {Towards Gender Equity and Development},
	year = {2018},
	publisher = {Oxford University Press},
	organization = {Oxford University Press},
	url = {https://global.oup.com/academic/product/towards-gender-equity-in-development-9780198829591?cc=us\&lang=en\&},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina},
	editor = {Anderson, Siwan and Beaman, Lori and Platteau, Jean-Philippe}
}
@article {1482246,
	title = {Automation, Skills Use and Training},
	year = {2018},
	abstract = {
	This study focuses on the risk of automation and its interaction with training and the use of skills at work. Building on the expert assessment carried out by Carl Frey and Michael Osborne in 2013, the paper estimates the risk of automation for individual jobs based on the Survey of Adult Skills (PIAAC). The analysis improves on other international estimates of the individual risk of automation by using a more disaggregated occupational classification and identifying the same automation bottlenecks emerging from the experts{\textquoteright} discussion. Hence, it more closely aligns to the initial assessment of the potential automation deriving from the development of Machine Learning. Furthermore, this study investigates the same methodology using national data from Germany and United Kingdom, providing insights into the robustness of the results.



	The risk of automation is estimated for the 32 OECD countries that have participated in the Survey of Adult Skills (PIAAC) so far. Beyond the share of jobs likely to be significantly disrupted by automation of production and services, the accent is put on characteristics of these jobs and the characteristics of the workers who hold them. The risk is also assessed against the use of ICT at work and the role of training in helping workers transit to new career opportunities.

},
	url = {https://www.oecd-ilibrary.org/employment/automation-skills-use-and-training_2e2f4eea-en},
	author = {Ljubica Nedelkoska and Quintini, Glenda}
}
@article {1387991,
	title = {Tabasco: Diagn{\'o}stico de Crecimiento},
	year = {2018},
	abstract = {
	Since 2003, the GDP per capita of Tabasco has consistently figured among the 4 largest in the country. However, this level of economic activity has not translated into an equally favorable performance in other social welfare metrics. According to CONEVAL, the Tabasco poverty rate in 2016 was 50.9\%, seven percentage points higher than the national rate (43.6\%). On the other hand, the average monthly income of the workers of the state is in the 40th percentile of all the states.



	This discrepancy can be explained because the mining activity, despite accumulating only 3\% of jobs, represents more than 50\% of the state{\textquoteright}s GDP. If we only consider non-oil GDP, we have that the GDP per capita of the state has tended to be located around the country{\textquoteright}s median, and for 2016 it was in the 30th percentile nationwide.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Juan Obach}
}
@article {1388482,
	title = {Tabasco: Reporte de Complejidad Ec{\'o}nomica},
	year = {2018},
	abstract = {
	Este estudio busca identificar las capacidades productivas de Tabasco a partir de un an{\'a}lisis de la composici{\'o}n de sus exportaciones y su empleo bas{\'a}ndose en la perspectiva de la complejidad econ{\'o}mica. Asimismo, busca identificar productos potenciales que requieran una base de conocimientos productivos similar a la que ya tiene Tabasco y que le permita mejorar su complejidad econ{\'o}mica actual y prospectiva.



	Para tales efectos, primero se explora la evoluci{\'o}n en el tiempo del valor de las exportaciones de Tabasco y la composici{\'o}n de las mismas, as{\'\i} como de los principales productos de exportaci{\'o}n. En sentido, se tiene que las exportaciones de Tabasco est{\'a}n determinadas por el sector petrolero. Los env{\'\i}os de petr{\'o}leo representan alrededor del 97\% de las exportaciones estatales y explican m{\'a}s del 90\% del aumento de las exportaciones de la {\'u}ltima d{\'e}cada.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Jos{\'e} Ram{\'o}n Morales A.}
}
@article {1387892,
	title = {Tabasco: Diagn{\'o}stico Industrial},
	year = {2018},
	abstract = {
	En este estudio se consideraron los productos priorizados en el Reporte de Complejidad Econ{\'o}mica de Tabasco y se procedi{\'o} a evaluar su potencial a partir de un conjunto de consideraciones de mercado. Luego, se agreg{\'o} el potencial de cada producto en distintas colecciones de producto, y se seleccion{\'o} una industria cuya estimulaci{\'o}n y desarrollo constituya una apuesta de desarrollo prometedora el estado. Respecto de {\'e}ste se detallaron algunas estad{\'\i}sticas generales como una forma de evaluar su potencial de crecimiento e impacto para la econom{\'\i}a local, estatal y nacional.



	Para el objeto de este estudio, el sector industrial escogido para el an{\'a}lisis de cuellos de botella fue el de {\textquotedblleft}Qu{\'\i}micos{\textquotedblright} y, m{\'a}s puntualmente, los productos: {\textquotedblleft}Agentes de limpieza org{\'a}nicos (ex. Jab{\'o}n){\textquotedblright}, {\textquotedblleft}Aprestos y aceleradores de tintura{\textquotedblright}, {\textquotedblleft}Mezclas de sustancias odor{\'\i}feras{\textquotedblright}, {\textquotedblleft}Placas fotogr{\'a}ficas{\textquotedblright} y {\textquotedblleft}Tinta{\textquotedblright}. El desarrollo de esta colecci{\'o}n de productos representa una importante oportunidad, la que, a la fecha, los productores mexicanos no han podido aprovechar del todo. Sin embargo, estos productos han presentado un gran dinamismo dentro de M{\'e}xico en los a{\~n}os recientes. Entre 2004 y 2014, las exportaciones de M{\'e}xico en estos productos se han duplicado, el empleo en los sectores asociados a estos productos ha aumentado un 20\%, y el salario promedio en estos sectores ha aumentado entre 40\% y 50\%.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1388582,
	title = {Tabasco: Insumos para el desarrollo de recomendaci{\'o}nes},
	year = {2018},
	abstract = {En este documento se presentaron una serie de insumos para el desarrollo de pol{\'\i}ticas para Tabasco, que apuntan a la estructuraci{\'o}n de una estrategia de transformaci{\'o}n productiva que le permita al estado revertir la tendencia adversa de los {\'u}ltimos a{\~n}os y promover una senda de crecimiento sostenido. Asimismo, este documento busc{\'o} consolidar los principales hallazgos de las investigaciones que hicieron parte del proyecto {\textquotedblleft}Dise{\~n}o de estrategias de transformaci{\'o}n productiva para Tabasco.},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1387873,
	title = {Campeche: Diagn{\'o}stico de Crecimiento},
	year = {2018},
	abstract = {
	Campeche cuenta con el PIB per c{\'a}pita m{\'a}s alto de todo M{\'e}xico. Si bien buena parte de este desempe{\~n}o se debe a la actividad petrolera (la cual representa 80\% de la actividad econ{\'o}mica del estado), incluso si se considera {\'u}nicamente el PIB no petrolero per c{\'a}pita el estado se ubicaba por encima del 80\% de las entidades federativas del pa{\'\i}s. En 2016 el PIB per c{\'a}pita de la entidad {\textendash}a pesar de ser el m{\'a}s alto de todo M{\'e}xico {\textendash} era 45\% de su valor en 2003, lo que equivale a una ca{\'\i}da anual promedio de aproximadamente 6\%. Si bien esta ca{\'\i}da ha sido sostenida, las razones que la subyacen parecen haber variado en el tiempo.



	En el per{\'\i}odo 2003-2009 se evidenci{\'o} una divergencia entre el comportamiento de la actividad petrolera y la no petrolera. Por un lado, todos los sectores de la econom{\'\i}a no petrolera, con la excepci{\'o}n de servicios de apoyo a los negocios, reflejaron tasas de crecimiento positivas. Por el contrario, la actividad petrolera cay{\'o} abruptamente, debido a que a pesar de que hubo aumentos en la cantidad de pozos de desarrollo perforados y en la cantidad de equipos de perforaci{\'o}n activos, la producci{\'o}n petrolera cay{\'o} 26\%, alcanzado con ello niveles que no se hab{\'\i}an observado desde 1997.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Juan Obach}
}
@article {1387874,
	title = {Campeche: Reporte de Complejidad Econ{\'o}mica},
	year = {2018},
	abstract = {Este estudio busca identificar las capacidades productivas de Campeche a partir de un an{\'a}lisis de la composici{\'o}n de sus exportaciones y su empleo bas{\'a}ndose en la perspectiva de la complejidad econ{\'o}mica. Asimismo, busca identificar productos potenciales que requieran una base de conocimientos productivos similar a la que ya tiene Campeche y que le permita mejorar su complejidad econ{\'o}mica actual y prospectiva.Para tales efectos, primero se explora la evoluci{\'o}n en el tiempo del valor de las exportaciones de Campeche y la composici{\'o}n de las mismas, as{\'\i} como de los principales productos de exportaci{\'o}n. En sentido, se tiene que las exportaciones de Campeche est{\'a}n determinadas por el sector petrolero. Los env{\'\i}os de petr{\'o}leo representan alrededor del 88,7\% de las exportaciones estatales y explican en su totalidad la ca{\'\i}da de {\'e}stas desde el 2008.},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Jos{\'e} Ram{\'o}n Morales A.}
}
@article {1387885,
	title = {Campeche: Diagn{\'o}stico Industrial},
	year = {2018},
	abstract = {En este estudio se consideraron los productos priorizados en el Reporte de Complejidad Econ{\'o}mica de Campeche y se procedi{\'o} a evaluar su potencial a partir de un conjunto de consideraciones de mercado. Luego, se agreg{\'o} el potencial de cada producto en distintas colecciones de producto, y se seleccion{\'o} una industria cuya estimulaci{\'o}n y desarrollo constituya una apuesta de desarrollo prometedora el estado. Respecto de {\'e}ste se detallaron algunas estad{\'\i}sticas generales como una forma de evaluar su potencial de crecimiento e impacto para la econom{\'\i}a local, estatal y nacional.Para el objeto de este estudio, el sector industrial escogido para el an{\'a}lisis de cuellos de botella fue el de {\textquotedblleft}Textiles{\textquotedblright} y, m{\'a}s puntualmente, los productos: {\textquotedblleft}Abrigos para mujeres, de punto{\textquotedblright}, {\textquotedblleft}Calzoncillos para hombres, de punto{\textquotedblright}, {\textquotedblleft}Camisas para hombres, de punto{\textquotedblright}, {\textquotedblleft}Camisas para mujeres{\textquotedblright}, {\textquotedblleft}Camisas para mujeres, de punto{\textquotedblright} , {\textquotedblleft}Las dem{\'a}s prendas de vestir, de punto{\textquotedblright}, {\textquotedblleft}Su{\'e}teres (jerseys) y art{\'\i}culos similares, de punto{\textquotedblright}, {\textquotedblleft}Sostenes y art{\'\i}culos similares{\textquotedblright}, {\textquotedblleft}Trajes para hombres, de punto{\textquotedblright}, {\textquotedblleft}Trajes para mujeres, de punto{\textquotedblright}, {\textquotedblleft}Trajes y pantalones para hombres{\textquotedblright}, {\textquotedblleft}Trajes y pantalones para mujeres{\textquotedblright} y {\textquotedblleft}Trapos y cordajes textiles en desperdicios{\textquotedblright}. El desarrollo de esta colecci{\'o}n de productos puede representar una oportunidad. Sin embargo, recientemente las exportaciones de estos productos por parte de M{\'e}xico han venido perdiendo espacios en el mercado global, siendo el valor de las exportaciones mexicanas de estos productos en la actualidad menos de la mitad de lo que era en 2004.},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1387883,
	title = {Campeche: Insumos para el desarrollo de recomendaci{\'o}nes},
	year = {2018},
	abstract = {En este documento se presentaron una serie de insumos para el desarrollo de pol{\'\i}ticas para Campeche, que apuntan a la estructuraci{\'o}n de una estrategia de transformaci{\'o}n productiva que le permita al estado revertir la tendencia adversa de los {\'u}ltimos a{\~n}os y promover una senda de crecimiento sostenido. Asimismo, este documento busc{\'o} consolidar los principales hallazgos de las investigaciones que hicieron parte del proyecto {\textquotedblleft}Dise{\~n}o de estrategias de transformaci{\'o}n productiva para Campeche{\textquotedblright}.},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1387869,
	title = {Baja California: Diagn{\'o}stico de Crecimiento},
	year = {2018},
	abstract = {
	Baja California se ha ubicado consistentemente entre los estados m{\'a}s pr{\'o}speros de M{\'e}xico, pero tambi{\'e}n entre los de crecimiento m{\'a}s vol{\'a}til. De hecho, el desempe{\~n}o econ{\'o}mico reciente del estado estuvo marcado por una fuerte fase de desaceleraci{\'o}n (como consecuencia de la crisis financiera en Estados Unidos), y una de recuperaci{\'o}n, en la que si bien la entidad logr{\'o} alcanzar sus niveles de crecimiento pre-crisis, solo ha podido hacerlo de manera parcial en t{\'e}rminos de productividad, ingresos laborales, y empleo.



	Esta trayectoria de colapso y recuperaci{\'o}n parcial invita a una reflexi{\'o}n sobre los dilemas que enfrenta la entidad, particularmente en torno a sus fuentes de vulnerabilidad. Como se vio, una parte importante de la ca{\'\i}da del producto durante el periodo de desaceleraci{\'o}n viene explicada por la contracci{\'o}n de la demanda en los Estados Unidos. Sin embargo, factores m{\'a}s espec{\'\i}ficos al estado, tales como su integraci{\'o}n multidimensional con California (incluyendo la del mercado inmobiliario), jugaron un papel amplificador de los efectos de la crisis. Adicionalmente, el hecho de que la entidad no haya sido capaz de mitigar los efectos de la transici{\'o}n tecnol{\'o}gica de su principal producto de exportaci{\'o}n o de re-desplegar estos conocimientos productivos en actividades que permitieran recuperar plenamente los ingresos medianos, el empleo y la productividad laboral, puede ser indicio que existen caracter{\'\i}sticas, propias de su naturaleza productiva, que abonan bien sea a aumentar la vulnerabilidad o a reducir la capacidad de recuperaci{\'o}n.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Juan Obach}
}
@article {1387867,
	title = {Baja California: Reporte de Complejidad Econ{\'o}mica},
	year = {2018},
	abstract = {En el Diagn{\'o}stico de Crecimiento de Baja California se describieron las principales tendencias\&nbsp;recientes del desempe{\~n}o econ{\'o}mico del estado. En esta subsecci{\'o}n se resumen los principales\&nbsp;hallazgos de dicho reporte, a modo de motivaci{\'o}n para este estudio1. Baja California se ha ubicado\&nbsp;consistentemente entre los estados m{\'a}s pr{\'o}speros de M{\'e}xico. Sin embargo, tambi{\'e}n destaca por\&nbsp;presentar uno de los crecimientos m{\'a}s vol{\'a}tiles. La entidad fue la de menor crecimiento no-petrolero\&nbsp;entre las 32 del pa{\'\i}s entre 2003-2010, sin embargo, desde entonces, ha crecido por encima de la media\&nbsp;del pa{\'\i}s y a la par de otras entidades fronterizas. {\textquestiondown}Por qu{\'e} la econom{\'\i}a de Baja California ha presentado un desempe{\~n}o m{\'a}s vol{\'a}til? {\textquestiondown}Qu{\'e} elementos propiciaron un ciclo de colapso y recuperaci{\'o}n m{\'a}s\&nbsp;acentuado que en otros lugares comparables? {\textquestiondown}Cu{\'a}les son las condiciones locales que amplifican la\&nbsp;vulnerabilidad del estado y lo dejan m{\'a}s expuesto a crisis externas?},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti and Jos{\'e} Ram{\'o}n Morales A.}
}
@article {1387871,
	title = {Baja California: Diagn{\'o}stico Industrial},
	year = {2018},
	abstract = {
	En este estudio se consideraron los productos priorizados en el Reporte de Complejidad Econ{\'o}mica de Baja California y se procedi{\'o} a evaluar su potencial a partir de un conjunto de consideraciones de mercado. Luego, se agreg{\'o} el potencial de cada producto en distintas colecciones de producto, y se seleccion{\'o} una industria cuya estimulaci{\'o}n y desarrollo constituya una apuesta de desarrollo prometedora el estado. Respecto de {\'e}ste se detallaron algunas estad{\'\i}sticas generales como una forma de evaluar su potencial de crecimiento e impacto para la econom{\'\i}a local, estatal y nacional.



	Para el objeto de este estudio, el sector industrial escogido para el an{\'a}lisis de cuellos de botella fue el de {\textquotedblleft}Maquinaria industrial, herramientas y equipo{\textquotedblright} y puntualmente los productos: {\textquotedblleft}Arboles de transmisi{\'o}n{\textquotedblright}, {\textquotedblleft}Aparatos para soldar{\textquotedblright}, {\textquotedblleft}Art{\'\i}culos de grifer{\'\i}a para tuber{\'\i}as, calderas, etc.{\textquotedblright}, {\textquotedblleft}Aparatos para regulaci{\'o}n autom{\'a}ticos{\textquotedblright}, {\textquotedblleft}Bombas para l{\'\i}quidos{\textquotedblright}, {\textquotedblleft}Calderas para calefacci{\'o}n central{\textquotedblright} {\textquotedblleft}Contadores de gas, l{\'\i}quido o electricidad{\textquotedblright}, {\textquotedblleft}Dens{\'\i}metros, term{\'o}metros, etc.{\textquotedblright}, {\textquotedblleft}Lavadoras de ropa{\textquotedblright}, {\textquotedblleft}Los dem{\'a}s contadores{\textquotedblright}, {\textquotedblleft}M{\'a}quinas de cosechar o trillas{\textquotedblright}, {\textquotedblleft}M{\'a}quinas herramienta para trabajar madera{\textquotedblright}, {\textquotedblleft}M{\'a}quinas para fabricar elementos impresores{\textquotedblright}, {\textquotedblleft}M{\'a}quinas y aparatos para soldar{\textquotedblright}, {\textquotedblleft}M{\'a}quinas y aparatos para trabajar caucho o pl{\'a}stico{\textquotedblright}, {\textquotedblleft}M{\'a}quinas para el procesamiento de tela{\textquotedblright}, {\textquotedblleft}Partes para m{\'a}quinas para trabajar maderas o metales{\textquotedblright} y {\textquotedblleft}{\'U}tiles intercambiables para herramientas de mano{\textquotedblright}. El desarrollo de esta colecci{\'o}n de productos presenta oportunidades muy atractivas tanto a nivel nacional como internacional. M{\'a}s a{\'u}n, la producci{\'o}n de estos productos ha exhibido un importante dinamismo en el pa{\'\i}s durante los {\'u}ltimos a{\~n}os. Las exportaciones mexicanas de estos productos han aumentado en valor un 175\% durante en el per{\'\i}odo 2004-2014. Asimismo, el empleo en las industrias asociadas al desarrollo de estos productos ha aumentado m{\'a}s de 35\%.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1387872,
	title = {Baja California: Insumos para el desarrollo de recomendaciones},
	year = {2018},
	abstract = {
	En primer lugar, en este reporte se realiz{\'o} una consolidaci{\'o}n de los principales hallazgos de las investigaciones previas relativas al estado. En t{\'e}rminos generales, se plante{\'o} que la entidad destaca por ser una de las m{\'a}s prospera del pa{\'\i}s, pero, al mismo tiempo, por haber exhibido un virtual estancamiento econ{\'o}mico durante los {\'u}ltimos a{\~n}os. Esta situaci{\'o}n se explicar{\'\i}a, en gran medida, por el efecto de la crisis financiera en Estados Unidos sobre su demanda por exportaciones, pero tambi{\'e}n por factores m{\'a}s espec{\'\i}ficos al estado, tales como el mayor impacto de la recesi{\'o}n estadounidense producto de la integraci{\'o}n multidimensional de la entidad con California (incluyendo la inmobiliaria) y el shock tecnol{\'o}gico que afectara la producci{\'o}n de televisores, su producto de exportaci{\'o}n m{\'a}s importante. Por otro lado, como principales restricciones a la diversificaci{\'o}n productiva y el crecimiento econ{\'o}mico en el futuro, se identificaron los problemas de inseguridad que vive el estado, as{\'\i} como su significativa dependencia de la actividad maquiladora. Este {\'u}ltimo elemento resulta relevante podr{\'\i}a llevar a sobre-estimar las capacidades productivas existentes y hacer a la entidad m{\'a}s vulnerable a peque{\~n}os cambios regulatorios, tecnol{\'o}gicos o de demanda.



	Posteriormente se present{\'o} una descripci{\'o}n de las estrategias de desarrollo econ{\'o}mico actuales encabezadas por autoridades a diversos niveles. Para ello, se realiz{\'o} un mapeo de la oferta de programas p{\'u}blicos productivos y los actores que intervienen en su dise{\~n}o y ejecuci{\'o}n en base al Plan de Desarrollo Estatal 2014-2019, los Planes Municipales de Tijuana (2017-2019) y Mexicali (2017-2019) la Ley de Desarrollo Econ{\'o}mico del Estado, la Agenda de Innovaci{\'o}n, el Sistema Estatal de Indicadores, y la informaci{\'o}n cualitativa recogida durante visitas a la entidad. Esta revisi{\'o}n sistem{\'a}tica puso de relieve que el dise{\~n}o de las estrategias de desarrollo econ{\'o}mico ha contemplado, en su mayor{\'\i}a, proyectos con alcance vertical y un foco en la provisi{\'o}n de diferentes clases de insumos p{\'u}blicos. Esto resulta positivo toda que son precisamente este tipo de pol{\'\i}ticas las que presentan un mayor potencial para reducir los problemas de coordinaci{\'o}n entre el sector p{\'u}blico y privado y, por tanto, resultar en aumentos en la productividad. Sin perjuicio de lo anterior, es posible identificar obst{\'a}culos que inhiben una implementaci{\'o}n eficiente de las estrategias. En particular, la falta de un proceso consultivo y guiado para la asignaci{\'o}n de est{\'\i}mulos y la inexistencia de mecanismos para recolectar informaci{\'o}n sobre los factores que puedan desalentar la llegada de inversiones.

},
	author = {Douglas Barrios and Johanna Ramos and Jorge Tapia and Ana Grisanti}
}
@article {1376229,
	title = {Popularity Spikes Hurt Future Chances For Viral Propagation of Protomemes},
	journal = {Communications of the ACM},
	volume = {61},
	number = {1},
	year = {2018},
	pages = {70-77},
	abstract = {A meme is a concept introduced by Dawkins12\&nbsp;as an equivalent in cultural studies of a gene in biology. A meme is a cultural unit, perhaps a joke, musical tune, or behavior, that can replicate in people{\textquoteright}s minds, spreading from person to person. During the replication process, memes can mutate and compete with each other for attention, because people{\textquoteright}s consciousness has finite capacity. Meme viral spreading causes behavioral change, for the better, as when, say, the "ALS Bucket Challenge" meme caused a cascade of humanitarian donations,a\&nbsp;and for the worse, as when researchers proved obesity7\&nbsp;and smoking8\&nbsp;are socially transmittable diseases. A better theory of meme spreading could help prevent an outbreak of bad behaviors and favor positive ones.},
	url = {https://cacm.acm.org/magazines/2018/1/223889-popularity-spikes-hurt-future-chances-for-viral-propagation-of-protomemes/fulltext},
	author = {Michele Coscia}
}
@article {1375928,
	title = {Using arborescences to estimate hierarchicalness in directed complex networks},
	journal = {PLoS ONE},
	volume = {13},
	number = {1},
	year = {2018},
	abstract = {Complex networks are a useful tool for the understanding of complex systems. One of the emerging properties of such systems is their tendency to form hierarchies: networks can be organized in levels, with nodes in each level exerting control on the ones beneath them. In this paper, we focus on the problem of estimating how hierarchical a directed network is. We propose a structural argument: a network has a strong top-down organization if we need to delete only few edges to reduce it to a perfect hierarchy{\textemdash}an arborescence. In an arborescence, all edges point away from the root and there are no horizontal connections, both characteristics we desire in our idealization of what a perfect hierarchy requires. We test our arborescence score in synthetic and real-world directed networks against the current state of the art in hierarchy detection: agony, flow hierarchy and global reaching centrality. These tests highlight that our arborescence score is intuitive and we can visualize it; it is able to better distinguish between networks with and without a hierarchical structure; it agrees the most with the literature about the hierarchy of well-studied complex systems; and it is not just a score, but it provides an overall scheme of the underlying hierarchy of any directed complex network.},
	url = {https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0190825},
	author = {Michele Coscia}
}
@article {1375923,
	title = {Birds of a feather scam together: Trustworthiness homophily in a business network},
	journal = {Social Networks},
	volume = {54},
	number = {July 2018},
	year = {2018},
	pages = {228-237},
	abstract = {Estimating the trustworthiness of a set of actors when all the available information is provided by the actors themselves is a hard problem. When two actors have conflicting reports about each other, how do we establish which of the two (if any) deserves our trust? In this paper, we model this scenario as a network problem: actors are nodes in a network and their reports about each other are the edges of the network. To estimate their trustworthiness levels, we develop an iterative framework which looks at all the reports about each connected actor pair to define its trustworthiness balance. We apply this framework to a customer/supplier business network. We show that our trustworthiness score is a significant predictor of the likelihood a business will pay a fine if audited. We show that the market network is characterized by homophily: businesses tend to connect to partners with similar trustworthiness degrees. This suggests that the topology of the network influences the behavior of the actors composing it, indicating that market regulatory efforts should take into account network theory to prevent further degeneration and failures.},
	url = {https://www.sciencedirect.com/science/article/pii/S0378873317300370},
	author = {Mauro Barone and Michele Coscia}
}
@article {1372468,
	title = {The Mobility of Displaced Workers: How the Local Industry Mix Affects Job Search},
	journal = {Journal of Urban Economics},
	volume = {108},
	number = {November 2018},
	year = {2018},
	pages = {124-140},
	abstract = {Are there Marshallian externalities in job search? We study how workers who lose their jobs in establishment closures in Germany cope with their loss of employment. About a fifth of these displaced workers do not return to social-security covered employment within the next three years. Among those who do get re-employed, about two-thirds leave their old industry and one-third move out of their region. However, which of these two types of mobility responses workers will choose depends on the local industry mix in ways that are suggestive of Marshallian benefits to job search. In particular, large concentrations of one{\textquoteright}s old industry makes it easier to find new jobs: in regions where the pre-displacement industry is large, displaced workers suffer relatively small earnings losses and find new work faster. In contrast, large local industries skill-related to the pre-displacement industry increase earnings losses but also protect against long-term unemployment. Analyzed through the lens of a job-search model, the exact spatial and industrial job-switching patterns reveal that workers take these Marshallian externalities into account when deciding how to allocate search efforts among industries.},
	url = {https://www.sciencedirect.com/science/article/pii/S0094119018300767},
	author = {Neffke, Frank and Anne Otto and Cesar Hidalgo}
}
@article {1359661,
	title = {There is a Future after Cars: Economic Growth Analysis for Hermosillo},
	year = {2018},
	abstract = {
	
		For 30 years, Hermosillo has been wondering whether it has a future after Ford. Until the early 1980s, the city relied mainly on agricultural activity. When the multinational motor company arrived in this northwestern Mexican city in 1986, it changed the history of a region that up until that point had relied heavily on agriculture. The assembly plant was established and many auto parts suppliers sprang up, triggering industrialization and increasing the complexity of its economy, its productivity, and wages. Intensive manufacturing development turned Hermosillo into the fifth richest metropolitan area in Mexico in 1998. 
	

	
		Broadly speaking, this growth trajectory was maintained. In 2015, Hermosillo was in the top 5\% of wealthiest municipalities, with poverty levels and informal employment rates significantly lower than in the rest of the country. But the economy of this city in Sonora State has clearly lost its dynamism over the past few years. Even in Mexico{\textquoteright}s low-growth context during the period 2005-2015, growth in per capita gross domestic product in Hermosillo (1.3\%) fell below the federal average (1.4\%). Hermosillo{\textquoteright}s relative performance during this decade was not uniform. Between 2005 and 2010, it grew at a rate of 1.3\%, placing it in the 66th percentile (among the top 34\% for growth rate) of all municipalities in Mexico. In the second half of the decade, Hermosillo barely reached 1.2\% growth, falling to the 47th percentile (53\% of Mexican municipalities grew more). The situation worsened in the years 2013-2015, when output per worker fell by 7.2\%. 
	

	
		What happened in Hermosillo? Can the current economic structure sustain the municipality{\textquoteright}s high wages and guarantee future growth? What policy interventions are needed? 
	

	
		Seeking answers to these questions, the Growth Lab at Harvard{\textquoteright}s Center for International Development joined forces with the Inter-American Development Bank or IDB, in particular with its Emerging and Sustainable Cities Program (ESC). This program is a technical assistance initiative that provides support to regional governments to develop and execute urban sustainability projects. ESC{\textquoteright}s goal is to contribute to priority urban interventions to provide the sustainable, harmonious growth of cities. This part of its vision is aligned with the idea of promoting inclusive growth and prosperity that guides the Growth Lab{\textquoteright}s research. 
	

	
		\&nbsp;
	

},
	author = {Douglas Barrios and Ana Grisanti and Jose Ramon Morales and Juan Obach and Johanna Ramos and Miguel Angel Santos and Jorge Tapia}
}
@article {1358349,
	title = {The workforce of pioneer plants: The role of worker mobility in the diffusion of industries},
	journal = {Research Policy},
	year = {2018},
	note = {Originally published as CID Working Paper 310},
	abstract = {Does technology require labour mobility to diffuse? To explore this, we use German social-security data and ask how plants that pioneer an industry in a location {\textendash} and for which the local labour market offers no experienced workers {\textendash} assemble their workforces. These pioneers use different recruiting strategies than plants elsewhere: they hire more workers from outside their industry and from outside their region, especially when workers come from closely related industries or are highly skilled. The importance of access to experienced workers is highlighted in the diffusion of industries from western Germany to the post-reunification economy of eastern German. While manufacturing employment declined in most advanced economies, eastern German regions managed to reindustrialise. The pioneers involved in this process relied heavily on expertise from western Germany: while establishing new manufacturing industries in the East, they sourced half of their experienced workers from the West.},
	url = {https://www.sciencedirect.com/science/article/pii/S004873331830249X},
	author = {Hausmann, Ricardo and Neffke, Frank}
}
@article {1348201,
	title = {Functional structures of US state governments},
	journal = {Proceedings of the National Academy of Sciences of the United States of America},
	year = {2018},
	abstract = {Governments in modern societies undertake an array of complex functions that shape politics and economics, individual and group behavior, and the natural, social, and built environment. How are governments structured to execute these diverse responsibilities? How do those structures vary, and what explains the differences? To examine these longstanding questions, we develop a technique for mapping Internet {\textquotedblleft}footprint{\textquotedblright} of government with network science methods. We use this approach to describe and analyze the diversity in functional scale and structure among the 50 US state governments reflected in the webpages and links they have created online: 32.5 million webpages and 110 million hyperlinks among 47,631 agencies. We first verify that this extensive online footprint systematically reflects known characteristics: 50 hierarchically organized networks of state agencies that scale with population and are specialized around easily identifiable functions in accordance with legal mandates. We also find that the footprint reflects extensive diversity among these state functional hierarchies. We hypothesize that this variation should reflect, among other factors, state income, economic structure, ideology, and location. We find that government structures are most strongly associated with state economic structures, with location and income playing more limited roles. Voters{\textquoteright} recent ideological preferences about the proper roles and extent of government are not significantly associated with the scale and structure of their state governments as reflected online. We conclude that the online footprint of governments offers a broad and comprehensive window on how they are structured that can help deepen understanding of those structures.Visualizations and datasets available on project website \&gt;\&gt;\&nbsp;},
	url = {http://www.pnas.org/content/early/2018/10/24/1803228115},
	author = {Stephen Kosack and Michele Coscia and Evann Smith and Kim Albrecht and Barab{\'a}si, Albert-L{\'a}szl{\'o} and Hausmann, Ricardo}
}
@report {1614232,
	title = {Agritourism in Albania: Trends, Constraints, and Recommendations},
	year = {2018},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	In Albania, the average specific expenditure by foreign tourists (non-residents) was 13.3\%\&nbsp;of GDP during 2013-2017, which clocked a 30\% growth within the four-year duration. The number of foreign citizen arrivals in the first half of 2018 has seen an increase by 9.1\%, as compared to the same period in 2017. "Holiday"\&nbsp;is the second most popular purpose of their visit reported after "Others." Tourism being the largest industry since 1990, with Europe representing 42\%3 of its total share, there remain huge economic dividends to reap for the emerging tourism industry in Albania. Moreover, this sector can generate non-farm employment in the agriculture sector. The challenge then is it to understand what is driving tourism growth in Albania, and what binds Albania{\textquoteright}s tourism opportunities from growing faster.



	The UN World Tourism Organisation (UNWTO) defines sustainable tourism as an enterprise that achieves a balance between the environmental, economic and socio-cultural aspects of tourism development for long-term benefits to recipient communities. The Government of Albania, led by Prime Minister Edi Rama, has identified Agritourism as a particularly inclusive and sustainable tourism opportunity and prioritized its development as a rural economic diversification tool within the country{\textquoteright}s new "100+ villages Programme." Consistent with this program, the Ministry of Tourism and Environment (MoTE) has started certifying Agritourism businesses, while Ministry of Agriculture and Rural Development (MoARD) through the Albanian Rural Development Agency (ARDA) is in the process of funding Agritourism projects. It is essential to understand the emerging patterns within the sector to strategize appropriately supportive policies.



	The Movements of citizens in Albania (INSTAT) report for June 2018 indicates a decrease by 13.3\% in the number of foreign citizens{\textquoteright} arrivals as compared to June 2017. There is (month-by-month) erratic traffic of tourists and hence undefined tourism season for the country. The Government of Albania faces a dearth of tourism specific information, like in attractions visited most by tourists, or mapping of identified agritourism farms to make better policy judgements required for seasonal tourism preparedness.

},
	author = {Neetisha Besra}
}
@article {1332459,
	title = {Growth Diagnostic for the State of Oaxaca},
	year = {2018},
	abstract = {
	Oaxaca is the second-poorest state in Mexico. It is also growing more slowly than the national average, leading to regional divergence. This paper seeks to diagnose the binding constraints that keep GDP growth in Oaxaca low.



	There is significant variation in average monthly incomes within Oaxaca, with a 12x gap between the municipality with the highest salary and that with the lowest. Oaxaca has 570 municipalities, whereas given its population and the national average for people per municipality it should have 66. And it is very indigenous: 58\% of the population speaks an indigenous language, compared to a national average of 15\%. Oaxaca{\textquoteright}s product space, a measure of how many kinds of industries provide employment in the state, is very low and has seen very limited change since 2004. The state shares some similarities with other states in southern Mexico, such as Chiapas and Guerrero. All three share a limited manufacturing base which, even after signing NAFTA, remained flat as a proportion of state GDP. They also have a poverty rate nearly 3 times the national average.\&nbsp;



	Oaxaca is a large state with a rugged natural landscape. Its population is highly dispersed, relative to other states in Mexico. This makes infrastructure critical. However, widespread road construction between 2004 and 2014 does not seem to have made a difference to either growth rates or economic complexity at the municipality level, suggesting the infrastructure constraint is not binding. We believe, however, that mobility might be. Transportation costs as a proportion of wages are very high, and are further increased by costly road blockages. This limits the flexibility of the labor force and the aggregation of talent.



	Low human capital can reduce the social returns to investment. Even though education is contentious in the state{\textquoteright}s politics, Oaxaca{\textquoteright}s education gap has been falling over time relative to the national average and its neighbors. This relative increase in years of education, however, has not been translated into economic development. We find that returns to education in the state are very similar to the returns to education in the rest of Mexico and higher than returns to education in Chiapas. We also note that the proportion of schooling undertaken in private institutions is in line with that in other states with higher quality of education. Finally, a Oaxaca-Blinder decomposition suggests that education does not explain wage differentials between Oaxaca and other states. All this evidence suggests that education is not a binding constraint to growth in Oaxaca.



	Governance challenges increase the risk of investing in Oaxaca. For instance, over 75\% of the municipalities in Oaxaca are governed through Usos y Costumbres. Only 153 of the 570 municipalities use a government-run election to determine their leader, and out of those, four did not elect a municipal president in the June 2016 election due to internal conflicts. 146 municipalities lack a police service. While Usos y Costumbres is a key part of the local social contract, it creates problems, such as in contract enforceability. It also limits migration in and out of the state. We also observe a negative correlation between Usos y Costumbres and local wages that is not explained by factors like indigenous origin.



	We also explore access to finance as a constraint to GDP growth. While enterprise surveys confirm that high interest rates, and distance to banks are a problem, Oaxaca{\textquoteright}s microenterprises bypass these problems by borrowing from cajas de ahorro or local credit unions. However, most borrowing is destined for consumption rather than investment. We also observe that FDI flows into Oaxaca are very scarce. For these reasons, we believe the binding constraint in Oaxaca is not access to finance, but rather low returns to investment.



	It is helpful to think whether there is an underlying syndrome that might explain the two binding constraints we identified: transportation costs and governance. One possible hypothesis is the isolation of people into very small communities that have very strong bonds within the community and very weak bonds outside of it. Oaxaca shows high variety in ethnic groups, languages, and government systems. On average, each municipality has 6,670 people, but there are 110 municipalities with less than 1,000 people. Elsewhere in Mexico, dispersed rural populations gradually converged into urban clusters around job opportunities. In Oaxaca, the process is not yet afoot because of a {\textquotedblleft}productivity trap{\textquotedblright}, in which low productivity means urban salaries do not cover the costs of transportation or permanent moves, and dispersion keeps productivity low by failing to concentrate employees. Cultural diversity has a side effect of encouraging spatial dispersion and isolation, and of having hundreds of different sets of {\textquotedblleft}rules of the game{\textquotedblright} covering the state{\textquoteright}s population. Increasing the complexity of this economy requires breaking the trap by finding new business models (i.e., encouraging discovery) and coordinating economic activities.\&nbsp;\&nbsp;



	Economic complexity analysis can point us to new industries that are feasible given Oaxaca{\textquoteright}s productive capabilities and the existing constraints we discussed. While Oaxaca{\textquoteright}s municipalities have among the least complex economies in the country, some industries stand out from our complexity analysis as potentially promising for Oaxaca. The end of the report singles out some industries for further analysis.

},
	author = {Rafael Rivera S{\'a}nchez and Angel Sarmiento Hinojosa and Sebasti{\'a}n Serra Wright}
}
@article {1332002,
	title = {On the Scaling Patterns of Infectious Disease Incidence in Cities},
	year = {2018},
	abstract = {Urban areas with larger and more connected populations offer an auspicious environment for contagion processes such as the spread of pathogens. Empirical evidence reveals a systematic increase in the rates of certain sexually transmitted diseases (STDs) with larger urban population size. However, the main drivers of these systemic infection patterns are still not well understood, and rampant urbanization rates worldwide makes it critical to advance our understanding on this front. Using confirmed-cases data for three STDs in US metropolitan areas, we investigate the scaling patterns of infectious disease incidence in urban areas. The most salient features of these patterns are that, on average, the incidence of infectious diseases that transmit with less ease{\textendash} either because of a lower inherent transmissibility or due to a less suitable environment for transmission{\textendash} scale more steeply with population size, are less predictable across time and more variable across cities of similar size. These features are explained, first, using a simple mathematical model of contagion, and then through the lens of a new theory of urban scaling. These frameworks help us reveal the links between the factors that determine the transmissibility of infectious diseases and the properties of their scaling patterns across cities.},
	author = {Oscar Patterson-Lomba and Andres Gomez-Lievano}
}
@article {1324461,
	title = {Is Our Human Capital General Enough to Withstand the Current Wave of Technological Change?},
	year = {2018},
	abstract = {The degree to which modern technologies are able to substitute for groups of job tasks has renewed fears of near-future technological unemployment. We argue that our knowledge, skills and abilities (KSA) go beyond the specific tasks we do at the job, making us potentially more adaptable to technological change than feared. The disruptiveness of new technologies depends on the relationships between the job tasks susceptible to automation and our KSA. Here we first demonstrate that KSA are general human capital features while job tasks are not, suggesting that human capital is more transferrable across occupations than what job tasks would predict. In spite of this, we document a worrying pattern where automation is not randomly distributed across the KSA space {\textendash} it is concentrated among occupations that share similar KSA. As a result, workers in these occupations are making longer skill transitions when changing occupations and have higher probability of unemployment.},
	author = {Ljubica Nedelkoska and Dario Diodato and Neffke, Frank}
}
@article {1322001,
	title = {Place-specific Determinants of Income Gaps: New Sub-National Evidence from Chiapas, Mexico},
	year = {2018},
	note = {Revised February 2020},
	abstract = {
	The literature on income gaps between Chiapas and the rest of Mexico revolves around individual factors, such as education and ethnicity. Yet, twenty years after the Zapatista rebellion, the schooling gap between Chiapas and the other Mexican entities has shrunk while the income gap has widened, and we find no evidence indicating that Chiapas indigenes are worse-off than their likes elsewhere in Mexico. We explore a different hypothesis. Based on census data, we calculate the economic complexity index, a measure of the knowledge agglomeration embedded in the economic activities at a municipal level in Mexico. Economic complexity explains a larger fraction of the income gap than any individual factor. Our results suggest that chiapanecos are not the problem, the problem is Chiapas. These results hold when we extend our analysis to Mexico{\textquoteright}s thirty-one federal entities, suggesting that place-specific determinants that have been overlooked in both the literature and policy, have a key role in the determination of income gaps.



	\&nbsp;

},
	author = {Hausmann, Ricardo and Carlo Pietrobelli and Miguel Angel Santos}
}
@webarticle {1318752,
	title = {PDIA and Climate Change Adaptation},
	journal = {Building State Capability Blog},
	year = {2018},
	author = {Tim O{\textquoteright}Brien}
}
@article {1318123,
	title = {The Exposure of U.S. Manufacturing Industries to Exchange Rates},
	journal = {International Review of Economics and Finance},
	year = {2018},
	abstract = {Safe asset demand and currency manipulation increase the dollar and the U.S. current account\&nbsp;deficit. Deficits in manufacturing trade cause dislocation and generate protectionism. Dynamic\&nbsp;OLS results indicate that U.S. export elasticities exceed unity for automobiles, toys, wood,\&nbsp;aluminum, iron, steel, and other goods. Elasticities for U.S. imports from China are close to one or\&nbsp;higher for footwear, radios, sports equipment, lamps, and watches and exceed 0.5 for iron, steel,\&nbsp;aluminum, miscellaneous manufacturing, and metal tools. Elasticities for U.S. imports from other\&nbsp;countries are large for electrothermal appliances, radios, furniture, lamps, miscellaneous\&nbsp;manufacturing, aluminum, automobiles, plastics, and other categories. Stock returns on many of\&nbsp;these sectors also fall when the dollar appreciates. Several manufacturing industries are thus\&nbsp;exposed to a strong dollar. Policymakers could weaken the dollar and deflect protectionist pressure\&nbsp;by promoting the euro, the yen, and the renminbi as alternative reserve currencies.},
	url = {https://www.sciencedirect.com/science/article/pii/S1059056017309061},
	author = {Willem Thorbecke}
}
@webarticle {1318109,
	title = {We recently ran a PDIA course on climate change adaptation. Why?},
	journal = {Building State Capability Blog},
	year = {2018},
	author = {Tim O{\textquoteright}Brien}
}
@article {1315893,
	title = {Measuring Venezuelan Emigration with Twitter},
	year = {2018},
	abstract = {Venezuela has seen an unprecedented exodus of people in recent months. In response to a dramatic economic downturn in which inflation is soaring, oil production tanking, and a humanitarian catastrophe unfolding, many Venezuelans are seeking refuge in neighboring countries. However, the lack of official numbers on emigration from the Venezuelan government, and receiving countries largely refusing to acknowledge a refugee status for affected people, it has been difficult to quantify the magnitude of this crisis. In this note we document how we use data from the social media service Twitter to measure the emigration of people from Venezuela. Using a simple statistical model that allows us to correct for a sampling bias in the data, we estimate that up to 2,9 million Venezuelans have left the country in the past year.},
	author = {Hausmann, Ricardo and Julian Hinz and Muhammed A. Yildirim}
}
@article {1314739,
	title = {One more resource curse: Dutch disease and export concentration},
	journal = {Journal of Development Economics},
	volume = {132},
	number = {May 2018},
	year = {2018},
	pages = {102-114},
	abstract = {Economists have long discussed the negative effect of Dutch disease episodes on the non-resource tradable sector as a whole, but little has been said on its impact on the composition of the non-resource export sector. This paper fills this gap by exploring to what extent concentration of a country{\textquoteright}s non-resource export basket is determined by their exports of natural resources. We present a theoretical framework that shows how upward pressure in wages caused by a resource windfall results in higher export concentration. We then document two robust empirical findings consistent with the theory. First, using data on discovery of oil and gas fields and of commodity prices as sources of exogenous variation, we find that countries with larger shares of natural resources in exports have more concentrated non-resource export baskets. Second, we find capital-intensive exports tend to dominate the export basket of countries prone to Dutch disease episodes.Listen to the podcast interview with the authors},
	url = {https://doi.org/10.1016/j.jdeveco.2018.01.002},
	author = {Dany Bahar and Miguel Santos}
}
@article {1314526,
	title = {The Exposure of U.S. Manufacturing Industries to Exchange Rates},
	year = {2018},
	abstract = {Safe asset demand and currency manipulation increase the dollar and the U.S. current account deficit. Deficits in manufacturing trade cause dislocation and generate protectionism. Dynamic OLS results indicate that U.S. export elasticities exceed unity for automobiles, toys, wood, aluminum, iron, steel, and other goods. Elasticities for U.S. imports from China are close to one or higher for footwear, radios, sports equipment, lamps, and watches and exceed 0.5 for iron, steel, aluminum, miscellaneous manufacturing, and metal tools. Elasticities for U.S. imports from other countries are large for electrothermal appliances, radios, furniture, lamps, miscellaneous manufacturing, aluminum, automobiles, plastics, and other categories. For U.S. exports and especially for U.S. imports from China, trade in more sophisticated products are less sensitive to exchange rates. Stock returns on many of the sectors with high export and import elasticities also fall when the dollar appreciates. Several manufacturing industries are thus exposed to a strong dollar. Policymakers could weaken the dollar and deflect protectionist pressure by promoting the euro, the yen, and the renminbi as alternative reserve currencies.\&nbsp;},
	author = {Willem Thornbecke}
}
@article {1314164,
	title = {The globalisation of scientific mobility, 1970{\textendash}2014},
	journal = {Applied Geography},
	volume = {96},
	number = {July},
	year = {2018},
	abstract = {This article provides an empirical assessment of global scientific mobility over the past four decades, based on bibliometric data. We find (i) an increasing diversity of origin and destination countries integrated in global scientific mobility, with (ii) the centre of gravity of scientific knowledge production and migration destinations moving continuously eastwards by about 1300 km per decade, (iii) an increase in average migration distances of scientists reflecting integration of global peripheries into the global science system, (iv) significantly lower mobility frictions for internationally mobile scientists compared to non-scientist migrants, (v) with visa restrictions establishing a statistically significant barrier affecting international mobility of scientists hampering the global diffusion of scientific knowledge.},
	author = {Mathias Czaika and Sultan Orazbayev}
}
@article {1314163,
	title = {Social networks and the intention to migrate},
	journal = {World Development},
	volume = {109},
	number = {September },
	year = {2018},
	pages = {360{\textendash}374},
	abstract = {Using a large individual-level survey spanning several years and more than 150 countries, we examine the importance of social networks in influencing individuals{\textquoteright} intention to migrate internationally and locally. We distinguish close social networks (composed of friends and family) abroad and at the current location, and broad social networks (composed of same-country residents with intention to migrate, either internationally or locally). We find that social networks abroad are the most important driving forces of international migration intentions, with close and broad networks jointly explaining about 37\% of variation in the probability intentions. Social networks are found to be more important factors driving migration intentions than work-related aspects or wealth (wealth accounts for less than 3\% of the variation). In addition, we find that having stronger close social networks at home has the opposite effect by reducing the likelihood of migration intentions, both internationally and locally.},
	url = {https://www.sciencedirect.com/science/article/pii/S0305750X18301591},
	author = {Miriam Manchin and Sultan Orazbayev}
}
@report {1313934,
	title = {Accessing Knowhow for Development},
	year = {2018},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Economies grow by adding new products and services to their production portfolio, not by producing more of the same kinds of products. The key to such diversification is access to know-how, but know-how often has to come from abroad. This is because it is often easier to move brains to new countries than to move new know-how into brains. In the experience of Singapore, India, Vietnam and most other dynamic economies, three channels of know-how transfer stand out: FDI, immigration and diaspora networks.



	In this lecture, Professor Hausmann explores the relationship between economic development and the accumulation of know-how. In particular, he discusses how to tackle Sri Lanka{\textquoteright}s limited export diversification.



	Video -\&nbsp;Accessing Know-how for Growth in Sri Lanka[[{"fid":"3727033","view_mode":"default","type":"media","attributes":{"height":"360","width":"480","alt":"Prof Ricardo Hausmann:  Acessing know-how for growth in Sri Lanka (With Slides) on YouTube","title":"Prof Ricardo Hausmann:  Acessing know-how for growth in Sri Lanka (With Slides)","class":"media-element file-default"}}]]



	Video - Full Q\&amp;A on Sri Lanka{\textquoteright}s export diversification[[{"fid":"3727034","view_mode":"default","type":"media","attributes":{"height":"360","width":"480","alt":"Full Q\&amp;A with Prof Ricardo Hausmann on Sri Lanka{\textquoteright}s export diversification on YouTube","title":"Full Q\&amp;A with Prof Ricardo Hausmann on Sri Lanka{\textquoteright}s export diversification","class":"media-element file-default"}}]]

},
	author = {Hausmann, Ricardo}
}
@report {1313834,
	title = {Can Industrial Zones Address the Binding Constraints to Sri Lanka{\textquoteright}s Growth?},
	year = {2018},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {This note collects evidence related to possible constraints to economic growth, and their relation with GoSL{\textquoteright}s industrial zone development agenda. We find that new zones are especially well-suited to help address Sri Lanka{\textquoteright}s lack of industrial land and high policy uncertainty, both of which may be holding back growth. Less clear, however, are zones{\textquoteright} impact on Sri Lanka{\textquoteright}s limited transport links beyond the Western Province. Finally, partnering with well-connected zone management companies may also help create opportunities to connect with firms in new, non-traditional sectors.
},
	author = {Noor, Sehar and O{\textquoteright}Brien, Timothy and Stock, Daniel}
}
@article {1313740,
	title = {Mapping the International Health Aid Community using Web Data},
	journal = {EPJ Data Science},
	volume = {7:12},
	year = {2018},
	abstract = {International aid is a complex system: it involves different issues, countries, and donors. In this paper, we use web crawling to collect information about the activities of international aid organizations on different health-related topics and network analysis to depict this complex system of relationships among organizations. By systematically collecting co-occurrences of issues, countries, and organization names from more than a hundred websites, we are able to construct multilayer networks describing, for instance, which issues are related to each other according to which organizations. Our results show that there is a surprising amount of homophily among organizations: organizations of the same type (multilateral, bilateral, private donors, etc.) tend to be co-cited in groups. We also create a taxonomy of issues that are generally mentioned together. Finally, we perform simulations, showing that messages originating from different organizations in the international aid community can have a different reach.},
	url = {https://epjdatascience.springeropen.com/articles/10.1140/epjds/s13688-018-0141-0},
	author = {Michele Coscia and Katsumasa Hamaguchi and Maria Elena Pinglo and Antonio Giuffrida}
}
@article {1312471,
	title = {Growth Accelerations Strategies},
	year = {2018},
	abstract = {Setting a country{\textquoteright}s structural growth rate on a higher path, i.e. sparking and sustaining a growth acceleration can have quantitatively huge implications for national income and, more broadly, for people{\textquoteright}s wellbeing. We develop a novel statistical framework to identify systematically the set of binding constraints that were unlocked before the 135 growth acceleration episodes that took place between 1962 and 2002 worldwide. We employ this information to characterise the acceleration process, which tends to be preceded by a deep recession and major economic policy changes. Once we combined this information with a set of counterfactual analyses, we find however that successful acceleration strategies should not contain off-the-shelf approaches or necessarily all-encompassing {\textquotedblleft}shock therapy{\textquotedblright} solutions. On the other hand, they call for a careful tailoring to local conditions. Richer countries tend to experience fewer accelerations, but once these have been ignited, they are better positioned to make the most out of them. Despite standard growth determinants doing a fairly good job at characterising successful accelerations, we note how take-offs remain extremely hard to engineer with a high degree of certainty.\&nbsp;},
	author = {Michele Peruzzi and Alessio Terzi}
}
@article {1307074,
	title = {Social Networks and the Intention to Migrate},
	year = {2018},
	abstract = {Using a large individual-level survey spanning several years and more than\&nbsp;150 countries, we examine the importance of social networks in influencing individuals{\textquoteright} intention to migrate internationally and locally. We distinguish\&nbsp;close social networks (composed of friends and family) abroad and at the current location, and broad social networks (composed of same-country residents with intention to migrate, either internationally or locally). We find that social networks abroad are the most important driving forces of international migration intentions, with close and broad networks jointly explaining about\&nbsp;37\% of variation in the probability intentions. Social networks are found to be\&nbsp;more important factors driving migration intentions than work-related aspects or wealth (wealth accounts for less than 3\% of the variation). In addition, we\&nbsp;nd that having stronger close social networks at home has the opposite effect by reducing the likelihood of migration intentions, both internationally and\&nbsp;locally.\&nbsp;},
	url = {https://www.sciencedirect.com/science/article/pii/S0305750X18301591?via\%3Dihub},
	author = {Miriam Manchin and Sultan Orazbayev}
}
@article {1302664,
	title = {Why do Industries Coagglomerate? How Marshallian Externalities Differ by Industry and Have Evolved Over Time},
	year = {2018},
	abstract = {The fact that firms benefit from close proximity to other firms with which they can exchange inputs, skilled labor or know-how helps explain why many industrial clusters are so successful. Studying the evolution of coagglomeration patterns, we show that which type of agglomeration benefits firms has drastically changed over the course of a century and differs markedly across industries. Whereas, at the beginning of the twentieth century, industries tended to colocate with their value chain partners, in more recent decades the importance of this channels has declined and colocation seems to be driven more by similarities industries{\textquoteright} skill requirements. By calculating industry-specific Marshallian agglomeration forces, we are able to show that, nowadays, skill-sharing is the most salient motive in location choices of services, whereas value chain linkages still explain much of the colocation patterns in manufacturing. Moreover, the estimated degrees to which labor and input-output linkages are reflected in an industry{\textquoteright}s coagglomeration patterns help improve predictions of city-industry employment growth.Original version of this paper was published in 2016.},
	author = {Dario Diodato and Neffke, Frank and Neave O{\textquoteright}Clery}
}
@article {1301560,
	title = {Macroeconomic Adjustment in the Euro Area},
	year = {2018},
	abstract = {Macroeconomic adjustment in the euro area periphery was more recessionary than pre-crisis imbalances would have warranted. To make this claim, this paper uses a Propensity Score Matching Model to produce counterfactuals for the Eurozone crisis countries (Greece, Portugal, Ireland, Cyprus, Spain) based on over 200 past macroeconomic adjustment episodes between 1960-2010 worldwide. At its trough, between 2010 and 2015 per capita GDP had contracted on average 11 percentage points more in the Eurozone periphery than in the standard counterfactual scenario. These results are not dictated by any specific country experience, are robust to a battery of alternative counterfactual definitions, and stand confirmed when using a parametric dynamic panel regression model to account more thoroughly for the business cycle. Zooming in on the potential causes, the lack of an independent monetary policy, while having contributed to a deeper recession, does not fully explain the Eurozone{\textquoteright}s specificity, which is instead to be identified in a sharper-than-expected contraction in investment and fiscal austerity due to high funding costs. Reading through the overall findings, there are reasons to believe that an incomplete Eurozone institutional setup contributed to aggravate the crisis through higher uncertainty.\&nbsp;},
	author = {Alessio Terzi}
}
@article {1372666,
	title = {Welcome Home in a Crisis: Effects of Return Migration on the Non-migrants{\textquoteright} Wages and Employment},
	journal = {European Economic Review},
	volume = {101},
	number = {January 2018},
	year = {2018},
	pages = {101-132},
	abstract = {The recent economic depression in Greece hit the population of Albanian migrants in Greece particularly hard, spurring a wave of return migration that increased the Albanian labor force by 5\% in less than four years, between 2011 and 2014. We study how this return migration affected the employment chances and earnings of Albanians who never migrated. We find positive effects on the wages of low-skilled non-migrants and overall positive effects on employment. The gains partially offset the sharp drop in remittances in the observed period. An important part of the employment gains are concentrated in the agricultural sector, where most return migrants engage in self-employment and entrepreneurship. Businesses run by return migrants seem to pull Albanians from non-participation, unemployment and subsistence agriculture into commercial agriculture.},
	url = {https://www.sciencedirect.com/science/article/pii/S0014292117301824},
	author = {Hausmann, Ricardo and Ljubica Nedelkoska}
}
@article {1281096,
	title = {Agents of Structural Change: The Role of Firms and Entrepreneurs in Regional Diversification},
	journal = {Economic Geography},
	year = {2018},
	pages = {1-26},
	abstract = {Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local or nonlocal establishment founders create most novelty in a region? We develop a theoretical framework that focuses on the roles different agents play in regional transformation. We then apply this framework, using Swedish matched employer{\textendash}employee data, to determine how novel the activities of new establishments are to a region. Incumbents mainly reinforce a region{\textquoteright}s current specialization: incumbent{\textquoteright}s growth, decline, and industry switching further align them with the rest of the local economy. The unrelated diversification required for structural change mostly originates via new establishments, especially via those with nonlocal roots. Interestingly, although entrepreneurs often introduce novel activities to a local economy, when they do so, their ventures have higher failure rates compared to new subsidiaries of existing firms. Consequently, new subsidiaries manage to create longer-lasting change in regions.},
	url = {http://www.tandfonline.com/eprint/mdYUTQk9U9UhMVhNGnig/full},
	author = {Neffke, Frank and Matte Hartog and Ron Boschma and Martin Henning}
}
@inbook {1272416,
	title = {Venezuela: Public Debate and the Management of Oil Resources and Revenues},
	booktitle = {Public Brainpower},
	year = {2018},
	pages = {347-367},
	publisher = {Palgrave Macmillan, Cham},
	organization = {Palgrave Macmillan, Cham},
	abstract = {Although Venezuela{\textquoteright}s experience since the 1980s would seem to make it a classic example of the resource curse, that perspective fails to explain the country{\textquoteright}s impressive economic, social and institutional performance{\textemdash}including healthy public debate{\textemdash}during the first\&nbsp;five decades after oil was first produced on a large scale. This chapter takes a long view of the Venezuelan experience and argues that this initial performance was lengthy and positive but fragile, given the incapacity of the country{\textquoteright}s institutions to adapt to the different environment that developed afterwards, characterized by high oil price volatility and significant and sudden declines in oil revenues. The prolonged initial period of equilibrium became a curse of sorts. Lacking adaptive efficiency, political institutions were forced to rely increasingly on maintaining an illusion of harmony, and as faltering performance became evident, Venezuelans began questioning the model and its hegemonic arrangements. The scope and magnitude of the economic, social and institutional devastation that followed were such that public debate became one the first casualties. One of the main problems in contemporary Venezuela is the polarization of politics. This makes it difficult for the country{\textquoteright}s population to arrive at reasonable solutions through public\&nbsp;discussion.},
	url = {https://link.springer.com/chapter/10.1007\%2F978-3-319-60627-9_19},
	author = {Ricardo Villasmil}
}
@article {1275271,
	title = {Learning to Improve the Investment Climate for Economic Diversification: PDIA in Action in Sri Lanka},
	year = {2017},
	abstract = {Many countries, like Sri Lanka, are trying to diversify their economies but often lack thecapabilities to lead diversification programs. One of these capabilities relates to preparing the\&nbsp;investment climate in the country. Many governments tackle this issue by trying to improve their\&nbsp;scores on {\textquoteleft}Doing Business Indicators{\textquoteright} which measure performance on general factors affecting\&nbsp;business globally (like how long it takes to open a business or pay taxes). Beyond these common\&nbsp;indicators, however, investors face context specific challenges when working in countries like\&nbsp;Sri Lanka that are not addressed in global indicators. Governments often lack the capabilities to\&nbsp;identify and resolve such issues. This paper narrates a recent initiative to establish these\&nbsp;capabilities in Sri Lanka. The initiative adopted a Problem Driven Iterative Adaptation (PDIA)\&nbsp;process, where a team of Sri Lankan officials worked with Harvard Center for International\&nbsp;Development (CID) facilitators to build capabilities over a six-month period. The paper tells the\&nbsp;story of this process, providing documented evidence of the progress over time (and describing\&nbsp;thinking behind the PDIA process as well). The paper will be of interest to those thinking about\&nbsp;the challenges associated with creating a climate that is investor or business friendly and to those\&nbsp;interested in processes (like PDIA) focused on building state capability and fostering policy\&nbsp;implementation.},
	author = {Matt Andrews and Ariyasinghe, Duminda and Amara S. Beling and Peter Harrington and McNaught, Tim and Fathima Nafla Niyas and Poobalan, Anisha and Mahinda Ramanayake and H. Senavirathne and Upatissa Sirigampala and Renuka M. Weerakone and W. A. F. Jayasiri Wijesooriya}
}
@report {1614120,
	title = {Recommendations for Trade Adjustment Assistance in Sri Lanka},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Sri Lanka has an excessively complex tariff structure that distorts the structure of the economy in important ways. It is a priority for the Government of Sri Lanka (GoSL) to rationalize the system in order to facilitate a transition to greater economic diversification, stronger export growth, and the emergence of new, higher paying jobs. Sri Lanka{\textquoteright}s New Trade Policy makes this tariff rationalization a priority. It also recognizes that tariff rationalization should go hand in hand with new trade adjustment assistance measures to support the adjustment of firms and of people. The New Trade Policy outlines the basic contours of tariff rationalization and trade adjustment assistance measures but does not provide a detailed roadmap.



	This discussion paper was prepared at the invitation of the Ministry of Development Strategies and International Trade (MoDSIT) as part of the Center for International Development{\textquoteright}s research project on sustainable and inclusive economic growth in Sri Lanka. The aim of the paper is to study policy tools that the GoSL could use to structure trade adjustment assistance in the context of tariff rationalization. In order to accomplish this aim, we begin by outlining the type of tariff rationalization that needs to take place in order to address key constraints to growth in a way that is sensitive to both government revenue needs and political economy considerations. We stress that tariff rationalization must be approached in a holistic way that treats the various tariffs and para-tariffs as interrelated, rather than an approach that attempts to address one part of the system at a time. A holistic approach would provide many degrees of freedom to solve the underlying problems in the system while increasing revenues and potentially generating strong public support. Critically, a holistic approach would allow for a single tariff rationalization plan to be phased in over a period of years in a predictable way, whereas attempts to rationalize the system one part at a time would lead to extreme uncertainty.



	With the principles of smart tariff rationalization in place, we draw upon international lessons and Sri Lanka{\textquoteright}s own institutional capabilities to recommend a two-tiered approach to helping industries and workers adjust. In each case, the first tier represents low-cost measures that can begin in the short term to help industries and workers, regardless of whether they will be negatively impacted by tariff rationalization, while the second tier of assistance applies only to trade-affected industries and workers and can be developed in the medium term. For industries, Tier 1 support involves the use of an innovative process of public-private problem solving of industry-specific constraints, and Tier 2 support involves the use of special safeguard measures to provide an objective and transparent process for determining which industries require longer phase out periods for tariff reductions versus the tariff rationalization plan. For workers, Tier 1 support involves improved access labor market information and training opportunities through the development of regional (or local) job centers. Tier 2 support provides government funding for training and job placement services. We conclude that this package of trade adjustment assistance measures could be used to complement a holistic tariff rationalization plan. But we caution that attempts to rush the implementation of these measures without careful design and communication could deeply undermine the potential for the reforms to work in solving underlying economic problems.

}
}
@inbook {1561673,
	title = {{\textquestiondown}Cu{\'a}nto puede tomarle a Venezuela recuperarse del colapso econ{\'o}mico?},
	booktitle = {Fragmentos de Venezuela: 20 escritos sobre econom{\'\i}a},
	year = {2017},
	pages = {91-114},
	publisher = {Universidad Cat{\'o}lica Andr{\'e}s Bello y Konrad Adenauer Stiftung},
	organization = {Universidad Cat{\'o}lica Andr{\'e}s Bello y Konrad Adenauer Stiftung},
	address = {Caracas},
	author = {Douglas Barrios and Miguel Santos},
	editor = {Balza, Ronald and Garcia-Larralde, Humberto}
}
@article {1372960,
	title = {Network Backboning with Noisy Data},
	journal = {2017 IEEE 33rd International Conference on Data Engineering (ICDE)},
	number = {May},
	year = {2017},
	pages = {425-436},
	abstract = {Networks are powerful instruments to study complex phenomena, but they become hard to analyze in data that contain noise. Network backbones provide a tool to extract the latent structure from noisy networks by pruning non-salient edges. We describe a new approach to extract such backbones. We assume that edge weights are drawn from a binomial distribution, and estimate the error-variance in edge weights using a Bayesian framework. Our approach uses a more realistic null model for the edge weight creation process than prior work. In particular, it simultaneously considers the propensity of nodes to send and receive connections, whereas previous approaches only considered nodes as emitters of edges. We test our model with real world networks of different types (flows, stocks, cooccurrences, directed, undirected) and show that our Noise-Corrected approach returns backbones that outperform other approaches on a number of criteria. Our approach is scalable, able to deal with networks with millions of edges.},
	url = {https://ieeexplore.ieee.org/document/7929996},
	author = {Michele Coscia and Neffke, Frank}
}
@report {1331899,
	title = {Assessing Rural Productive Capabilities and Identifying Potential Products by Municipality},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	How can the productive capabilities of each municipality be unleashed taking into consideration the resources\&nbsp;available to them? A first pass at this ambitious question begins by understanding the set of outputs\&nbsp;a municipality is capable of producing. We answer this by discovering relationships between agricultural\&nbsp;inputs and outputs and ask a relatively simpler question: how similar are agricultural outputs in terms of the\&nbsp;inputs they use? Answering this question is made difficult by the fact that most UPAs cultivate just one or\&nbsp;two crops. This may be a rational response to economies of scale. Given a plot of land and inputs, it may\&nbsp;be easier to cultivate one crop on the entire land than plant a number of them with each requiring a different\&nbsp;care regimen3. It may be that the inputs available only allow for a few types of crops.



	In this paper, we use the rural census data from Colombia to build an agricultural product space\&nbsp;capturing the similarities between outputs. We test the predictive power of the product space and use this to\&nbsp;answer the question above. In section 2, we discuss the various sources of data and how they are merged,\&nbsp;cleaned, and transformed before processing. In section 3, we look at some high level features of the dataset\&nbsp;and how inputs, outputs, and land use are related. In section 4, we explore the mechanics of diversification.



	We construct similarity and density matrices and show that they do indeed predict what a municipality\&nbsp;produces. Finally, in section 5 we use Machine Learning algorithms and the density matrices to predict\&nbsp;municipalities that are best suited to produce a given output. Further, we identify "missing" municipalitiesoutput\&nbsp;pairs i.e. municipalities that should be producing a given output at high yield but currently are not.\&nbsp;Finally, we summarize our findings and suggest areas for further work.



	In this report we will be making extensive use of concepts described in more detail in the companion\&nbsp;report "How Industry-Related Capabilities Affect Export Possibilities,"\&nbsp;especially with respect to Machine\&nbsp;Learning techniques.

},
	author = {Sid Ravinutala and Andres Gomez-Lievano and Eduardo Lora}
}
@report {1331896,
	title = {How Industry-Related Capabilities Affect Export Possibilities},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	address = {Cambridge},
	abstract = {
	The central question we will explore in this document is: Can we anticipate the opportunities that Colombian\&nbsp;cities have to export specific products based on their existing productive capabilities?



	In the following pages, we report a collection of results, analyses, and advances in which we assess how\&nbsp;industry-related capabilities affect export possibilities. Our final goal will be to create a single measure that\&nbsp;synthesizes all the knowledge and existing information about the productive capabilities of each city, both\&nbsp;{\textquotedblleft}horizontal{\textquotedblright} and {\textquotedblleft}vertical{\textquotedblright}, and that quantifies how competitive a city can be if it aims at exporting a given\&nbsp;product it does not yet export.



	This document is broken in two main efforts: First, we want to understand the {\textquotedblleft}mechanics{\textquotedblright} of diversification\&nbsp;processes. And second, we want to be able to provide recommendations of products that are not\&nbsp;produced in cities, but should be. The first effort requires a multitude of analyses, each trying to describe\&nbsp;the characteristics of firms, of cities, and of the mechanisms that expand the export baskets of places. The\&nbsp;second effort requires the development of a statistical model that is accurate when predicting the appearances\&nbsp;of products in cities. These two efforts, explaining and predicting, are complementary, but different.



	Explanations that lack the power of accurately predicting the future are useless in practice; predictions of\&nbsp;phenomena for which we lack understanding are dangerous. But together they provide a unified story that\&nbsp;can inform policy decisions.

},
	author = {Sid Ravinutala and Andres Gomez-Lievano and Eduardo Lora}
}
@report {1313960,
	title = {Immigration Policy Research},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Immigration and Economic Transformation: A Concept Note



	Ljubica Nedelkoska, Tim O{\textquoteright}Brien, Ermal Frasheri, Daniel Stock



	In May 2017, CID prepared a concept note that described the connection between immigration and knowhow transfer internationally and profiled the current state of low immigration levels and immigration policy issues in Sri Lanka. The note identifies immigration policy reform as an important area of opportunity for unleashing higher levels of entrepreneurship and the introduction of new knowhow for economic diversification in Sri Lanka, but stops short of providing specific recommendations. Instead, the note lays out broad ideas for making immigration policy more flexible and encourages the Government of Sri Lanka to activate a cross-government policy team that is capable of developing reforms that meet Sri Lanka{\textquoteright}s particular needs.\&nbsp;



	A Comparative View on of Immigration Frameworks in Asia: Enhancing the Flow of Knowledge through Migration



	Ermal Frasheri, Ljubica Nedelkoska, Sehar Noor, Tim O{\textquoteright}BrienLater in 2017, at the request of a policy team of the Government of Sri Lanka, CID conducted research to compare immigration policy frameworks in other countries in Asia to understand promising policy options for Sri Lanka. Our resulting research note focuses on Indonesia, Vietnam, Thailand, Malaysia, Hong Kong, and Singapore. We find that the immigration policies of the six countries vary across numerous dimensions as each country prioritizes attracting the talents, skills and resources it needs from abroad in different ways. These variations provide a range of examples that may be relevant to decision-makers in Sri Lanka. Additionally, we find an emerging pattern among the six countries where more developed economies tend to have more elaborate immigration systems and target a more diverse set of people. By looking at available data, we also confirm that more elaborate immigration systems are closely associated with more actual immigration, higher presence of foreign firms, and higher levels of foreign direct investment (FDI) among this group of countries. Based on the comparative analysis, together with the issues identified by the Department of Immigration and Emigration{\textquoteright}s Gap Analysis, it is possible to identify a number of principles around which future immigration reform in Sri Lanka should be organized.\&nbsp;

}
}
@report {1313957,
	title = {Increasing Your Chances of Success while Leaving Your Comfort Zone: Adapting Sri Lanka{\textquoteright}s Growth Model},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {View Ricardo Hausmann{\textquoteright}s presentation to the Ministry of Development Strategies and International Trade.},
	author = {Hausmann, Ricardo}
}
@report {1293562,
	title = {Diversification in the Industrial Sector of Albania: Identifying Strategic Areas},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	In this study, we analyzed Albania{\textquoteright}s industrial exports using the frameworks of the Product Space and Economic Complexity in order to determine which products Albania could diversify into in the near future. In particular, we identified groups of products that are technologically close to those which Albania already exports and which at the same time are technologically more sophisticated (more complex) than Albania{\textquoteright}s average exports. This analysis does not suggest that products that do not fulfill the criteria of technological proximity and product complexity should not be invested in. However, it suggests that some products may have higher chances of succeeding in Albania because of its existing technological capabilities, while also bringing about diversification towards more complex, higher value-added production.



	We find that the top two sectors that satisfy the criteria of being in close proximity to the existing technological capabilities in Albania, while also having relatively highly complex products, are Plastics/Rubbers and Agriculture/Foodstuffs. Within each of these sectors, we list more specific products that make for good candidates for diversification.

},
	author = {Georgi Klissurski and Bruno Zuccolo}
}
@article {1293121,
	title = {Inter-industry Labor Flows},
	journal = {Journal of Economic Behavior and Organization},
	volume = {142},
	number = {October},
	year = {2017},
	pages = {275-292},
	abstract = {Using German social security data, we study inter-industry labor mobility to assess how industry-specific human capital is and to determine which industries have similar human capital requirements. We find that inter-industry labor flows are highly concentrated in just a handful of industry pairs. Consequently, labor flows connect industries in a sparse network. We interpret this network as an expression of industries similarities in human capital requirements, or skill relatedness. This skill-relatedness network is stable over time, similar for different types of workers and independent of whether workers switch jobs locally or over larger distances. Moreover, in an application to regional diversification and local industry growth, skill relatedness proves to be more predictive than colocation or value chain relations. To facilitate future research, we make detailed inter-industry relatedness matrices online available.},
	url = {https://doi.org/10.1016/j.jebo.2017.07.003},
	author = {Neffke, Frank and Anne Otto and Antje Weyh}
}
@article {1282041,
	title = {What is different about urbanization in rich and poor countries? Cities in Brazil, China, India and the United States},
	journal = {Journal of Urban Economics},
	volume = {98},
	number = {March 2017},
	year = {2017},
	pages = {17-49},
	abstract = {Are the well-known facts about urbanization in the United States also true for the developing world? We compare American metropolitan areas with analogous geographic units in Brazil, China and India. Both Gibrat{\textquoteright}s Law and Zipf{\textquoteright}s Law seem to hold as well in Brazil as in the U.S., but China and India look quite different. In Brazil and China, the implications of the spatial equilibrium hypothesis, the central organizing idea of urban economics, are not rejected. The India data, however, repeatedly rejects tests inspired by the spatial equilibrium assumption. One hypothesis is that spatial equilibrium only emerges with economic development, as markets replace social relationships and as human capital spreads more widely. In all four countries there is strong evidence of agglomeration economies and human capital externalities. The correlation between density and earnings is stronger in both China and India than in the U.S., strongest in China. In India the gap between urban and rural wages is huge, but the correlation between city size and earnings is more modest. The cross-sectional relationship between area-level skills and both earnings and area-level growth are also stronger in the developing world than in the U.S. The forces that drive urban success seem similar in the rich and poor world, even if limited migration and difficult housing markets make it harder for a spatial equilibrium to develop.},
	url = {https://doi.org/10.1016/j.jue.2016.05.003},
	author = {Juan Pablo Chauvin and Glaeser, Edward and Yurean Ma and Kristina Tobio}
}
@article {1196411,
	title = {The Middle Productivity Trap: Dynamics of Productivity Dispersion},
	year = {2017},
	abstract = {Using a worldwide firm-level panel dataset I document a "U-shaped"\&nbsp;relationship between productivity growth and baseline levels within\&nbsp;each country and industry. That is, fast productivity growth is concentrated\&nbsp;at both ends of the productivity distribution. This resultserves as a potential explanation to two stylized facts documented in\&nbsp;the economic literature: the rising productivity dispersion within narrowly\&nbsp;defined sectors, and the increasing market share of few yet highly\&nbsp;productive firms.},
	author = {Dany Bahar}
}
@article {1034986,
	title = {Learning to Target for Economic Diversification: PDIA in Sri Lanka},
	year = {2017},
	abstract = {
	Many countries, like Sri Lanka, are trying to diversify their economies but often lack the capabilities to lead diversification programs. One of these capabilities relates to targeting new sectors to promote and pursue through a diversification policy: countries know they are {\textquoteleft}doomed to choose{\textquoteright} sectors to target,1 but lack effective capabilities to do the targeting. This paper narrates a recent (and ongoing) initiative to establish this kind of capability in Sri Lanka. The initiative adopted a Problem Driven Iterative Adaptation (PDIA) process, where a team of Sri Lankan officials worked with Harvard Center for International Development (CID) facilitators to build capabilities. The paper tells the story of this process, providing documented evidence of the progress over time and describing the thinking behind the PDIA process. It shows how a reliable targeting mechanism can emerge in a reasonably limited period, when a committed team of public officials are effectively authorized and engaged. The paper will be of particular interest to those thinking about targeting for diversification and to those interested in processes (like PDIA) which are focused on building state capability and fostering policy implementation in public contexts.



	1 The term here comes from Hausmann, R. and Rodrik, D. 2006. Doomed to Choose: Industrial Policy as Predicament. Draft.

},
	author = {Matt Andrews and Ariyasinghe, Duminda and Batuwanthudawa, Thamari and Darmasiri, Shivanthika and de Silva, Nilupul and Peter Harrington and Jayasinghe, Prasanna and Jayasinghe, Upul and Jayathilake, Gamini and Karunaratne, Jayani and Katugampala, Lalit and Liyanapathirane, Jeewani and Malalgoda, Champika and McNaught, Tim and Poobalan, Anisha and Ratnasekera, Sanjeewa and Samaraweera, Priyanka and Saumya, Erangani and Stock, Daniel and Senerath, Upali and Sibera, Ranjan and Walpita, Indira and Wijesinghe, Shamalie}
}
@article {1275261,
	title = {Learning to Engage New Investors for Economic Diversification: PDIA in Action in Sri Lanka},
	year = {2017},
	abstract = {Many countries, like Sri Lanka, are trying to diversify their economies but often lack thecapabilities to lead diversification programs. One of these capabilities relates to engaging new\&nbsp;investors{\textemdash}in new sectors{\textemdash}to bring their FDI and know-how to a new country and kick-start\&nbsp;new sources of activity. This paper narrates a recent (and ongoing) initiative to establish this kind\&nbsp;of capability in Sri Lanka. The initiative adopted a Problem Driven Iterative Adaptation (PDIA)\&nbsp;process, where a team of Sri Lankan officials worked with Harvard Center for International\&nbsp;Development (CID) facilitators to build capabilities over a six-month period. The paper tells the\&nbsp;story of this process, providing documented evidence of the progress over time (and describing\&nbsp;thinking behind the PDIA process as well). It shows how an investment engagement approach\&nbsp;can emerge in a reasonably limited period, when a committed team of public officials are\&nbsp;effectively authorized and engaged. The paper will be of particular interest to those thinking\&nbsp;about investor engagement challenges and to those interested in processes (like PDIA) focused\&nbsp;on building state capability and fostering policy implementation in public contexts.},
	author = {Matt Andrews and Ariyasinghe, Duminda and Krishantha Britto and Peter Harrington and Nelson Kumaratunga and M.K.D. Lawrance and McNaught, Tim and Hemadree Naotunna and Ganga Palaketiya and Poobalan, Anisha and Dilip Samarasinghe and Prasanjith Wijayathilake}
}
@article {1170456,
	title = {The Birth and Growth of New Export Clusters: Which Mechanisms Drive Diversification?},
	year = {2017},
	abstract = {Export diversification is associated with economic growth and development. Our paper explores competing mechanisms that mediate the emergence and growth of export products based on their economic relatedness to pre-existing exports. Our innovation is to simultaneously consider supply factors like labor, sourcing and technology; as well as demand factors like industry specific customer-linkages in a global setting. We find that, while technology and workforce similarity explain emergence and growth, pre-existing downstream industries remain a robust predictor of diversification, especially for jump starting new exports in developing countries. Our global stylized fact generalizes Javorcik{\textquoteright}s (2004) view that spillovers are more likely in backward linkages.},
	author = {Dany Bahar and Stein, Ernesto and Wagner, Rodrigo and Samuel Rosenow}
}
@article {1169771,
	title = {The Hardships of Long Distance Relationships: Time Zone Proximity and Knowledge Transmission within Multinational Firms},
	year = {2017},
	abstract = {Using a unique dataset on worldwide multinational corporations with precise location of headquarters and affiliates, I present evidence of a trade-off between distance to the headquarters and the knowledge intensity of the foreign subsidiary{\textquoteright}s economic activity, emerging from dynamics related to the proximity-concentration hypothesis. This trade-off is strongly diminished the higher the overlap in working hours between the headquarters and its foreign subsidiary. In order to rule out biases arising from confounding factors, I implement a regression discontinuity framework to show that the economic activity of a foreign subsidiary located just across the time zone line that increases the overlap in working hours with its headquarters is, on average, about one percent higher in the knowledge intensity scale. I find no evidence of the knowledge intensity and distance trade-off weakening when a non-stop flight exists between the headquarters and the foreign subsidiary. The findings suggest that lower barriers to real-time communication within the multinational corporation play important role in the location strategies of multinational corporations.},
	author = {Dany Bahar}
}
@article {1134741,
	title = {How to Cope with Volatile Commodity Export Prices: Four Proposals},
	year = {2017},
	abstract = {
	Countries that specialize in commodities have in recent years been hit by high volatility in world prices for their exports. This paper suggests four ways that commodity-exporters can make themselves less vulnerable. 



	(1) Option contracts can be used to hedge against short-term declines in the commodity price without giving up the upside, as Mexico has shown. 



	(2) Commodity-linked bonds can hedge longer-term risk, and often have a natural ultimate counter-party in multinational corporations that depend on the commodity as an input. 



	(3) The well-documented pro-cyclicality of fiscal policy among commodity exporters can be reduced by insulating official forecasters against an optimism bias, as Chile has shown. 



	(4) Monetary policy can be made automatically more counter-cyclical, judged by the criterion of currency appreciation in reaction to positive terms-of-trade shocks, under either of two regimes:\&nbsp;\&nbsp; peggers can add the export commodity to a currency basket (CCB, for {\textquotedblleft}Currency-plus-Commodity Basket{\textquotedblright}) and others can target Nominal Income instead of the CPI.

},
	author = {Frankel, Jeffrey}
}
@report {1123386,
	title = {Apocalypse Now: Venezuela, Oil and Reconstruction},
	year = {2017},
	institution = {Columbia University{\textquoteright}s School of International and Public Affairs },
	abstract = {
	Venezuela is at a breaking point. The political, economic, financial, social and humanitarian crisis that has gripped the country is intensifying. This unsustainable situation raises several urgent questions: Which path will the embattled OPEC country take out of the current turmoil? What type of political transition lies ahead? What short-term and long-term impact will the crisis have on its ailing oil industry, economy and bond debt? What would be the best and most effective prescription for oil and economic recovery under a new governance regime? To discuss these matters, the Center on Global Energy Policy brought together on June 19, 2017 a group of about 45 experts, including oil industry executives, investment bankers, economists and political scientists from leading think tanks and universities, consultants, and multilateral organization representatives. This note provides some of the highlights from that roundtable discussion, which was held under the Chatham House rule.

},
	url = {https://energypolicy.columbia.edu/research/global-energy-dialogue/apocalypse-now-venezuela-oil-and-reconstruction-global-energy-dialogue},
	author = {Antoine Halff and Francisco Monaldi and Luisa Palacios and Miguel Angel Santos}
}
@article {1094631,
	title = {International Emigrant Selection on Occupational Skills},
	year = {2017},
	abstract = {We present the first evidence that international emigrant selection on education and earnings\&nbsp;materializes through occupational skills. Combining novel data from a representative Mexican\&nbsp;task survey with rich individual-level worker data, we find that Mexican migrants to the United\&nbsp;States have higher manual skills and lower cognitive skills than non-migrants. Conditional on\&nbsp;occupational skills, education and earnings no longer predict migration decisions. Differential\&nbsp;labor-market returns to occupational skills explain the observed selection pattern and significantly\&nbsp;outperform previously used returns-to-skills measures in predicting migration. Results\&nbsp;are persistent over time and hold within narrowly defined regional, sectoral, and occupational\&nbsp;labor markets.},
	author = {Alexander Patt and Jens Ruhose and Simon Wiederhold and Miguel Flores}
}
@article {1093756,
	title = {Sanctions and Export Deflection: Evidence from Iran},
	journal = {Economic Policy},
	volume = {32},
	number = {90},
	year = {2017},
	pages = {319{\textendash}355},
	abstract = {Do export sanctions cause export deflection? Data on Iranian non-oil exporters between January 2006 and June 2011 shows that two-thirds of these exports were deflected to non-sanctioning countries after sanctions were imposed in 2008, and that at this time aggregate exports actually increased. Exporting firms reduced prices and increased quantities when exporting to a new destination, however, and suffered welfare losses as a result.},
	url = {https://academic.oup.com/economicpolicy/issue/32/90},
	author = {Haidar, Jamal Ibrahim}
}
@article {1073431,
	title = {Appraising the Economic Potential of Panama: Policy Recommendations for Sustainable and Inclusive Growth},
	year = {2017},
	abstract = {
	This report aims to summarize the main findings of the project as gathered by the three baseline documents, and frame them within a coherent set of policy recommendations that can help Panama to maintain their growth momentum in time and make it more inclusive. Three elements stand out as cornerstones of our proposal:



	(i) attracting and retaining qualified human capital;



	(ii) maximizing the diffusion of know-how and knowledge spillovers, and



	(iii) leveraging on public-private dialog to tackle coordination problems that are hindering economic activity outside the Panama-Col{\'o}n axis.

},
	author = {Hausmann, Ricardo and Miguel Angel Santos and Juan Obach}
}
@article {1065856,
	title = {Fool{\textquoteright}s Gold: On the Impact of Venezuelan Devaluations in Multinational Stock Prices},
	year = {2017},
	abstract = {
	This paper documents negative cumulative abnormal returns (CARs) to five exchange rate devaluations in Venezuela within the context of stiff exchange controls and large black-market premiums, using daily stock prices for 110 multinationals with Venezuelan subsidiaries. The results suggest evidence of statistically and economically significant negative CARs of up to 2.07\% over the ten-day event window. We find consistent results using synthetic controls to causally infer the effect of each devaluation on the stock prices of global firms active in the country at the time of the event. Our results are at odds with the predicaments of the efficient market hypothesis stating that predictable devaluations should not impact stock prices of large multinational companies on the day of the event, and even less so when they happen in small countries. We interpret these results as suggestive indication of market inefficiencies in the process of asset pricing.

},
	author = {Dany Bahar and Carlos Alberto Molina and Miguel Angel Santos}
}
@article {1062131,
	title = {Wide-reaching Structural Reforms and Growth: A Cross-country Synthetic Control Approach},
	year = {2017},
	abstract = {
	At a time of slow growth in several advanced and emerging countries, calls for more structural reforms are multiplying. However, estimations of the short- and medium-term impact of these reforms on GDP growth remain methodologically problematic and still highly controversial. We contribute to this literature by making a novel use of the non-parametric Synthetic Control Method to estimate the impact of 23 wide-reaching structural reform packages (including both real and financial sector measures) rolled out in 22 countries between 1961 and 2000. Our results suggest that, on average, reforms started having a significant positive effect on GDP per capita only after five years. Ten years after the beginning of a reform wave, GDP per capita was roughly 6 percentage points higher than the synthetic counterfactual scenario. However, average point estimates mask a large heterogeneity of outcomes. Benefits tended to materialise earlier, but overall to be more limited, in advanced economies than in emerging markets. These results are confirmed when we use a parametric dynamic panel fixed effect model to control for the rich dynamics of GDP, and are robust to a variety of alternative specifications, placebo and falsification tests, and to different indicators of reform.\&nbsp;

},
	author = {Pasquale Marco Marrazzo and Alessio Terzi}
}
@report {1057926,
	title = {What is the Binding Constraint to Growth in Albania?},
	year = {2017},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	About four years ago, at the onset of CID{\textquoteright}s engagement in Albania, the country faced two issues that were threatening its macro-fiscal stability: a skyrocketing public debt and an insolvent, publicly-owned electricity distribution system that was plagued by theft and technical inefficiency. These two interlinked issues constrained both short-term economic growth and the ability of the country to develop new drivers of long-term growth. Over the subsequent years, the government was able to successfully respond to these constraints through a now-concluded IMF program and through a series of reforms in the electricity sector. With these constraints now relaxed, CID saw the need for a new analysis of the current and emerging constraints to growth in Albania. This analysis will guide future research and inform the government and non-government actors on emerging economic issues for prioritization.



	While growth has accelerated over the last several years, to over 3\% in 2016, this is not a pace that will allow for a rapid convergence of incomes and well-being in Albania with that of developed countries in Europe and elsewhere. This growth diagnostic attempts to identify the binding constraint to sustainably higher economic growth in Albania.



	Recognizing that economic growth requires a number of complementary inputs, from roads to human capital to access to finance and many more, this report compares across eight potentially binding constraints using the growth diagnostic methodology to identify which constraint is most binding. This research was conducted throughout 2016, building on prior research conducted by CID and other organizations in Albania. Each constraint discussed in this report is cited by analysts within or outside the country as the biggest problem for growth in Albania. Through the growth diagnostic framework, we are able to evaluate the evidence and show that some constraints are more binding than others.



	Despite serious issues in many other areas, we find that the binding constraint to stronger growth in Albania is a lack of productive knowhow. By {\textquotedblleft}knowhow,{\textquotedblright} we mean the knowledge and skills needed to produce complex goods and services. Albania faces a unique knowhow constraint that is deeply rooted in its closed-off past, and the limited diversification that has taken place in the private sector can, in nearly all cases, be linked to distinct inflows of knowhow. The strongest sources of knowhow inflows into Albania have been through foreign direct investment and immigration, especially returning members of the diaspora who start new businesses or upgrade the productivity of existing businesses.



	The evidence also points to particular failings in rule of law in Albania that play an important role in keeping Albania in a low-knowhow equilibrium. Weaknesses in Albania{\textquoteright}s rule of law institutions, including frequent policy reversals and corruption in the bureaucracy and judiciary, increase the risk of investments and transaction costs of business. While it is difficult to separate perceptions from reality in this area, both perceptions of weak rule of law and actual rule of law failings appear to play critical roles in constraining more diversified investment in Albania. We find that while existing firms in Albania successfully navigate the rule of law weaknesses, and in some cases benefit from the system, potential new investors are acutely sensitive to rule of law issues.



	\&nbsp;

},
	author = {Tim O{\textquoteright}Brien and Ljubica Nedelkoska and Ermal Frasheri}
}
@article {1034951,
	title = {The Currency-Plus-Commodity Basket: A Proposal for Exchange Rates in Oil-Exporting Countries to Accommodate Trade Shocks Automatically},
	year = {2017},
	abstract = {
	The paper proposes an exchange rate regime for oil-exporting countries. The goal is to achieve the best of both flexible and fixed exchange rates. The arrangement is designed to deliver monetary policy that counteracts rather than exacerbates the effects of swings in the oil market, while yet offering the day-to-day transparency and predictability of a currency peg. The proposal is to peg the national currency to a basket, but a basket that includes not only the currencies of major trading partners (in particular, the dollar and the euro), but also the export commodity (oil). The plan is called Currency-plus-Commodity Basket (CCB). The paper begins by fleshing out the need for an innovative arrangement that allows accommodation to trade shocks. The analysis provides evidence from six Gulf countries that periods when their currencies were {\textquotedblleft}undervalued{\textquotedblright}, in the sense that the actual foreign exchange value lay below what it would have been under the CCB proposal, were periods of overheating as reflected in high inflation and of external imbalance as reflected in high balance of payments surpluses. Conversely, periods when the currencies were {\textquotedblleft}overvalued,{\textquotedblright} in the sense that their foreign exchange value lay above what it would have been under CCB, featured unusually low inflation and low balance of payments. These results are suggestive of the implication that the economy would have been more stable under CCB. The last section of the paper offers a practical blueprint for detailed implementation of the proposal.

},
	author = {Jeffrey A. Frankel}
}
@article {1014936,
	title = {Sanctions and Export Deflection: Evidence from Iran},
	year = {2017},
	abstract = {
	Do export sanctions cause export deflection? Data on Iranian non-oil exporters between January 2006 and June 2011 shows that two-thirds of these exports were deflected to non-sanctioning countries after sanctions were imposed in 2008, and that at this time aggregate exports actually increased. Exporting firms reduced prices and increased quantities when exporting to a new destination, however, and suffered welfare losses as a result.

},
	author = {Haidar, Jamal Ibrahim}
}
@article {1002396,
	title = {Institutions vs. Social Interactions in Driving Economic Convergence: Evidence from Colombia},
	year = {2017},
	abstract = {Are regions poor because they have bad institutions or are they poor because they are disconnected from the social channels through which technology diffuses? This paper tests institutional and technological theories of economic convergence by looking at income convergence across Colombian municipalities. We use formal employment and wage data to estimate growth of income per capita at the municipal level. In Colombia, municipalities are organized into 32 departamentos or states. We use cellphone metadata to cluster municipalities into 32 communication clusters, defined as a set of municipalities that are densely connected through phone calls. We show that these two forms of grouping municipalities are very different. We study the effect on municipal income growth of the characteristics of both the state and the communication cluster to which the municipality belongs. We find that belonging to a richer communication cluster accelerates convergence, while belonging to a richer state does not. This result is robust to controlling for state fixed effects when studying the impact of communication clusters and vice versa. The results point to the importance of social interactions rather than formal institutions in the growth process.\&nbsp;},
	author = {Michele Coscia and Cheston, Timothy and Hausmann, Ricardo}
}
@article {976926,
	title = {Welcome Home in a Crisis: Effects of Return Migration on the Non-migrants{\textquoteright} Wages and Employment},
	year = {2017},
	abstract = {
	The recent economic depression in Greece hit the population of Albanian migrants in Greece particularly hard, spurring a wave of return migration which increased the Albanian labor force by 5 percent in less than four years, between 2011 and 2014. We study how this return migration affected the employment chances and earnings of Albanians who never migrated. We find positive effects on the wages of low-skilled non-migrants and overall positive effects on employment. The gains partially offset the sharp drop in remittances in the observed period. An important part of the employment gains are concentrated in the agricultural sector, where most return migrants engage in self-employment and entrepreneurship. Businesses run by return migrants seem to pull Albanians from non-participation, unemployment and subsistence agriculture into commercial agriculture.\&nbsp;

},
	author = {Hausmann, Ricardo and Ljubica Nedelkoska}
}
@article {976116,
	title = {Coworker complementarity},
	year = {2017},
	abstract = {How important is working with people who complement one{\textquoteright}s skills? Using administrative data that record which of 491 educational tracks each worker in Sweden absolved, I quantify the educational fit among coworkers along two dimensions: coworker match and coworker substitutability. Complementary coworkers raise wages with a comparable factor as does a college degree, whereas working with close substitutes is associated with wage penalties. Moreover, this coworker fit does not only account for large portions of the urban and large-plant wage premiums, but the returns to own schooling and the urban wage premium are almost completely contingent on finding complementary coworkers.},
	author = {Neffke, Frank}
}
@article {1561288,
	title = {Economic Development and the Accumulation of Know-how},
	journal = {Welsh Economic Review},
	volume = {24},
	number = { },
	year = {2016},
	pages = {13-16},
	abstract = {Economic development depends on the accumulation of know-how. The theory of economic growth has long emphasised the importance of something called technical progress, but what that is, and how it grows has not been well elucidated. Technical progress is really based on three separate aspects: tools, or embodied knowledge, recipes or blueprints or codified knowledge and know-how or tacit knowledge. While tools can be shipped and codes can be e-mailed, know-how exists only as a particular wiring of the brain and as such it is hard to move around. That is why the growth of know-how can easily become the binding constraint on the development process.},
	url = {https://wer.cardiffuniversitypress.org/articles/abstract/10.18573/j.2016.10049/},
	author = {Hausmann, Ricardo}
}
@report {1314185,
	title = {Albania{\textquoteright}s Credit Market},
	year = {2016},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Credit market activity in Albania has been sluggish in recent years in spite of low and declining interest rates.\&nbsp;The economy lost its growth momentum after 2009. Investment and lending activity slowed down substantially despite low interest rates, relative macroeconomic resilience, and available capacity in the private sector to take on more debt. This study analyzes the supply (lenders{\textquoteright}) and demand (borrowers{\textquoteright}) sides of the market.



	The reason behind the credit market failure\&nbsp;is a supply-demand mismatch.\&nbsp;Poor financial intermediation is the main problem on the supply side. Despite excess liquidity in the financial sector, banks are excessively risk-averse, bank practices and products are unsophisticated, and non-bank financial market is underdeveloped. Excessive risk aversion translates into tight credit standards, credit rationing and credit crunch for some economic sectors, in particular those dominated by SMEs. On the demand side, firms overall have a low appetite to expand, limited capacity to create bankable and financially viable projects, and are also constrained by infrastructural gaps and economic uncertainty. The mismatch results from the fragmentation of the credit market, with reliable borrowers from traditional sectors having easy access to finance, and other segments being almost fully deprived of credit.



	Government and donor-led policies to mitigate the problem have had little success.\&nbsp;Albania enjoys access to a number of domestic and external funding schemes primarily focused on alleviating funding constraints for credit-deprived sectors, but these programs have been ineffective. Further study is needed to understand the reasons behind the limited success of these programs.



	A National Development Bank (NDB) could address some of the observed credit market challenges.\&nbsp;While an NDB{\textquoteright}s ability to directly resolve demand-side constraints would be limited, an NDB could effectively tackle supply-side constraints in the credit market as well as provide surveillance and collect information from the private sector, leverage technical assistance, and develop tailored financial products. Establishing an NDB should be considered carefully, taking into account functional, governance, funding, staffing and other risk factors.

},
	author = {Guven, Duygu and Miagkyi, Mykola}
}
@report {1313965,
	title = {Constraints to Sustained and Inclusive Growth in Sri Lanka},
	year = {2016},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {In late 2015, CID was requested to conduct an initial analysis of constraints to sustained and inclusive economic growth in Sri Lanka. The findings of this analysis were presented at the Sri Lanka Economic Forum in Colombo in January 2016. This presentation outlined the initial findings and offered a series of questions that were then discussed at length with policymakers and academics during the two-day forum. The initial analysis found that recent growth and the sustainability of growth moving forward are constrained by weakness in Sri Lanka{\textquoteright}s balance of payments, where a trade imbalance combined with low levels of foreign direct investment effectively puts a speed limit on economic growth. While monetary and exchange rate policy could be used to soften this constraint, solving the underlying problem requires structural transformation, which has proven difficult in Sri Lanka. At the same time, the analysis identified the government{\textquoteright}s inability to raise revenues as a major risk that threatens to be more binding moving forward. Finally, the analysis identified the primary dimensions of inequality in the country as between regions and between cities and rural areas.},
	author = {Hausmann, Ricardo}
}
@report {1313964,
	title = {Sri Lanka{\textquoteright}s Edible Oils Exports},
	year = {2016},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {By request of the Government of Sri Lanka, the Growth Lab at Harvard{\textquoteright}s Center for International Development reviewed edible oils exports in September 2016 based on the latest available international trade data. The analysis identified the products and markets key to Sri Lanka{\textquoteright}s edible oils sector and compared with competitor countries. Although edible oils are non-complex products that make up a small share of the country{\textquoteright}s total exports (0.5\% in 2014), they help to diversify Sri Lankan exports and may serve as stepping stones toward further diversification into other more complex exports in the future. Coconut oil, which made up 86\% of Sri Lanka{\textquoteright}s edible oils exports in 2014, is particularly promising, with exports growing by more than a factor of 10 in just five years and much room to grow based on global demand.}
}
@report {1313963,
	title = {Targeting Investment from Japan: Promising Leads in Targeted Sectors in Sri Lanka},
	year = {2016},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {In October 2016, at the request of the Government of Sri Lanka and in advance of a investment promotion trip to Japan, this presentation was prepared to experiment with new forms of communication to Japanese industry groups. The Growth Lab at CID used export data, qualitative research on companies, and comparative work on free trade agreements to identify promising opportunities for Japanese investment in Sri Lanka in targeted sectors, which were emerging through work by Sri Lanka{\textquoteright}s Ministry of Development Strategies and International Trade with the support of CID.}
}
@article {1281001,
	title = {From Financial Repression to External Distress: The Case of Venezuela},
	journal = {Emerging Markets Finance and Trade},
	number = {Jan. 2016},
	year = {2016},
	pages = {1-30},
	abstract = {Recent work suggests a connection between domestic debt and external default. We examine potential linkages for Venezuela, where the evidence reveals a nexus among domestic debt, financial repression, and external vulnerability. The financial repression tax (as a share of GDP) is similar to OECD economies, in spite of higher debt ratios in the latter. The financial repression {\textquotedblleft}tax rate{\textquotedblright} is higher in years of exchange controls and legislated interest rate ceilings. We document a link between domestic disequilibrium and a weakening of the net foreign asset position via private capital flight. We suggest these findings are not unique to Venezuela.},
	url = {http://dx.doi.org/10.1080/1540496X.2015.1105614},
	author = {Miguel Santos and Reinhart, Carmen}
}
@article {1280991,
	title = {The Right Fit for the Wrong Reasons: Real Business Cycle in an Oil-Dependent Economy},
	journal = {Latin American Journal of Economics (former Cuadernos de Econom{\'\i}a)},
	volume = {53},
	number = {1},
	year = {2016},
	pages = {61-94},
	abstract = {Venezuela has an oil-dependent economy subject to large exogenous shocks and a rigid labor market. These features go straight to the heart of two weaknesses of real business cycle (RBC) theory widely reported in the literature: neither shocks are volatile enough nor real salaries suf ficiently flexible as required by the RBC framework to replicate the behavior of the economy. We calibrate a basic RBC model and compare a set of relevant statistics from RBC-simulated time series with actual data for Venezuela and the benchmark case of the United States (1950{\textendash}2008). Despite Venezuela being a heavily regulated economy, RBC-simulated series provide a good fit, in particular with regard to labor markets.},
	url = {https://www.jstor.org/stable/e90003530},
	author = {Miguel Santos}
}
@article {1093851,
	title = {Do Political Connections Reduce Job Creation? Evidence from Lebanon},
	year = {2016},
	abstract = {Using firm-level census data, we determine how politically-connected firms (PCFs) reduce job creation in Lebanon. After observing that large firms account for the bulk of net job creation, we find that PCFs are larger and create more jobs, but are also less productive, than non-PCFs in their sectors. On a net basis, at the sector-level, each additional PCF reduces jobs created by 7.2\% and jobs created by non-PCFs by 11.3\%. These findings support the notion that politically-connected firms are used for clientelistic purposes in Lebanon, exchanging privileges for jobs that benefit their patrons{\textquoteright} supporters.},
	author = {Ishac Diwan and Haidar, Jamal Ibrahim}
}
@article {1093531,
	title = {A Tale of Two Clusters: The Evolution of Ireland{\textquoteright}s Economic Complexity since 1995},
	journal = {Journal of the Statistical and Social Inquiry Society of Ireland},
	volume = {XLV 2015-16},
	year = {2016},
	pages = {16-66},
	abstract = {This paper characterizes the evolution of the manufacturing and industrial export structure of Ireland since 1995 within the framework of Economic Complexity and the Product Space. We observe a high level of specialisation in Ireland{\textquoteright}s export structure, coupled with high income per capita as compared to the complexity level of its industrial activities (as captured by its Economic Complexity Index). We identify a dual structure within the economy, with domestic and foreign-owned exporters exhibiting distinct characteristics. In the latter case, we observe a recent consolidation and reduction in complexity level by the foreign-owned high tech pharmaceuticals and electronics sectors, with limited evidence of spill-overs leading to growth of domestic firms in these sectors. This contrasts with a dynamic and growing domestic food and agriculture sector, which is well positioned for continued expansion of Ireland{\textquoteright}s indigenous activities into more complex goods. Finally, we illustrate this framework as a tool for policy-makers by identifying some potential new sectors that share many inputs with Ireland{\textquoteright}s current domestic capability base, and could increase Ireland{\textquoteright}s complexity level for future growth.},
	url = {http://www.tara.tcd.ie/handle/2262/79409},
	author = {Neave O{\textquoteright}Clery}
}
@article {1062081,
	title = {Of Knights and Squires: European Union and the Modernization of Albania},
	year = {2016},
	note = {This paper is published in the North Carolina Journal of International Law (Volume 42, Issue 1)\&nbsp;},
	abstract = {In this paper, I question the idea that a country develops and democratizes merely by pursuing a model of deeper regional integration with more prosperous countries. I examine the case of Albania{\textquoteright}s integration into the European Union to show that more often than not, transition reproduces hierarchies and inequities that usually underpin relations between a prosperous center and a backward periphery. Instead of being a cure, a solution to the political primitivism and underdevelopment, the story with Europeanization as a model of modernization suggests that despite noble intentions and goals, reforms in the name of the European Union end up foregrounding a security state apparatus, impose an ideological hegemony, and maintain a political culture that inhibits democratization, while discouraging and displacing the need for endogenous growth strategies.},
	author = {Ermal Frasheri}
}
@article {1061931,
	title = {Of Knights and Squires: European Union and the Modernization of Albania},
	journal = {North Carolina Journal of International Law},
	volume = {42},
	number = {1},
	year = {2016},
	pages = {1},
	abstract = {In this paper, I question the idea that a country develops and democratizes merely by pursuing a model of deeper regional integration with more prosperous countries. I examine the case of Albania{\textquoteright}s integration into the European Union to show that more often than not, transition reproduces hierarchies and inequities that usually underpin relations between a prosperous center and a backward periphery. Instead of being a cure, a solution to the political primitivism and underdevelopment, the story with Europeanization as a model of modernization suggests that despite noble intentions and goals, reforms in the name of the European Union end up foregrounding a security state apparatus, impose an ideological hegemony, and maintain a political culture that inhibits democratization, while discouraging and displacing the need for endogenous growth strategies.},
	author = {Ermal Frasheri}
}
@article {972111,
	title = {The Path to Labor Formality: Urban Agglomeration and the Emergence of Complex Industries},
	year = {2016},
	abstract = {
	Labor informality, associated with low productivity and lack of access to social security services, dogs developing countries around the world. Rates of labor (in)formality, however, vary widely within countries. This paper presents a new stylized fact, namely the systematic positive relationship between the rate of labor formality and the working age population in cities. We hypothesize that this phenomenon occurs through the emergence of complex economic activities: as cities become larger, labor is allocated into increasingly complex industries as firms combine complementary capabilities derived from a more diverse pool of workers. Using data from Colombia, we use a network-based model to show that the technological proximity (derived from worker transitions between industry pairs) of current industries in a city to potential new complex industries governs the growth of the formal sector in the city. The mechanism proposed has robust strong predictive power, and fares better than alternative explanations of (in)formality.

},
	author = {Neave O{\textquoteright}Clery and Andres Gomez-Lievano and Eduardo Lora}
}
@article {963671,
	title = {City Size, Distance and Formal Employment},
	year = {2016},
	abstract = {Cities thrive through the diversity of their occupants because the availability of complementary skills enables firms in the formal sector to grow, delivering increasingly sophisticated products and services. The appearance of new industries is path dependent in that new economic activities build on existing strengths, leading cities to both diversify and specialize in distinct areas. Hence, the location of necessary capabilities, and in particular the distance between firms and people with the skills they need, is key to the success of urban agglomerations. Using data for Colombia, this paper assesses the extent to which cities benefit from skills and capabilities available in their surrounding catchment areas. Without assuming a prioria a definition for cities, we sequentially agglomerate the 96 urban municipalities larger than 50,000 people based on commuting time. We show that a level of agglomeration equivalent to between 45 and 75 minutes of commuting time, corresponding to between 62 and 43 cities, maximizes the impact that the availability of skills has on the ability of agglomerations to generate formal employment. Smaller urban municipalities stand to gain more in the process of agglomeration. A range of policy implications are discussed.},
	author = {Neave O{\textquoteright}Clery and Eduardo Lora}
}
@article {961821,
	title = {Explaining the Prevalence, Scaling and Variance of Urban Phenomena},
	year = {2016},
	note = {This paper is published in the journal, Nature: Human Behavior.},
	abstract = {The prevalence of many urban phenomena changes systematically with population size1. We\&nbsp;propose a theory that unifies models of economic complexity2, 3 and cultural evolution4 to\&nbsp;derive urban scaling. The theory accounts for the difference in scaling exponents and average prevalence across phenomena, as well as the difference in the variance within phenomena across cities of similar size. The central ideas are that a number of necessary complementary factors must be simultaneously present for a phenomenon to occur, and that the diversity of factors is logarithmically related to population size. The model reveals that phenomena that require more factors will be less prevalent, scale more superlinearly and show larger variance across cities of similar size. The theory applies to data on education, employment, innovation, disease and crime, and it entails the ability to predict the prevalence of a phenomenon across cities, given information about the prevalence in a single city.},
	author = {Andres Gomez-Lievano and Oscar Patterson-Lomba and Hausmann, Ricardo}
}
@article {961946,
	title = {Explaining the prevalence, scaling and variance of urban phenomena},
	journal = {Nature Human Behavior},
	year = {2016},
	month = {Dec 2016},
	abstract = {The prevalence of many urban phenomena changes systematically with population size 1 . We propose a theory that unifies models of economic complexity 2,3  and cultural evolution 4  to derive urban scaling. The theory accounts for the difference in scaling exponents and average prevalence across phenomena, as well as the difference in the variance within phenomena across cities of similar size. The central ideas are that a number of necessary complementary factors must be simultaneously present for a phenomenon to occur, and that the diversity of factors is logarithmically related to population size. The model reveals that phenomena that require more factors will be less prevalent, scale more superlinearly and show larger variance across cities of similar size. The theory applies to data on education, employment, innovation, disease and crime, and it entails the ability to predict the prevalence of a phenomenon across cities, given information about the prevalence in a single city.Related Content: The Urban Theory of EverythingHarvard Magazine: Recipes for Thriving Cities},
	url = {http://www.nature.com/articles/s41562-016-0012},
	author = {Andres Gomez-Lievano and Oscar Patterson-Lomba and Hausmann, Ricardo}
}
@article {958581,
	title = {Towards a framework for preventing community violence among youth},
	journal = {Psychology, Health \& Medicine},
	year = {2016},
	month = {14 Dec, 2016},
	pages = {1-20},
	abstract = {This article, in an effort to assist the selection and deployment of evidence-informed strategies, proposes a new conceptual framework for responding to community violence\&nbsp;among youth. First, the phenomenon of community violence is understood in context using a new violence typology organized along a continuum. Second, the need for a new anti-community violence framework is established. Third, a framework is developed, blending concepts from the fields of public safety and public health. Fourth, evidence from systematic reviews and meta-analyses concerning community violence is summarized and categorized. Finally, an anti-violence framework populated with evidence-informed strategies is presented and discussed.},
	url = {http://www.tandfonline.com/doi/abs/10.1080/13548506.2016.1257815},
	author = {Thomas Abt}
}
@article {948601,
	title = {Exploring the Uncharted Export: An Analysis of Tourism-Related Foreign Expenditure with International Spend Data},
	year = {2016},
	note = {
	HKS News: {\textquoteright}Tourism Spaces{\textquoteright} Provide New Opportunities for Economic Growth



	Coscia blog: Exploring the uncharted export

},
	abstract = {
	Tourism is one of the most important economic activities in the world: for many countries it represents the single largest product in their export basket. However, it is a product difficult to chart: "exporters" of tourism do not ship it abroad, but they welcome importers inside the country. Current research uses social accounting matrices and general equilibrium models, but the standard industry classifications they use make it hard to identify which domestic industries cater to foreign visitors. In this paper, we make use of open source data and of anonymized and aggregated transaction data giving us insights about the spend behavior of foreigners inside two countries, Colombia and the Netherlands, to inform our research. With this data, we are able to describe what constitutes the tourism sector, and to map the most attractive destinations for visitors. In particular, we find that countries might observe different geographical tourists{\textquoteright} patterns - concentration versus decentralization -; we show the importance of distance, a country{\textquoteright}s reported wealth and cultural affinity in informing tourism; and we show the potential of combining open source data and anonymized and aggregated transaction data on foreign spend patterns in gaining insight as to the evolution of tourism from one year to another.

},
	author = {Michele Coscia and Hausmann, Ricardo and Neffke, Frank}
}
@article {945476,
	title = {Weathering Collapse: An Assessment of the Financial and Operational Situation of the Venezuelan Oil Industry},
	year = {2016},
	abstract = {Venezuela has one of the most abundant geological endowments in the world. Oil proven reserves are among the largest globally, even if a more conservative criterion than the one used by the current government is applied. However, these resources are qualitatively different than those of other abundant regions such as the Middle East. The large majority constitutes extra-heavy oil, which generally requires higher oil prices to be extracted profitably.During the last decade, the Venezuelan oil industry wasted a unique opportunity to increase investment and production. At the high oil prices that prevailed, the massive oil reserves could have been monetized by rapidly increasing production with a large margin of profitability. Quite to the contrary, production steadily dropped due either to lack of investment in the new unconventional oil projects or for failing to compensate the decline of the older conventional fields. It is a tragic story of great potential with dismal performance.A series of trends were negatively impacting the Venezuelan oil industry even before the oil price collapse in 2014. From the revenue side, although oil prices showed an increase in real terms of 120\% between 2000 and 2014, the barrels that effectively generate cash for Venezuela have shown a continuous decline. This is not just because production has been declining for the most part during the last eighteen years (a trend that has gotten significantly worse during the last year), but also because of a number of developments. First, during that period, total exports have declined more rapidly than production, and recently, net exports have declined more than total exports. Consumption in the massively subsidized domestic market increased until 2013 (when it started to decline likely because of the recession in the local economy), while imports of oil products for the domestic market have increased since 2012. The domestic market not only generates negative cash-flow for the national oil company (NOC), PDVSA, but also its expansion reduced the barrels available to export. More recently, there has also been an increase in imports of light oil and naphtha as diluents for the extra-heavy oil. Second, the Venezuelan production basket has become heavier and the share of unconventional production, generally less profitable, has increased. Third, the production wholly operated by PDVSA has been falling much more rapidly, while the production share of joint-ventures increased. Fourth, a significant share of the exports to Latin America and the Caribbean is subsidized (although these exports have declined recently). Fifth, some oil exports are committed to repay debts of PDVSA and specially the Venezuelan government, limiting the actual cash flow received by the company. In particular, the government{\textquoteright}s debt agreements with China involve a significant and increasing amount of production, although recently those agreements were restructured, allowing for a grace period with no capital amortization. From the expenditure side, PDVSA was increasingly responsible of carrying social expenditures and activities not related to the oil industry, which limited the resources for highly profitable investments. That is in addition to the increased fiscal take due to changes in the tax legislation. Also, higher investment requirements due to an increase in the equity share of PDVSA in joint venture projects, has had an impact on its cash flow.The explanations for the underperformance of the Venezuelan oil industry basically fall into two connected categories: the multiple problems facing PDVSA; and the increase in above-ground risks for foreign investors operating in the country. The deterioration of the institutional framework, led to radical fiscal and regulatory changes, and to the nationalization of the majority of the industry. In 7 addition, the substantial over-extraction of resources from the NOC, the significant macroeconomic distortions affecting the cost structure of oil companies, and the constraints imposed by the energy infrastructure and human capital availability; have combined to produce dismal results. The massive firing of the majority of the management and technical experts from PDVSA in 2003 following the political conflict that led to a strike, has left the company with limited capabilities to operate effectively.The recent decline in oil prices, and the changes in the international market structure, have exposed more dramatically the difficulties facing the Venezuelan oil sector, and call into question its ability to prevent a continuation of the declining trend in oil extraction. This situation becomes particularly severe if we take into account the cash flow constraints facing PDVSA, as well as its multiple operational problems, power cuts, and conflicts with oilfield services providers. These challenges are proportional to the enormous investments required to finance the projects in the Orinoco Oil Belt, where most of the reserves in Venezuela are located, and where the quality of the crude and the lack of development of the region, are just two of the many issues that need to be addressed.Since this paper is part of a wider project to understand the macroeconomic challenges facing the country in 2016-17, it focuses narrowly on the financial problems of the oil industry in the short-term and the operational challenges that could impede its recovery in the next couple of years. Within this context, it largely analyzes the upstream operations, i.e. oil extraction, rather than the downstream, given that in the former is where the oil rents are generated and constitutes the main source of foreign exchange and fiscal revenues of Venezuela. Other areas for further research are mentioned at the end of the document.2Official figures are used to the extent that they are publicly available. An important aspect that prevents an exhaustive evaluation of the oil sector in Venezuela is the lack of available information regarding key performance indicators affecting the cost structure of oil projects, the cash flow of PDVSA, and the fiscal contributions of the oil sector to the government, among other important variables. Thus, on occasion, estimations for variables of interest and explanations for their divergence from official figures are provided.The paper has two main sections. The first one analyzes the issues affecting the cash flow of PDVSA, the effects of macroeconomic and fiscal variables on both revenues and costs, as well as other financial issues affecting the performance of the company. The second section discusses some of the operational challenges facing the industry and mentions areas for further research.2For a more general overview of the recent developments of the oil sector in Venezuela see Monaldi (2015).},
	author = {Igor Hernandez and Francisco Monaldi}
}
@article {941411,
	title = {Towards a Prosperous and Productive Chiapas: Institutions, Policies, and Public-Private Dialog to Promote Inclusive Growth},
	year = {2016},
	abstract = {
	Since the Zapatista revolution of January 1994, enormous amount of resources coming from the federal government have poured over Chiapas. The gap in years and quality of education has been reduced significantly; and road, port and airport infrastructure have undergone a dramatic transformation. And yet, the income gap between Chiapas and the rest of Mexico has only widened. To understand why, a multi-disciplinary team of twelve experts have devoted significant time and resources to study different aspects of the development dynamic of Chiapas. As a result, 5 base documents have been published analyzing Chiapas:



	- Complexity profile- Growth Diagnostic- Institutional Diagnostic- Poverty profile- Pilot of productive dialogs and inclusive growth in an indigenous community



	This report resumes the findings from these and articulates their corresponding recommendations into a policy plan.



	According to our hypothesis, Chiapas is wedged in a low productivity trap. A modern production system, responsible for productivity increases, income and development elsewhere in the world, requires a number of complementary inputs or capacities that are absent in Chiapas. As a result, its economy consists of a few primary products of little or no technological sophistication, and a vibrant service industry fueled by public expenditure in its larger cities. In this situation, there are no incentives to acquire additional education or skills because there is no demand for them in the economy. As we have proved, the few that manage to emigrate earn salaries elsewhere in Mexico slightly above other migrants with similar qualifications. As it turns out, it is not about the Chiapanecos, it is about Chiapas.



	To overcome the current dilemmas and spark the engine of growth, Chiapas needs to resolve its issues of coordination, connectivity and gradually promote economic activities of higher complexity. Yazaki, one of the few manufacturers present in Chiapas, is an example of the role of the state in helping the economy to overcome the chicken-and-egg dilemmas, providing the public goods required - in an initial push {\textendash} by a more complex economy. Our recommendations are based in identifying the productive capabilities embedded within the current productive structure of Chiapas four largest urban agglomerations, and leveraging on them to board on different potential, more complex industries that use a similar base of knowledge. To conquer those industries and diversify its economy, Chiapas needs a public-private agency empowered to iteratively solve the issues and bottlenecks these potential industries face in each particular place. Public transport and housing policy can be used as means to incorporating the surrounding communities into the increasingly modern economies of urban centers. Special economic zones and agro-industrial parks can be used to spur productivity in those areas where labor and appropriability are the most binding constrains.

},
	author = {Hausmann, Ricardo and Cheston, Timothy and Miguel Angel Santos and Carlo Pietrobelli}
}
@article {929771,
	title = {Special Economic Zones in Panama: Technology Spillovers from a Labor Market Perspective},
	year = {2016},
	note = {
	Originally published October 2016. Revised May\&nbsp;2017.

},
	abstract = {
	Special Economic Zones (SEZ) have played an important role in Panama{\textquoteright}s successful growth story over the previous decade. SEZ have attracted local and foreign investment by leveraging a business-friendly environment of low transaction costs, and created many stable, well-paid jobs for Panamanians. Beyond that, SEZ shall be assessed as place-based policy by their capacity to boost structural transformations, namely attracting new skills and more complex know-how not to be found in the domestic economy.



	The aim of this paper is to evaluate the three largest SEZ in Panama:



	
		Colon Free Zone
	
	
		Panama-Pacific
	
	
		City of Knowledge
	



	Our results suggest that SEZ have been successful as measured by static indicators, such as foreign investment, job creation and productivity. We also find that SEZ have boosted inflows of high-skill immigrants, who are most likely generating positive knowledge spillovers on Panamanians productivity and wages. However, significant legal instruments and institutional designs are preventing Panama from taking full advantage of the skill variety hosted at the SEZ. Complex immigration processes inhibiting foreigners from transitioning out of the SEZ, a long list of restricted professions and even citizenships considered as a national security concern, are hindering the flow of knowledge, keeping the benefits coming from more complex multinational companies locked inside the gates of SEZ.

},
	author = {Hausmann, Ricardo and Juan Obach and Miguel Angel Santos}
}
@article {929046,
	title = {Panama beyond the Canal: Using Technological Proximities to Identify Opportunities for Productive Diversification},
	year = {2016},
	abstract = {
	The economy of Panama has thrived for more than a decade, based on a modern service sector on the activities surrounding the Canal. Panama has inserted its economy into global value chains, providing competitive services in logistics, ship handling, financial intermediation, insurance, communication and trade. The expansion of the modern service sector required significant non-residential construction, including office buildings, commercial outlets, warehouses, and even shopping malls. Large public infrastructure projects such as the expansion of the Canal, the Metro, and Tocumen airport, have provided an additional drive and paved the road for productive diversification. But productive diversification does not spread randomly. A country diversifies towards activities that demand similar capacities than the ones already in place. Current capabilities and know-how can be recombined and redeployed into new, adjacent activities, of higher value added.



	This report identifies productive capabilities already in place in Panama, as signaled by the variety and ubiquity of products and services that is already able to manufacture and provide competitively. Once there, we move on to identifying opportunities for productive diversification based on technological proximity. As a result, we provide a roadmap for potential diversification opportunities both at the national and sub-national level.

},
	author = {Hausmann, Ricardo and Jos{\'e} Ram{\'o}n Morales and Miguel Angel Santos}
}
@article {929066,
	title = {Shifting Gears: A Growth Diagnostic of Panama},
	year = {2016},
	note = {Originally published October 2016. Revised January 2017.},
	abstract = {Panama has been one of the fastest growing economies in the world over the previous decade. Growth has been spearheaded by the development of a modern service sector on the activities surrounding the Canal, and non-residential construction. Large public infrastructure projects and the private provision for infrastructure demanded by the service sector, have fueled growth and created a vibrant labor market for non-skilled workers.Two warning signals hover over Panama{\textasciiacute}s stellar performance. The construction sector has been growing for a decade at a rate that is equivalent to doubling its stock of structures every four years. The demand for non-residential construction cannot grow indefinitely at a higher rate than the rest of the economy. This feeds into the second signal: Income inequality. In spite of the minor improvements registered over the accelerated-growth spell, Panama remains amongst the world{\textasciiacute}s top five most unequal countries.Both warning signals point out to the need of further diversifying the Panamanian economy, and promoting economic activity in the provinces so as to deconcentrate growth and make it more inclusive.We deployed our Growth Diagnostic methodology in order to identify potential binding constraints to that process. Skilled labor, necessary to gradually diversify into more complex and high value-added activities, is relatively scarce. This scarcity manifests into large wage-premiums to foreigners across all occupations, which are particular large within more complex industries.Major investments in education have improved indicators of schooling quantitatively, but quality remains a major concern. We find that Panama{\textquoteright}s immigration policies are preventing skills from spilling over from their special economic zones into the rest of the economy. On top of that, the list of professions restricted to Panamanians and other constraints on skilled labor flows, are constraining even further the pool of skills. As we document here, these efforts are not helping the Panamanian workers, quite the contrary.We also find that corruption, and to a lesser extent, red tape, are other important factors that shall be addressed in order to allow Panama to shift the gears of growth, tackle inequality and continue growing at a fast pace.},
	author = {Hausmann, Ricardo and Espinoza, Luis and Miguel Angel Santos}
}
@report {927941,
	title = {Microeconomic binding constraints on private investment and growth in Venezuela},
	year = {2016},
	abstract = {Venezuela{\textquoteright}s business environment is systematically evaluated as one of the worst in the world. Producing and investing in the country imposes costs and risks arising from macroeconomic instability. Beyond the problems of inflation, fiscal deficit and trade balance; firms and entrepreneurs also face enormous difficulties and discouragement going from the uncertainty about property rights to lack of electricity. To identify binding microeconomic constraints for investment in Venezuela, we reviewed international rankings and experiences about key elements of the business environment and conducted interviews with members of guilds and managers at large companies in the country. We find that the most biding constraints to investment are within the functioning of institutions, including weak property rights, and arbitrary, unbalanced and unpredictable enforcement of the law. Also binding is the flawed functioning of markets, including access to inputs and price controls.},
	author = {Richard Obuchi and B{\'a}rbara Lira and Daniel Ragu{\'a}},
	editor = {Alfredo Guerra}
}
@article {924641,
	title = {Agglomeration Economies: The Heterogeneous Contribution of Human Capital and Value Chains},
	year = {2016},
	abstract = {**Updated version of this paper published here**We document the heterogeneity across sectors in the impact labor and input-output links\&nbsp;have on industry agglomeration. Exploiting the available degrees of freedom in coagglomeration\&nbsp;patterns, we estimate the industry-specic benefits of sharing labor needs and supply links with\&nbsp;local firms. On aggregate, coagglomeration patterns of services are at least as strongly driven by\&nbsp;input-output linkages as those of manufacturing, whereas labor linkages are much more potent\&nbsp;drivers of coagglomeration in services than in manufacturing. Moreover, the degree to which labor\&nbsp;and input-output linkages are reflected in an industry{\textquoteright}s coagglomeration patterns is relevant for\&nbsp;predicting patterns of city-industry employment growth.},
	author = {Dario Diodato and Neffke, Frank and Neave O{\textquoteright}Clery}
}
@article {912011,
	title = {Poverty, coverage of the Missions and social protection needs for the economic reform of Venezuela},
	year = {2016},
	abstract = {
	Even before the oil price crisis began in 2014, progress in reducing poverty in Venezuela had ceased and official figures showed that. According to the INE, between 2008 and 2013, the percentage of the population living in poverty remained almost the same, going from 33.1\% to 34.2\%.



	Estas son las {\'u}ltimas cifras oficiales de pobreza de ingreso que disponemos ya que la {\'u}ltima contabilizaci{\'o}n oficial de porcentaje de poblaci{\'o}n en situaci{\'o}n de pobreza es la del segundo semestre de 2013[1]. A partir de ese momento la descripci{\'o}n social de la pobreza en Venezuela ha dependido de estudios independientes realizados entre otros, por un consorcio de varias universidades del pa{\'\i}s[2] que dan cuenta de la evoluci{\'o}n de la pobreza entre 2014 y 2015 (ENCOVI, 2014 y 2015), a{\~n}os donde se precipitaron los precios del petr{\'o}leo hasta un tercio de lo que llegaron a ser durante 2008 acelerando un proceso de deterioro en los indicadores de desempe{\~n}o econ{\'o}mico y bienestar del hogar.



	Seg{\'u}n estas fuentes independientes de informaci{\'o}n la pobreza de ingresos en Venezuela habr{\'\i}a llegado hasta un 55\% en 2014 y 76\% en 2015. Cifras que por s{\'\i} solas hablan de la necesidad dise{\~n}ar un plan de reformas econ{\'o}micas y sociales para hacerle frente al impacto social de la ca{\'\i}da de los precios del petr{\'o}leo, as{\'\i} como al conjunto de factores, m{\'a}s all{\'a} de los precios del crudo, que han llevado al pa{\'\i}s a tres a{\~n}os continuos de recesi{\'o}n y aumento de la pobreza.



	En atenci{\'o}n a lo anterior, el presente trabajo se enmarca dentro del conjunto de ejercicios de investigaci{\'o}n que son necesarios para poder dise{\~n}ar un programa de estabilizaci{\'o}n econ{\'o}mica y su correspondiente plan de protecci{\'o}n social. En ese sentido, en lo que sigue trataremos de dimensionar el n{\'u}mero de familias que necesitar{\'\i}an formar parte de este potencial plan de protecci{\'o}n social.



	Para ello nos valdremos como fuente de informaci{\'o}n de la ENCOVI 2014 y 2015, encuestas desde las cuales no s{\'o}lo tenemos informaci{\'o}n para contabilizar los hogares e individuos en estado de necesidad, sino adem{\'a}s las coberturas probables de los programas sociales (Misiones) que actualmente implementa el gobierno de Venezuela, para de esta forma estimar; en primer lugar, las familias en situaci{\'o}n de pobreza que reciben beneficios sociales; en segundo lugar las que estando en esa condici{\'o}n de pobreza no los reciben y; por {\'u}ltimo, y con miras a la reforma de los programas y la introducci{\'o}n de elementos de progresividad distributiva, los beneficiarios que a{\'u}n sin ser poblaci{\'o}n objetivo, por no estar en situaci{\'o}n de pobreza, son receptores de transferencias, pensiones o becas por parte del Estado.



	Adicionalmente a lo anterior, las pol{\'\i}ticas de control de cambio y la regulaci{\'o}n de los precios, aunado a los problemas de abastecimiento, han hecho que los precios de los bienes a los que tienen acceso los distintos grupos sociales var{\'\i}an seg{\'u}n si se adquieren en los mercados controlados o en los informales. Estos diferenciales de precios son muy importantes y est{\'a}n generando impactos distributivos dif{\'\i}ciles de estimar, pero fundamentales para entender las necesidades de protecci{\'o}n social que requieren los hogares para cubrir la canasta de productos b{\'a}sicos.



	Es por ello que este trabajo tambi{\'e}n se propone describir a muy alto nivel los problemas distributivos generados por los diferenciales de precios. Si bien probablemente no sea posible llegar a conclusiones definitivas, al menos plantearemos lo relevante del tema para entender como la escasez de productos y las regulaciones de precios han introducido un conjunto de distorsiones en los precios y en el acceso a los bienes esenciales y presentaremos algunos de los dilemas y preguntas que estas distorsiones generan al momento de analizar la capacidad de satisfacer necesidades b{\'a}sicas en Venezuela.



	
		[1] En Agosto de 2016, el Instituto Nacional de Estad{\'\i}stica (INE) public{\'o} estad{\'\i}sticas sobre el porcentaje de hogares en situaci{\'o}n de pobreza por primera vez desde el a{\~n}o 2013. La serie fue actualizada para incluir los datos de 2014 y el primer semestre de 2015. Para el primer semestre de 2014 la cifra de hogares en situaci{\'o}n de pobreza por ingreso alcanz{\'o} 29,5\%, para el segundo semestre de ese a{\~n}o lleg{\'o} a 32,6\% y finalmente para el primer semestre de 2015 33,1\% de los hogares se encontraban en situaci{\'o}n de pobreza por ingresos. Sin embargo, el INE no ha hecho p{\'u}blicas ni el valor de Canasta Alimentaria Normativa para 2015, ni las Encuestas de Hogares que sustentan este c{\'a}lculo ni las cifras de pobreza por ingreso como porcentaje de la poblaci{\'o}n.
	

	
		
			[2] We refer to the National Survey of Living Conditions (ENCOVI) conducted in 2014 and 2015 by the Andr{\'e}s Bello Catholic University, the Sim{\'o}n Bol{\'\i}var University and the Central de Venezuela. The results and report of the 2014 survey can be seen in: Zu{\~n}iga, Genny and Gonz{\'a}lez, Marino. A look at the social situation of the Venezuelan population. National Survey of Living Conditions. 2014 . IIES-UCAB. Caracas. 2015, The report of the 2015 survey is being prepared but the database is available at the Institute of Economic and Social Research of the UCAB.
		
	

},
	author = {Luis Pedro Espa{\~n}a and Jos{\'e} Ram{\'o}n Morales and Douglas Barrios}
}
@article {889516,
	title = {Governance and the Challenge of Development Through Sports: A Framework for Action},
	year = {2016},
	abstract = {
	Previous papers such as\&nbsp;Russell, Barrios \&amp; Andrews (2016),\&nbsp;Guerra (2016), and\&nbsp;Russell, Tokman, Barrios \&amp; Andrews (2016) have aimed to provide an empirical view into the sports economy. This proves to be a difficult task, given the many definitions of {\textquoteleft}sports{\textquoteright} and data deficiencies and differences in the sports domain (between contexts and over time). The emerging view in these previous papers provides interesting information about the sports sector, however: it shows, for instance, that different contexts have differently intensive sports sectors, and that sports activities overlap with other parts of the economy. This kind of information is useful for policymakers in governments trying to promote sports activities and use sports to advance the cause of broad-based social and economic development.



	This paper is written with these policymakers in mind. It intends to offer a guide such agents can use in constructing sports policies focused on achieving development goals (what we call development through sports[1]), and discusses ways in which these policymakers can employ empirical evidence to inform such policies.\&nbsp;\&nbsp;



	The paper draws on the concept of {\textquoteleft}governance{\textquoteright} to structure its discussion. Taking a principal-agent approach to the topic, governance is used here to refer to the exercise of authority, by one set of agents, on behalf of another set of agents, to achieve specific objectives. Building on such a definition, the paper looks at the way governmental bodies engage in sports when acting to further the interests of citizens, most notably using political and executive authority to promote social and economic development. This focus on governance for development through sports (asking why and how governments use authority to promote sports for broader social and economic development objectives[2]) is different from governance of sports (which focuses on how governments and other bodies exercise authority to control and manage sports activities themselves), which others explore in detail but we will not discuss.[3]



	The paper has five main sections. A first section defines what we mean by {\textquoteleft}governance{\textquoteright} in the context of this study. It describes an ends-means approach to the topic{\textemdash}where we emphasize understanding the goals of governance policy (or governance ends) and then thinking about the ways governments try to achieve such goals (the governance means). The discussion concludes by asking what the governance ends and means are in a development through sports agenda. The question is expanded to ask whether one can use empirical evidence to reflect on such ends and means.\&nbsp; One sees this, for instance, in the use of {\textquoteleft}governance indicators{\textquoteright} and {\textquoteleft}governance dashboards{\textquoteright} in the international development domain. A second section details the research method we used to address these questions. This mixed method approach started by building case studies of sports policy interventions in various national and sub-national governments to obtain a perspective on what these policies tend to involve (across space and time). It then expanded into an analysis of sports policies in a broad set of national and sub-national governments to identify common development through sport ends and means.\&nbsp; Finally, it involved experimentation with selected data sources to show how the ends and means might be presented in indicators and dashboards{\textemdash}to offer evidence-based windows into development through sports policy regimes.



	Based on this research, sections three and four discuss the governance ends and means commonly pursued and employed by governments in this kind of policy process. The sections identify three common ends (or goals){\textemdash}inclusion, economic growth, and health{\textemdash}and a host of common means{\textemdash}like the provision of sports facilities, organized activities, training support, financial incentives, and more{\textemdash}used in fostering a development through sports agenda. Data are used from local authorities in England to show the difficulties of building indicators reflecting such policy agendas, but also to illustrate the potential value of evidence-based dashboards of these policy regimes. It needs to be stated that this work is more descriptive than analytical, showing how data can be used to provide an evidence-based perspective on this domain rather than formally testing hypotheses about the relationship between specific policy means and ends. In this regard, the work is more indicative of potential applications rather than prescriptive. A conclusion summarizes the discussion and presents a model for a potential dashboard of governance in a development through sports policy agenda.



	\&nbsp;
	
		
			[1] This terminology comes from Houlihan and White, who identify the {\textquotedblleft}tension between development through sport (with the emphasis on social objectives and sport as a tool for human development) and development of sport (where sport was valued for its own sake){\textquotedblright} (Houlihan \&amp; White 2002, 4).
		
	

	
		
			[2] The paper relates to a vibrant literature on this topic, which investigates the reasons and ways governments support the sports sector (classic and recent studies in this literature include Adams and Harris (2014), Gerretsenand Rosentraub (2015), Grix and Carmichael (2012), Grix (2015), Hallman and Petry (2013), Houlihan (2002, 2005, 2016), Houlihan and White (2002), Hylton (2013), Koski and L{\"a}ms{\"a} (2015), Schulenkorf and Adair (2013), and Vuori et al. (1995).
		
	

	
		
			[3] Work on the governance of sports assesses the way international entities like FIFA and the IOC work with national and local governmental bodies to oversee, regulate, and otherwise manage sports like football and the Olympic movement, using authority to create and implement rules on behalf of those involved in the sport itself. See, for instance Forster (2006), Geeraert (2013), and Misener (2014).
		
	

},
	author = {Matt Andrews and Stuart Russell and Douglas Barrios}
}
@article {889686,
	title = {More Goals, More Growth? A Take on the Mexican Sports Economy through the Economic Complexity Framework},
	year = {2016},
	abstract = {
	In order to appropriately understand the sports sector, its magnitude, embeddedness in the economy, and strategic value, it is necessary to develop a framework through which to study it. Having a standardized and comprehensive methodology to analyze the sports sector will allow policymakers, academics, and other stakeholders to look at the sports sector at a new level of detail and rigor.Previous work has outlined the numerous data quality and aggregation challenges currently present in the sports economy literature (Russell, Barrios \&amp; Andrews 2016). In light of these challenges, this paper attempts to build on the suggested categorization of the sports industry and develop a sound strategy to analyze the sector through an empirical exercise in a specific context: the Mexican Economy.To this end, we first attempt to understand how connected the sports sector is to other activities in the economy and identify which sectors share similar know-how with m1. Additionally, we attempt to determine the relative magnitude of the sports sector through variables such as value added and employment.Similarly, we consider study the spatial considerations around sports related economic activities at a subnational level. The advancement of spatial economics has allowed us to understand a new dimension of how an economic sector can develop and how characteristics inherent to a given geography can play a role in determining why some activities end up appearing and developing in the places they do.Lastly, some descriptive and regression analysis efforts in this paper enabled us to better understand and characterize the sports sector. Such exercises allow us to learn what type of workers typically comprises the sports sector, and whether such profile is different across the different categories of sports activities. Among the variables analyzed I the descriptive exercise, we can look at education level and wages{\textendash}among others{\textendash}of those who work on this sector, and compare them to the overall employed population.This paper is structured as follows: Section 1 will make the case for how publicly available data in Mexico meets the level of detail required for this type of study. Section 2 will look at the way in which the sports sector is nested in the overall economy. Section 3 studies the magnitude of the sports sector through different metrics. Section 4 looks at the type of jobs that comprise the sports sector. Section 5 looks at the differences in intensity of sports activities and early work on its potential causal roots. Section 6 provides some conclusions.\&nbsp;

},
	author = {Alfredo Guerra}
}
@article {881471,
	title = {Keeping One{\textquoteright}s Eye on the Ball: Exploring the Intensity of Sports Activities across Europe},
	year = {2016},
	abstract = {
	As described in Russell, Barrios \&amp; Andrews (2016), past attempts to understand the sports economy have been constrained by a number of data limitations. For instance, many of these accounts use revenues when value added measures would be more appropriate. Similarly, many accounts use top-down definitions that result in double counting and an inflated estimate of the size of the sports economy. More importantly, past accounts have focused most of their efforts estimating the overarching size of the sports economy. Constrained by aggregated data that groups a wide range of sports-related economic activities together, they primarily discuss the size of the sports-related economic activity. Their focus on answering the question of "How big?" conceals substantial differences between activities. Core sports activities, such as professional sports teams, behave very differently than activities, like sporting goods manufacturing that are closer to the periphery of the sports economy. Likewise, there are even important differences amongst core sports activities. Professional sports teams are very different than fitness facilities, and they might differ in different respects.



	Guerra (2016) demonstrates that, when detailed, disaggregated data are available, the possibilities to analyze and understand the sports are greatly increased. For instance, Guerra (2016) \&nbsp;were able to conduct skills-based analyses, magnitude analyses, employment characterizations, geographic distribution analyses, and calculations of the intensity of sports activities. The sector disaggregation, spatial disaggregation, and database complementarity present in the Mexico data used in that paper therefore enables a more detailed and nuanced understanding of sports and sports-related economic activity.



	Data with characteristics similar to those found in Mexico are few and far between. We have, unfortunately, been unable to completely escape such data limitations. However, we have compiled and analyzed a large array of employment data on sports-related economic activities in Europe. In the paper that follows, we describe our analyses of these data and the findings produced.



	Section 1 begins with a discussion of employment in sports and an explanation of why we chose this variable for our analyses. Section 2 provides an overview of the data used in this paper particularly focusing on the differences between it and the Mexico data discussed in Guerra (2016). It also describes the methodology we use. We analyze these data using one of two related measures to understand the intensity of sports-related activities across different geographic areas in countries. We also construct measures at the level of a single country in order to compare across entire economies. At the international level, we adopt the revealed comparative advantage (RCA) measure that Balassa (1965) first developed to analyze international trade. Within specific countries, however, we use a population-adjusted version of the RCA measure known as RPOP. Section 3 presents the most relevant findings and Section 4 discusses their limitations. Section 5 concludes with the lessons learned and avenues for future research. While there are limitations on these analyses, they can give policymakers a better understanding of the distribution and concentration of sports across space. Such information can serve as an important input for sports-related investment decisions and other sports-related policies.

},
	author = {Stuart Russell and Carla Tokman and Douglas Barrios and Matt Andrews}
}
@article {871811,
	title = {Bringing Home the Gold? A Review of the Economic Impact of Hosting Mega-Events},
	year = {2016},
	month = {2016},
	abstract = {There is perhaps no larger sports policy decision than the decision to host or bid to host a mega-event like the FIFA World Cup or the Summer Olympics. Hosts and bidders usually justify their decisions by touting their potential impact. Many organizers and promoters either fund or widely disseminate ex-ante studies that tend to highlight the positive effects of the event. For instance, the consultancy firm Ernst \&amp; Young produced a 2010 report prior to the 2014 World Cup in Brazil that painted an optimistic picture of the event{\textquoteright}s potential legacy. It estimated that an additional R$ 142.39 billion (4.91\% of 2010 GDP) would flow through the Brazilian economy over the 2010-2014 period, generating 3.63 million jobs per year, R$ 63.48 billion (2.17\% of 2010 GDP) of income for the population and additional tax collection of R$ 18.13 billion (0.62\% of 2010 GDP) for the local, state and federal governments. Ernst \&amp; Young estimated that during the same period 2.98 million additional visitors would travel to Brazil, increasing the international tourist inflow up to 79\%.Such results, if true, would clearly attractive for governments considering a bid, but these expected impacts don{\textquoteright}t always materialize. Moreover, hosting mega-events requires significant investments - and the cost of these investments is rising. Zimbalist notes emerging economies like China, Brazil, and South Africa have increasingly perceived "mega-events as a sort of coming-out party signaling that [they are] now a modernized economy, ready to make [their] presence felt in world trade and politics" (Zimbalist 2015). Their intentions may be noble, but the intention of using mega-events as a "coming-out party" means developing countries hoping to host them need to make massive investments. They are confronted by significant obstacles in that they lack sufficient stadiums, accommodations, transportation systems, and other sports-related infrastructure. As a result, each of the mega-events hosted by emerging economies has been exorbitantly expensive. The 2014 World Cup cost Brazil between USD 15 billion and USD 20 billion, while Beijing reportedly spent USD 40 billion prior to the 2008 Summer Olympic (Zimbalist 2015). Additionally, as the debt-ridden 1976 Summer Olympics in Montreal demonstrates, expensive mega-events are not limited to emerging economies alone. Flyvbjerg and Stewart have even shown that every Olympics since 1960 has gone over budget (Flyvbjerg and Stewart 2012).Such incredible figures, in terms of both costs and benefits, beget the question: are mega-events worth it? Which type of reports should governments focus their attention on? What economic consequences should a government reasonably expect? With such high stakes, policymakers need to choose wisely. We attempt to answer these questions and aid the decisions of policymakers by providing a concise review of the rich academic literature on mega-events. For the purposes of this paper, we mainly focus on the Summer Olympic Games and the FIFA World Cup as mega-events. However, we also leverage information regarding events like the Winter Olympic Games, the UEFA football championships, and the Commonwealth Games. These events are organized on a smaller scale than the previous two, but they might provide some insights on how to best understand mega-events. We focus on claims surrounding the direct or indirect mechanisms that facilitate the impact that ex-ante studies predict. We provide a review of these claims and their validity according to the existing literature.Section 1 focuses on the argument that mega-events lead to increased economic activity in the host economy. Specifically, we evaluate whether or not mega-events leads to access to previously inaccessible funds and increased investments. These investments could theoretically come from supranational organizations, private stakeholders, or public stakeholders. We also consider whether or not these new expenditures and investments have the multiplicative effect that many ex-ante studies assume they have. We finally investigate if the economic activity surrounding mega-events leads to increased revenues and tax collection for host governments. Overall, the existing academic literature suggests that any increased economic activity resulting from the event is routinely dwarfed by additional public budgetary commitments. Moreover, the arguments regarding multiplicative effects and increased revenues also tend to be exaggerated.Section 2 shifts the focus to the potential impact of mega-events on a specific industry: tourism. We explore the effect of mega-events on the number of tourists visiting the host region and their spending habits. We explore this channel both for analyses specific to a single mega-event and for cross-country evaluations incorporating many events. Next, we consider the impact of a mega-event on a region{\textquoteright}s brand and image in the international community with the idea of testing if hosting the competition will impact future tourism. Finally, we consider if mega-events lead to increases in the capacity of a city or country to welcome future tourists as a result of improved airport infrastructure, accommodations, and/or transportation systems. As was true in Section 1, the academic literature suggests that the claims of many ex-ante studies are misleading. Our review finds that there is some evidence for increases in tourist arrivals to certain events, but those increases are far smaller than what is generally predicted beforehand. These effects are also usually dependent on factors, such as the timing of the competition, that are specific to the host region and the event itself.Section 3 briefly discusses other potential qualitative and social impacts of mega-events such as international business relations, crime reduction, and the "feel-good effect." In the penultimate section, Section 4, we discuss how these conclusions should impact the decision-making of policymakers. Finally, in a short conclusion, we summarize the findings of our review.},
	author = {Douglas Barrios and Stuart Russell and Matt Andrews}
}
@article {871866,
	title = {Getting the Ball Rolling: Basis for Assessing the Sports Economy},
	year = {2016},
	month = {2016},
	abstract = {
	Data on the sports economy is often difficult to interpret, far from transparent, or simply unavailable. Data fraught with weaknesses causes observers of the sports economy to account for the sector differently, rendering their analyses difficult to compare or causing them to simply disagree. Such disagreement means that claims regarding the economic spillovers of the industry can be easily manipulated or exaggerated. Thoroughly accounting for the industry is therefore an important initial step in assessing the economic importance of sports-related activities. For instance, what do policymakers mean when they discuss sports-related economic activities? What activities are considered part of the "sports economy?" What are the difficulties associated with accounting for these activities? Answering these basic questions allows governments to improve their policies.



	The paper below assesses existing attempts to understand the sports economy and proposes a more nuanced way to consider the industry. Section 1 provides a brief overview of existing accounts of the sports economy. We first differentiate between three types of assessments: market research accounts conducted by consulting groups, academic accounts written by scholars, and structural accounts initiated primarily by national statistical agencies. We then discuss the European Union{\textquoteright}s (EU) recent work to better account for and understand the sports economy. Section 2 describes the challenges constraining existing accounts of the sports economy. We describe two major constraints - measurement challenges and definition challenges - and highlight how the EU{\textquoteright}s work has attempted to address them. We conclude that, although the Vilnius Definition improves upon previous accounts, it still features areas for improvement.



	Section 3 therefore proposes a paradigm shift with respect to how we understand the sports economy. Instead of primarily inquiring about the size of the sports economy, the approach recognizes the diversity of sports-related economic activities and of relevant dimensions of analysis. It therefore warns against attempts at aggregation before there are better data and more widely agreed upon definitions of the sports economy. It asks the following questions: How different are sports-related sectors? Are fitness facilities, for instance, comparable to professional sports clubs in terms of their production scheme and type of employment? Should they be understood together or treated separately? We briefly explore difference in sports-related industry classifications using data from the Netherlands, Mexico, and the United States. Finally, in a short conclusion, we discuss how these differences could be more fully explored in the future, especially if improvements are made with respect to data disaggregation and standardization.

},
	author = {Stuart Russell and Douglas Barrios and Matt Andrews}
}
@article {812551,
	title = {Inter-industry Labor Flows},
	year = {2016},
	month = {2016},
	abstract = {Labor flows across industries reallocate resources and diffuse knowledge among economic activities. However, surprisingly little is known about the structure of such inter-industry flows. How freely do workers switch jobs among industries? Between which pairs of industries do we observe such switches? Do different types of workers have different transition matrices? Do these matrices change over time?Using German social security data, we generate stylized facts about inter-industry labor mobility and explore its consequences. We find that workers switch industries along tight paths that link industries in a sparse network. This labor-flow network is relatively stable over time, similar for workers in different occupations and wage categories and independent of whether workers move locally or over larger distances. When using these networks to construct inter-industry relatedness measures they prove better predictors of local industry growth rates than co-location or input-based alternatives. However, because industries that exchange much labor typically do not have correlated growth paths, the sparseness of the labor-flow network does not necessarily prevent a smooth reallocation of workers from shrinking to growing industries. To facilitate future research, the inter-industry relatedness matrices we develop are made available as an online appendix to this paper.},
	author = {Neffke, Frank and Anne Otto and Antje Weyh}
}
@article {812526,
	title = {The Mobility of Displaced Workers: How the Local Industry Mix Affects Job Search Strategies},
	year = {2016},
	month = {2016},
	abstract = {Establishment closures leave many workers unemployed. Based on employment histories of 20 million German workers, we find that workers often cope with their displacement by moving to different regions and industries. However, which of these coping strategies is chosen depends on the local industry mix. A large local presence of predisplacement or related industries strongly reduces the rate at which workers leave the region. Moreover, our findings suggest that a large local presence of the predisplacement industry induces workers to shift search efforts toward this industry, reducing the spatial scope of search for jobs in alternative industries and vice versa.},
	author = {Neffke, Frank and Anne Otto and Cesar Hidalgo}
}
@article {760836,
	title = {What Bangs for Your Bucks? Assessing the Design and Impact of Transformative Policy},
	year = {2016},
	abstract = {After an era of generic support for economic development and innovation, narrowly targeted transformation policy is back on the table. Recent advances in the fields of new industrial policy and transition thinking converge on the idea that achieving structural change requires governments to take an active role in overcoming inertia. Rather than just leveraging R\&amp;D investments and setting framework conditions, policy makers are urged to participate in the development of socio-economic systems around particular technologies. Associated policy support typically involves a diverse portfolio of system-specific interventions.
The emergence of transformative policy, in this paper characterized by being selective, process-oriented and multi-instrumental, poses severe challenges to rising standards of public accountability. Evaluation methods for calculating the {\textquoteleft}bang for the buck{\textquoteright} of R\&amp;D-leveraging measures are ill-suited when policy mixes are supposed to enact economic transformation. We argue that, in order to see if aptly chosen policy design is bringing about actual change, assessments should gauge policy contributions to building up technological innovation systems (TIS). The TIS-literature provides a concrete but untapped basis for tracking how policy efforts affect conditions favoring the creation and diffusion of new economic activities. This premise leads us to introduce a scheme for structuring analyses concerned with (the links between) the organization, orientation and aggregate impact of transformative policy. We test it in a tentative assessment of the Dutch {\textquoteleft}Topsector approach{\textquoteright}.Besides facilitating continuous policy learning, our assessment scheme also serves to strengthen policy maker{\textquoteright}s ability to legitimize the adoption of heterodox economic approaches.},
	author = {Matthijs Janssen}
}
@report {745441,
	title = {Increasing Exports of Albanian Cultivated Fish to the EU},
	year = {2016},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	This document explores Albanian aquaculture in the context of European aquaculture and compares it to neighboring countries, especially Greece. Using information from fieldwork, multiple reports by the United Nations{\textquoteright} Food and Agriculture Organization (FAO), and interviews with experts in government and non-government institutions, we analyze the production of European seabass and Gilthead seabream in Europe in general and in Albania in particular. Albanian cultivation of seabass and seabream has increased sevenfold since production started in the early 2000{\textquoteright}s, but it represented only 0.38\% of European aquaculture of these two species in 2013. Albania has significantly lower productivity than its neighbors, especially Greece, the dominant actor in the market. The analysis indicates that Albania{\textquoteright}s lower productivity is caused by: (i) high costs of cages, fingerlings, and feed; which are all imported; (ii) lack of a formal fish market; and (iii) lack of clarity in the regulation. The document concludes by offering recommendations to get over these impediments for growth including reducing tariffs; encouraging national production of cages, fingerlings, and feed through investment in research; offering more and better financing options for cage acquisition; improving quality controls; establishing a national fish market; and passing the Aquaculture Law to bring clarity to the sector regulation.

},
	author = {Alejandra Jimenez}
}
@article {726751,
	title = {One More Resource Curse: Dutch Disease and Export Concentration},
	year = {2016},
	abstract = {
	Economists have long discussed the negative effect of Dutch disease episodes on the non-resource tradable sector as a whole, but little has been said on its impact on the composition of the non-resource export sector. This paper fills this gap by exploring to what extent concentration of a country{\textquoteright}s non-resource export basket is determined by their exports of natural resources. We present a theoretical framework that shows how upward pressure in wages caused by a resource windfall results in higher export concentration. We then document two robust empirical findings consistent with the theory. First, using data on discovery of oil and gas fields and of commodity prices as sources of exogenous variation, we find that countries with larger shares of natural resources in exports have more concentrated non-resource export baskets. Second, we find capital-intensive exports tend to dominate the export basket of countries prone to Dutch disease episodes.



	Listen to the podcast interview with the authors

},
	author = {Dany Bahar and Miguel Angel Santos}
}
@article {666031,
	title = {Towards a Prosperous and Productive Chiapas: Institutions, Policies and Public-Private Dialogue to Promote Inclusive Growth},
	year = {2016},
	abstract = {
	Since the Zapatista revolution of January 1994, Chiapas has received an enormous amount of resources from the federal government. The gaps in years of schooling between Chiapas and the rest of Mexico have been reduced, and numerous investments have been made that have improved road infrastructure, ports and airports. However, the gap that separates Chiapas from the rest of Mexico has been steadily widening. A multidisciplinary team of twelve experts has dedicated itself to studying different aspects of the productive, political and social dynamics of Chiapas. From there, five base documents have emerged: Institutional Diagnosis, Economic Complexity, Growth Diagnosis, Poverty Profile and a pilot of productive dialogue carried out in an indigenous community in Chiapas.



	Our hypothesis is that Chiapas is in a low productivity trap. Modern production methods, closely linked to the growth and development process, require a set of complementary inputs that are absent in most of the territory of Chiapas. Thus, there are no incentives to acquire new knowledge that could be used in industries that do not exist. This inability to solve coordination problems and provide the inputs required by modern production has caused a good part of the social investment that has been poured into the entity to be wasted.



	To overcome the current dilemma and ignite the spark of growth, Chiapas needs to solve its problems of coordination, connectivity, and gradually promote greater complexity. Our recommendations are based on taking advantage of the agglomerations of knowledge that already exist in the main urban centers of Chiapas, to address new productive sectors with greater added value and complexity. To overcome this challenge, it is necessary to create a public-private structure that iteratively solves the problems of coordination and provision of public goods that these high-potential sectors require. Public transport systems and housing policy are mechanisms to integrate the population surrounding urban centers to the new productive dynamics.

},
	author = {Hausmann, Ricardo and Cheston, Timothy and Miguel Angel Santos and Carlo Pietrobelli}
}
@article {661901,
	title = {Bounding the Price Equivalent of Migration Barriers},
	year = {2016},
	abstract = {Large international differences in the price of labor can be sustained by differences between workers, or by natural and policy barriers to worker mobility. We use migrant selection theory and evidence to place lower bounds on the ad valorem equivalent of labor mobility barriers to the United States, with unique nationally-representative microdata on both U.S. immigrant workers and workers in their 42 home countries. The average price equivalent of migration barriers in this setting, for low-skill males, is greater than $13,700 per worker per year. Natural and policy barriers may each create annual global losses of trillions of dollars.},
	author = {Michael Clemens and Claudio Montenegro and Lant Pritchett}
}
@article {652656,
	title = {The New Economic Case for Migration Restrictions: An Assessment},
	year = {2016},
	abstract = {For decades, migration economics has stressed the effects of migration restrictions on income distribution in the host country. Recently the literature has taken a new direction by estimating the costs of migration restrictions to global economic efficiency. In contrast, a new strand of research posits that migration restrictions could be not only desirably redistributive, but in fact globally efficient. This is the new economic case for migration restrictions. The case rests on the possibility that without tight restrictions on migration, migrants from poor countries could transmit low productivity ({\textquotedblleft}A{\textquotedblright} or Total Factor Productivity) to rich countries{\textemdash}offsetting efficiency gains from the spatial reallocation of labor from low to high-productivity places. We provide a novel assessment, proposing a simple model of dynamically efficient migration under productivity transmission and calibrating it with new macro and micro data. In this model, the case for efficiency-enhancing migration barriers rests on three parameters: transmission, the degree to which origin-country total factor productivity is embodied in migrants; assimilation, the degree to which migrants{\textquoteright} productivity determinants become like natives{\textquoteright} over time in the host country; and congestion, the degree to which transmission and assimilation change at higher migrant stocks. On current evidence about the magnitudes of these parameters, dynamically efficient policy would not imply open borders but would imply relaxations on current restrictions. That is, the new efficiency case for some migration restrictions is empirically a case against the stringency of current restrictions.},
	author = {Michael Clemens and Lant Pritchett}
}
@article {635906,
	title = {The Workforce of Pioneer Plants},
	year = {2016},
	abstract = {Is labor mobility important in technological diffusion? We address this question by asking how plants assemble their workforce if they are industry pioneers in a location. By definition, these plants cannot hire local workers with industry experience. Using German social-security data, we find that such plants recruit workers from related industries from more distant regions and local workers from less-related industries. We also show that pioneers leverage a low-cost advantage in unskilled labor to compete with plants that are located in areas where the industry is more prevalent. Finally, whereas research on German reunification has often focused on the effects of east-west migration, we show that the opposite migration facilitated the industrial diversification of eastern Germany by giving access to experienced workers from western Germany.},
	author = {Hausmann, Ricardo and Neffke, Frank}
}
@article {1479155,
	title = {Skill Mismatch and the Costs of Job Displacement},
	year = {2015},
	abstract = {When workers are displaced from their jobs in mass layoffs or firm closures, they experience lasting adverse labor market consequences. We study how these consequences vary with the amount of skill mismatch that workers experience when returning to the labor market. Using novel measures of skill redundancy and skill shortage, we analyze individuals{\textquoteright} work histories in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample in which we match displaced workers to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven fold, and that the type of skill mismatch after displacement is strongly associated with the magnitude of post-displacement earnings losses. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings.},
	author = {Neffke, Frank and Ljubica Nedelkoska and Simon Wiederhold}
}
@report {1314184,
	title = {The Albanian Community in the United States: Statistical Profiling of the Albanian-Americans},
	year = {2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	When the Albanian Communist regime fell in 1991-92, many Albanians saw their future outside the borders of Albania. At that time in history, no one anticipated the scale of migration that would take place in the subsequent two decades. Today, one third of Albania{\textquoteright}s 1991 population lives abroad. Most of these migrants live and work in neighboring Greece and Italy. The third most popular destination is however the United States. Besides this new wave of migrants, the US has an old Albanian diaspora{\textendash}the offspring of migrants who came to the US between the First and the Second World War. This is what mainly gives rise to the second generation Albanian-Americans.



	To the best of our knowledge, there is currently no systematic documentation of the socio-demographic and economic characteristics of the Albanian community in the US. To bridge this gap, we use data from the American Community Survey 2012 and analyze these characteristics. The profiling could be of interest for anyone who focuses on the Albanians abroad {\textendash} the Government{\textquoteright}s Programs dealing with diaspora and migration issues, researchers interested in migration questions, the Albanian Community Organizations in the US or the diaspora members themselves.



	We find that the first and the second generation Albanian-Americans have distinctive features. The first generation (those who arrived after the fall of Communism) is more educated than the non-Albanian Americans with comparable demographics. This is particularly true of Albanian women. The education of the second generation resembles more closely the US population with comparable demographic characteristics.



	Despite the qualification advantage, first generation Albanian-Americans earn much less than non-Albanian Americans with comparable socio-demographic characteristics. We find that this is not associated with being Albanian per se but with being an immigrant more generally. The migrant-native gap narrows down with time spent in the US.



	An important channel through which the current gap is maintained is qualification mismatch. We observe that first generation Albanian-Americans are over-represented in occupations requiring little skills and under-represented in occupations requiring medium and high skills, in direct contrast to them being more educated than non-Albanians.



	When it comes to the earnings of second generation Albanian-Americans, the situation is more nuanced. The low skilled Albanian-Americans earn significantly more, and the highly skilled Albanian-Americans earn significantly less than the non-Albanian Americans with comparable socio-demographic characteristics. We currently do not have a straightforward explanation for this pattern.



	The Albanian population in the US is highly concentrated in a few states: New York, Michigan and Massachusetts account for almost 60\% of all Albanian Americans. The community in Massachusetts is the best educated; best employed and has the highest earnings among the three, but is also the oldest one in terms of demographics.



	However, due to its sheer size (over 60,000 Albanian-Americans), New York is the host of most Albanians with BA degree (about 10,000). New York also hosts the largest number of high earning Albanians (about 1,800 earn at least $100,000 a year).

},
	author = {Ljubica Nedelkoska and Nick Khaw}
}
@report {1314149,
	title = {Albanian-American Diaspora Survey Report},
	year = {2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	This survey studies the ways in which active Albanian-Americans would like to engage in the development of their home countries. Its results will help us define the focus of the upcoming events organized under the Albanian Diaspora Program.



	Between March 6th and March 22nd 2015, 1,468 Albanian-Americans took part in the online survey, of which 869 completed the survey. The results presented in this report are based on the answers of the latter group. The results of this survey do not represent the opinions of the general Albanian-American community, but rather the opinions of those who are more likely to engage in an Albanian Diaspora Program.



	The survey was jointly prepared with the following Albanian-American organizations: Massachusetts Albanian American Society (MAAS/BESA), Albanian American Success Stories, Albanian Professionals in Washington D.C., Albanian Professionals and Entrepreneurs Network (APEN), Albanian-American Academy, Albanian American National Organization, and VATRA Washington D.C. Chapter. The survey was sponsored by the Open Society Foundations, as a part of the grant OR2013-10995 Economic Growth in Albania granted to the Center for International Development at Harvard University.

},
	author = {Ljubica Nedelkoska and Mark Kosmo}
}
@report {1314135,
	title = {Assessing the Medicinal and Aromatic Plants in Albania},
	year = {2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Harvard University{\textquoteright}s Center for International Development and the Government of Albania has been engaged in a two year growth strategy exercise starting in 2013 till 2015. Discussions with the Ministry of Agriculture yielded that there is a need for conducting value chain studies on a few important product groups with the following objective:



	
		Cultivate {\textquoteleft}value chain{\textquoteright} oriented thinking within the Ministry of Agriculture
	
	
		Identify key issues {\textquoteleft}within{\textquoteright} the particular product groups and {\textquoteleft}across{\textquoteright} different product groups that need to be tackled at the public policy level
	



	Here is a value chain study of the Medicinal \&amp; Aromatic Plants (MAPs), specifically of sage and lavender. The products have been chosen given its huge importance in the economy as the largest export commodity in agriculture and their contributions to a farmer{\textquoteright}s income. A special black-belt team comprising ministry officials will take forward the findings of this study and will iteratively make policy, ensuring better policies and implementation at the same time.

},
	author = {Paul, BV}
}
@report {1314133,
	title = {Conditions for Re-Opening Exports of Albanian Mussels to to the EU},
	year = {2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	The Centre for International Development (CID) at Harvard University has been leading a two year project with the Government of Albania to help identify and implement growth strategies by studying the constraints that bind specific sectors. In May this year, the Ministry of Agriculture tasked CID to look at the ban imposed by the European Union (EU) on the export of mussels from Albania. The research was sponsored by the Open Society Foundations, as a part of the grant OR2013-10995 Economic Growth in Albania granted to CID.



	During the research project, we studied the value chain of mussel production and certification in Albania, mapped the requirements laid down by EU legislation and identified shortfalls in compliance. This report presents our findings and recommendations.



	The Butrint lagoon is the main production center for mussels in Albania. By 1989, production from the lagoon had increased to 5,000 tons per year. It dropped dramatically in the 1990s due to an outbreak of cholera and the subsequent ban on the export of mussels by the EU. The ban has not been lifted since. Albania still cannot export mussels to the EU because these do not meet the required sanitary standards.



	Our research finds that lack of reliable and affordable purification facilities is at the root of the problem. Unless this constraint is alleviated, it will continue to frustrate efforts to ensure compliance with standards.

},
	author = {Rohit Kumar}
}
@book {1035647,
	title = {Economics Rules: The Rights and Wrongs of the Dismal Science},
	year = {2015},
	pages = {272},
	publisher = {W.W. Norton \& Company, Inc.},
	organization = {W.W. Norton \& Company, Inc.},
	abstract = {Rethinking economics, from the inside out.In the wake of the financial crisis and the Great Recession, economics seems anything but a science. In this sharp, masterfully argued book, Dani Rodrik, a leading critic from within, takes a close look at economics to examine when it falls short and when it works, to give a surprisingly upbeat account of the discipline.Drawing on the history of the field and his deep experience as a practitioner, Rodrik argues that economics can be a powerful tool that improves the world{\textemdash}but only when economists abandon universal theories and focus on getting the context right. Economics Rules argues that the discipline{\textquoteright}s much-derided mathematical models are its true strength. Models are the tools that make economics a science.Too often, however, economists mistake a model for the model that applies everywhere and at all times. In six chapters that trace his discipline from Adam Smith to present-day work on globalization, Rodrik shows how diverse situations call for different models. Each model tells a partial story about how the world works. These stories offer wide-ranging, and sometimes contradictory, lessons{\textemdash}just as children{\textquoteright}s fables offer diverse morals.Whether the question concerns the rise of global inequality, the consequences of free trade, or the value of deficit spending, Rodrik explains how using the right models can deliver valuable new insights about social reality and public policy. Beyond the science, economics requires the craft to apply suitable models to the context.The 2008 collapse of Lehman Brothers challenged many economists{\textquoteright} deepest assumptions about free markets. Rodrik reveals that economists{\textquoteright} model toolkit is much richer than these free-market models. With pragmatic model selection, economists can develop successful antipoverty programs in Mexico, growth strategies in Africa, and intelligent remedies for domestic inequality.At once a forceful critique and defense of the discipline, Economics Rules charts a path toward a more humble but more effective science.},
	url = {http://books.wwnorton.com/books/detail.aspx?ID=4294988425},
	author = {Rodrik, Dani}
}
@article {923556,
	title = {Why is Chiapas Poor?},
	year = {2015},
	abstract = {
	No matter which way you look at it, Chiapas is the most backward of any state in Mexico. Its per capita income is the lowest of the 32 federal entities, at barely 40\% of the national median (Figure 1). Its growth rate for the decade 2003-2013 was also the lowest (0.2\%),1 causing the income gap separating Chiapas from the national average to increase from 53\% to 60\%. That is to say that today the average income for a worker in Mexico is two and a half times greater than the average in Chiapas. The two next poorest states, Oaxaca and Guerrero, are 25\% and 30\% above Chiapas.2 According to the Instituto Nacional de Estad{\'\i}stica y Geograf{\'\i}a de M{\'e}xico (INEGI, National Institute of Statistics and Geography), Chiapas is also the state with the highest poverty rate (74.7\%) as well as extreme poverty (46.7\%).3



	These major differences in income levels among Mexican federal entities are reproduced as in a fractal within Chiapas. In fact, while the wealthiest entity (Mexico City) is wealthier than the poorest (Chiapas) by a factor of six, the difference within Chiapas between the wealthiest municipality (Tuxtla Guti{\'e}rrez) and the poorest (Aldama and Mitontic) is by a factor greater than eight.4 



	As there are different "Mexicos" within Mexico,5 in Chiapas there are also different sorts of Chiapas (Figure 2). Income per capita in Tuxtla Guti{\'e}rrez, to the right of the distribution, is five standard deviations above the state average. Next comes a series of intermediate cities, San Crist{\'o}bal de las Casas, Comit{\'a}n de Dom{\'\i}nguez, Tapachula, and Reforma, between two and a half to four standard deviations above the average. The remaining municipalities of Chiapas follow (122 in all), clustered to the far left of the distribution. In addition, both the statistics available at the town level and our visits to various municipalities in Chiapas seem to indicate that significant differences also exist within these municipalities.



	From this vantage point, questions as to why Chiapas is poor, or what explains its significant backwardness compared to other areas of Mexico, become much more complex. Why do some regions in Chiapas have high income levels, while other regions remain stagnant, fully dependent on federal transfers and deprived from the benefits of modern life?



	1 This is the non-oil gross domestic product growth rate reported by INEGI, considered to be more representative of the productive spectrum. In any case, the overall rate of growth in Chiapas (-0.2\%) was also the lowest amongst all Mexican entities for the decade.2 Refers to non-oil GDP; in general terms, Guerrero and Oaxaca are 19\% and 16\% above Chiapas.3 Growth figures refer to the decade 2003-2013, poverty figures are those published by INEGI for 2012.4 Comparisons of Chiapas municipalities are made based on the data from the 10\% sample of the 2010 Population Census, which is representative at the state level.5 This is a reference to the report, A tale of two Mexicos: Growth and prosperity in a two-speed economy, McKinsey Global Institute (2014). 

},
	author = {Levy, Dan and Hausmann, Ricardo and Miguel Angel Santos and Espinoza, Luis and Miguel Flores}
}
@article {676926,
	title = {The Right Fit for the Wrong Reasons: Real Business Cycle in an Oil-Dependent Economy},
	year = {2015},
	abstract = {
	Venezuela is an oil-dependent economy subject to large exogenous shocks, with a rigid labor market. These features go straight at the heart of two weaknesses of real business cycle (RBC) theory widely reported in the literature: Neither shocks are volatile enough nor real salaries are sufficiently flexible as required by the RBC framework to replicate the behavior of the economy. We calibrate a basic RBC model and compare a set of relevant statistics from RBC-simulated time series with actual data for Venezuela and the benchmark case of the United States (1950-2008). In spite of Venezuela being one of the most heavily intervened economies in the world, RBC-simulated series provide a surprisingly good fit when it comes to the non-oil sector of the economy, and in particular for labor markets. Large restrictions on dismissal and widespread minimum (nominal) wage put all the burden of adjustment on prices; which translate into highly volatile real wages.

},
	author = {Miguel Angel Santos}
}
@report {647571,
	title = {The Demand for and Supply of Nostalgic Products among the Albanian-Americans: A Survey},
	year = {2015},
	month = {12/2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	The U.S. is home to more than 200,000 ethnic Albanians, about half of whom are emigrants from the Republic of Albania. Despite the significant Albanian population in the U.S., official trade of Albanian goods in the U.S. almost does not exist.



	We surveyed about 200 Albanian-Americans and several stores offering goods imported from the Balkan region of Europe in three U.S. metropolitan areas with large Albanian population in order to study their purchasing habits. We found that the willingness to purchase products from the region of origin is certainly not matched by an adequate supply. The stores which offer such products are few, often hard to reach and offer limited supplies of a small variety of commodities. In the study, we recommend steps to strengthen the market for nostalgic good through continued market research, trade-related technical assistance, diaspora-donor partnerships for nostalgic trade development and trade fairs.

},
	author = {Manuel Orozco}
}
@report {647581,
	title = {Revitalizing the Albanian Electricity Sector},
	year = {2015},
	month = {11/2015},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	In an attempt to recuperate its dysfunctional electricity distribution system, Albania privatized its sole electricity distribution company in 2009. Disappointed with the results of the privatization, just five years later, the State of Albania renationalized the company.



	The case study {\textquotedblleft}Revitalizing the Albanian Electricity Sector{\textquotedblright} analyzes the key sources of inefficiencies in the electricity distribution sector in Albania and the structural problems of the current state-owned company. It explains how the tariff setting and the failed infrastructural investments triggered a chain effect of financial instability which spilled beyond the limits of the electricity sector and discusses possible reforms to the sector.

},
	author = {Ozair Ali}
}
@article {644206,
	title = {Report on the Poblacion Flotante of Bogota},
	year = {2015},
	abstract = {In this document we describe the size of the Poblacion Flotante ofBogota (D.C.). The Poblacion Flotante is composed by people who liveoutside Bogota (D.C.), but who rely on the city for performing their job.We estimate the Poblacion Flotante impact relying on a new data sourceprovided by telecommunications operators in Colombia, which enables usto estimate how many people commute daily from every municipality ofColombia to a specic area of Bogota (D.C.). We estimate that the size ofthe Poblacion Flotante could represent a 5.4\% increase of Bogota (D.C.){\textquoteright}spopulation. During weekdays, the commuters tend to visit the city centermore.},
	author = {Michele Coscia and Neffke, Frank and Eduardo Lora}
}
@article {632931,
	title = {New Insights About Wage Inequality in Colombia},
	year = {2015},
	abstract = {This paper presents a descriptive analysis of wage inequality in Colombia by cities and industries and attempts to evaluate the impact of the inequality of industries on inequality of cities. Using the 2010-2014 Colombian Social Security data, we calculate the gini coefficient for cities and industries and draw comparisons between their distributions. Our results show that while cities are unequal in similar ways, industries differ widely on how unequal they can be with ginis. Moreover, industrial structure plays a significant role to determine city inequality. Industrial framework proves to be a key element in this area for researches and policymakers.},
	author = {Andres Gomez-Lievano and Juan Tellez and Eduardo Lora}
}
@webarticle {620546,
	title = {How Should We Prevent the Next Financial Crisis?},
	year = {2015},
	author = {Hausmann, Ricardo}
}
@webarticle {620541,
	title = {What are the Challenges of Economic Growth?},
	year = {2015},
	author = {Hausmann, Ricardo}
}
@webarticle {620506,
	title = {What Should We Do About Inequality?},
	year = {2015},
	author = {Hausmann, Ricardo}
}
@article {617791,
	title = {Evidence That Calls-Based and Mobility Networks Are Isomorphic},
	journal = {PLOS One},
	volume = {10},
	year = {2015},
	note = {
	M. Coscia blog: The Limited Powers of Telecommunications

},
	abstract = {
	Social relations involve both face-to-face interaction as well as telecommunications. We can observe the geography of phone calls and of the mobility of cell phones in space. These two phenomena can be described as networks of connections between different points in space. We use a dataset that includes billions of phone calls made in Colombia during a six-month period. We draw the two networks and find that the call-based network resembles a higher order aggregation of the mobility network and that both are isomorphic except for a higher spatial decay coefficient of the mobility network relative to the call-based network: when we discount distance effects on the call connections with the same decay observed for mobility connections, the two networks are virtually indistinguishable.

},
	url = {http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0145091},
	author = {Michele Coscia and Hausmann, Ricardo}
}
@article {586296,
	title = {Implementing Productive Development Policies in Chiapas: Institutional Framework},
	year = {2015},
	abstract = {
	This document proposes a new institutional framework for the implementation of productive development policies (PDP) in Chiapas , with the objective of promoting a structural change in the Chiapas economy in search of greater diversity and productive complexity.



	The first section contains a diagnosis of the current context of PDP in the State. A low degree of implementation and execution is observed , despite the abundance of analysis, prescriptions and initiatives to support private companies. This situation cannot be attributed to the scarcity of resources. Although there are not many resources available at the state level for PDPs, there are at the level of existing federal programs. These are coordination and leadership deficiencies in the public sector , which interact with coordination problems within the private sector itself , with the perception of political-institutional instability , and with a history of mistrust, to form a scenario of little collaboration at different levels, so that many of the existing opportunities are wasted.



	The second section describes the conceptual foundations for a new institutional framework that enables the effective implementation of PDP, reflected in four basic principles . First, the new framework must be built with relatively few state budget resources . Second, it is emphasized that it should focus on the coordination between the public and private sectors , which requires specific skills and knowledge within the public sector, the building of a relationship of trust , and the proactive promotion of the organization and coordination of the private sector.. Third, an emphasis on the provision of public goods and services, and not market interventions. Fourth, the promotion of a dynamic iterative process.



	Once the principles have been established, the third section details the specific coordination proposal for the implementation of the new institutional framework. She focuses on the following five points. First, the designation of an implementing body on which the leadership and responsibility for the PDP implementation process clearly falls. Second, it is recommended to provide said entity with a technically competent staff. Third, it must have political autonomy. Fourth, it must be proactive, in an action-oriented dynamic process. Lastly, you must foster leadership in the private sector. At the end, illustrative examples of how the practical implementation of this dynamic process could be given are discussed.

},
	author = {Filipe Campante and Albert Sole}
}
@article {586596,
	title = {Pilot of Inclusive Growth in indigenous communities of Chiapas (Cruzt{\'o}n, Chamula)},
	year = {2015},
	abstract = {
	The Growth Lab at Harvard{\textquoteright}s Center for International Development, the Los Grobo Foundation, and the School of Senior Management and Business Administration of Barcelona (EADA), with the support of the Ministry of Finance and Public Credit of the Government of Mexico, have partnered to conduct an exploration of the productive attitudes and skills of the indigenous communities of Chiapas. Given the high degree of dispersion of these communities, we have decided to select a pilot location, relatively close to urban areas, and implement the methodology of the Empower Communities program developed by the Los Grobo Foundation there.



	Our final objective is to increase the understanding of the social, political, cultural and productive complexity of the indigenous communities of Chiapas, using as a vehicle a methodology that promotes participatory diagnosis, identifies capacities and resources, in the process of designing a collective development plan. territorial. Through the pilot implementation of Empower Communities, the team seeks to create a knowledge base that allows us to strengthen our capacity to design and implement development policies in indigenous communities with a productive aspect, as a complement to the social assistance policies that predominate in the place.

},
	author = {Miguel Angel Santos and Silvio Dal Buoni and Celeste Lusetti and Elisabeth Garriga}
}
@article {566636,
	title = {Chiapas Growth Diagnosis: The Trap of Low Productivity},
	year = {2015},
	abstract = {
	Chiapas is not only the lowest per capita entity in Mexico, but also the one that has grown the least during the last decade. As a result, the gap that separates it from the rest of the country has been widening significantly. This performance contrasts with the environment of relative macroeconomic and institutional stability that has prevailed during this period.



	The low level of income in Chiapas is consistent with the inability of the state to produce things that it can sell beyond its limits. Its per capita exports are among the lowest in Mexico and are concentrated in a series of agricultural primary products, which are traded in highly competitive markets with very low margins.



	What are the reasons behind Chiapas{\textquoteright} poor economic performance? This document follows the growth diagnosis methodology developed by Hausmann, Rodrik and Velasco (2005), adapting it to a sub-national context. Our objective remains the same: to identify the main constraints to economic growth in Chiapas.



	According to the results of our analysis, the main restrictions on the growth of the state are not found in any of the usual suspects. Low levels of education to some extent are associated with the backwardness of Chiapas, but barely enough to explain a small part of the gap. The orography and the climate of Chiapas represent a challenge for the lifting and maintenance of its infrastructure, but the latter does not appear as the main restriction to the development of its productive fabric. There is also no evidence of credit market failures. The low levels of private credit in Chiapas are more associated with the low productivity of the economic activities carried out there than with bottlenecks or insufficiencies in the supply of financing.



	Our conclusion is that Chiapas is in a (low) productivity trap. Its main problem is that it has an economy of very low complexity or sophistication, which reflects its few productive capacities. Modern production systems require a number of complementary inputs that are absent in Chiapas. In this context, productive diversity and private investment are low because returns to investment are also very low. Since the demand derived from private investment is low, it inhibits the emergence of a supply of complementary inputs, giving rise to a problem of coordination similar to that of the egg and the hen. Solving this coordination problem requires state intervention. Some of the few cases of manufactured exports that exist in Chiapas have resulted from successful state interventions to coordinate the existence of inputs needed for production with the demand for them. This feature provides the supporting argument that justifies the creation of Special Economic Zones.



	In Chiapas, this situation is further aggravated by the combination of three factors: (1) high government transfers, (2) lack of public transportation and (3) low educational level.



	Government transfers have effects similar to those identified in the economic literature of the Dutch disease: to increase the relative costs of tradable goods by tilting economic activity to the non-tradable sectors. The absence of a public transport system directly reduces the net benefit of working in the city if you live in the countryside. Thus, a dual equilibrium has been established with significant differences between wages across the entire range of professions and occupations between cities and their nearest rural communities. Finally, although Chiapas has gradually closed the educational gap that separates it from the rest of the country, there are still significant differences. In our opinion, This gap is due to the fact that the decision to accumulate years of schooling is partly endogenous to the returns obtained from education. Seen this way, education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. Education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. Education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. For each educational level it is more profitable to emigrate (to a place where other complementary inputs exist that make possible a greater productivity and a higher salary) than to stay to work in the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. For each educational level it is more profitable to emigrate (to a place where other complementary inputs exist that make possible a greater productivity and a higher salary) than to stay to work in the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination.



	The policy implications of this diagnosis point to the need to take advantage of the knowledge that already exists in the greater populated centers of Chiapas and in the rest of Mexico to promote diversification towards other more complex activities that can build upon the capacities already Existing in the area. The creation of a public transport system linking the rural communities surrounding the city could solve the constraint of labor shortages, while opening up greater urban employment opportunities for the inhabitants of neighboring rural communities. This is a typical example of the egg and chicken dynamics that prevails in Chiapas, since a minimum scale of operation is required for the creation of an efficient public transport system,



	Our prescription suggests that we take the mountain to Muhammad, since Muhammad has not gone to the mountain. That is to say, to try to solve the problems of coordination through an intervention that approaches the work opportunities to where the workers are, given that under the current conditions the latter do not find it profitable to get closer to where the job opportunities are. There are rural areas with low participation rates and high poverty rates in the neighborhood of San Crist{\'o}bal de las Casas. This is also a region where there is a lot of uncertainty for private economic activity, since the existence of ejido territories of community ownership predominates there. One implication of our analysis could be to create an Industrial Park around San Crist{\'o}bal, That solves the lack of public goods that has kept away the private economic activity (legal insecurity, difficulty to get land, social unrest), and at the same time bring the companies where the available labor is. The experience within Chiapas of companies like Arnecom-Yazaki indicates that with short training periods, workers could be integrated into relatively modern systems and deal productively.



	This solution is a step on which we can enter a sustained development dynamic, through successive improvements in productivity derived from the transformation of production and the progressive adoption of more modern production systems. To grow, Chiapas must start by learning to do things that are already produced in the rest of Mexico and can sell out of the state. From there, the economic fabric and knowledge associated with more modern methods of production will be created, and from there gradually the export capacity can be developed and more complex activities can be developed.\&nbsp;

},
	author = {Hausmann, Ricardo and Espinoza, Luis and Miguel Angel Santos}
}
@article {540326,
	title = {La Complejidad Economica de Chiapas},
	year = {2015},
	abstract = {
	Chiapas es el estado m{\'a}s pobre de M{\'e}xico, y tambi{\'e}n el menos diversificado en su estructura productiva. Seg{\'u}n los hallazgos de este reporte, esa dualidad no es una coincidencia casual. La escasa complejidad econ{\'o}mica de Chiapas, medida tanto por la escasa sofisticaci{\'o}n de sus exportaciones como por la exigua diversidad en la composici{\'o}n de su empleo, es uno de los factores asociados a sus bajos niveles de ingreso y escaso crecimiento. Para cambiar el patr{\'o}n de crecimiento de Chiapas es necesario cambiar su estructura de producci{\'o}n, haci{\'e}ndola m{\'a}s compleja y sofisticada.



	Afortunadamente, existe un enorme potencial para que diferentes lugares de Chiapas se muevan de manera gradual hacia productos e industrias de mayor sofisticaci{\'o}n, con base en el conocimiento con el que ya cuentan hoy en d{\'\i}a. No todos los lugares tienen el mismo potencial; la diversidad de capacidades productivas que existe en M{\'e}xico se reproduce hacia el interior de Chiapas de manera fractal. Nuestros an{\'a}lisis indican que la variedad de niveles de ingresos hacia adentro de las regiones sigue siendo mayor que las diferencias entre los promedios de esas regiones. Esta caracter{\'\i}stica justifica la utilizaci{\'o}n de un enfoque municipal, centrado en aquellas zonas urbanas de mayor poblaci{\'o}n, con suficiente diversidad y sofisticaci{\'o}n como para justificar un an{\'a}lisis de productos e industrias {\textquotedblleft}adyacentes{\textquotedblright} de mayor complejidad que requieran capacidades similares a las ya existentes. Este enfoque reconoce que la esperanza en el corto plazo para muchos ciudadanos que no habitan en la vecindad de las regiones m{\'a}s sofisticadas del estado est{\'a} en la posibilidad de moverse gradualmente hacia niveles de productividad agr{\'\i}cola m{\'a}s alta.



	En este reporte se identifican cu{\'a}les son los productos e industrias que ofrecen las mejores posibilidades de diversificaci{\'o}n productiva para incrementar la complejidad econ{\'o}mica de cuatro de los municipios m{\'a}s complejos de Chiapas, considerando sus capacidades iniciales. Como resultado, se presenta un resumen diferenciado de las principales posibilidades y los retos que debe superar cada lugar para capitalizarlas. Comit{\'a}n de Dom{\'\i}nguez debe centrarse en resolver restricciones log{\'\i}sticas asociadas a conflictos sociales para capitalizar sus posibilidades como destino tur{\'\i}stico de alto nivel, y desarrollar una base de fabricaci{\'o}n de art{\'\i}culos para el hogar y textiles.\&nbsp;San Crist{\'o}bal de las Casas est{\'a} bien posicionado para aprovechar las habilidades desarrolladas en la producci{\'o}n de artesan{\'\i}as y transferirlas a la de textiles sofisticados, en adici{\'o}n a nuevas oportunidades en recubrimientos met{\'a}licos, y fabricaci{\'o}n de alimentos y bebidas. Para materializar el potencial de Tuxtla Guti{\'e}rrez se requiere reconvertir ese amplio sector de servicios que responde a la demanda creada por el gasto p{\'u}blico en la capital del estado, en una base de manufacturas m{\'a}s diversa.\&nbsp; Los principales candidatos para movilizar esa transformaci{\'o}n productiva son los sectores de textiles y peleter{\'\i}a, procesamiento de alimentos, y ciertas categor{\'\i}as particulares de maquinaria por l{\'\i}nea de producci{\'o}n.



	De todas las regiones de Chiapas, Tapachula es la que posee mayor potencial para expandir su base exportadora hacia productos de mayor complejidad. La regi{\'o}n concentra la mayor{\'\i}a de las exportaciones del estado, y cuenta con la creaci{\'o}n de la Zona Econ{\'o}mica Especial (ZEE) y su parque industrial que permiten abordar nuevas capacidades productivas m{\'a}s complejas y adyacentes. Se identifica el potencial de los productos pl{\'a}sticos, de pinturas y pel{\'\i}culas, y de metalurgia, de relojes y equipos de soldadura, como unas oportunidades {\'u}nicas en el estado para promover su transformaci{\'o}n productiva.



	Nuestro reporte concluye con una reflexi{\'o}n sobre la necesidad de traducir la identificaci{\'o}n de los potenciales de cada una de las regiones en una realidad distinta, en una econom{\'\i}a diversa, compleja, y pr{\'o}spera. La transformaci{\'o}n productiva de Chiapas comenzar{\'a} por la mejora de la productividad agr{\'\i}cola y la creaci{\'o}n de oportunidades en las zonas urbanas que permiten aglomeraciones de conocimientos diversos en firmas complejas. El crecimiento econ{\'o}mico en Chiapas no requiere innovaci{\'o}n, sino m{\'a}s bien de que el estado aprenda del resto de M{\'e}xico a producir de manera eficiente los bienes que el resto del pa{\'\i}s ya produce. \&nbsp;



	Esta posibilidad exige a su vez de la existencia de un sector p{\'u}blico capaz de convocar a firmas existentes, y otras que ya operan en el resto de M{\'e}xico, para inaugurar nuevas facilidades de producci{\'o}n en Chiapas, combinando nuevas tecnolog{\'\i}as y conocimientos con los que ya existen en la regi{\'o}n. As{\'\i}, se va desarrollando de forma gradual la densidad de su tejido productivo y diversidad econ{\'o}mica. En {\'u}ltima instancia, la clave para capitalizar el enorme potencial de Chiapas est{\'a} en un cambio en la orientaci{\'o}n del discurso productivo, que priorice la diversificaci{\'o}n de la econom{\'\i}a y la conquista gradual de sectores de mayor complejidad como herramienta para promover el crecimiento inclusivo.

},
	author = {Hausmann, Ricardo and Cheston, Timothy and Miguel Angel Santos}
}
@article {536676,
	title = {Why is Chiapas Poor?},
	year = {2015},
	abstract = {
	Chiapas es, comoquiera que se le mire, el estado m{\'a}s atrasado de M{\'e}xico. Su ingreso por habitante es el m{\'a}s bajo de las 32 entidades federativas, apenas 40\% de la media nacional. Su tasa de crecimiento durante la d{\'e}cada 2003-2013 tambi{\'e}n fue la m{\'a}s baja (0,2\%), por lo que la brecha que lo separa del promedio nacional creci{\'o} de 53\% a 60\%. Eso quiere decir que hoy en d{\'\i}a el ingreso promedio de una entidad federal en M{\'e}xico est{\'a} dos veces y media por encima de Chiapas. Los dos estados que le siguen, Oaxaca y Guerrero, est{\'a}n 25\% y 30\% por encima de Chiapas2. De acuerdo con el Instituto Nacional de Estad{\'\i}stica y Geograf{\'\i}a de M{\'e}xico (INEGI), Chiapas es tambi{\'e}n el estado de mayor pobreza (74,7\%) y pobreza extrema (46,7\%).

},
	author = {Levy, Dan and Hausmann, Ricardo and Miguel Angel Santos and Espinoza, Luis and Miguel Flores}
}
@article {461011,
	title = {Moving to the Adjacent Possible: Discovering Paths for Export Diversification in Rwanda},
	year = {2015},
	abstract = {How can Rwanda, which currently has one of the lowest levels of income and exports per capita in the world, grow and diversify its economy in presence of significant constraints? We analyze Rwanda{\textquoteright}s historical growth and trade performance and find that Rwanda{\textquoteright}s high transportation costs and limited productive knowledge have held back greater export development and have resulted in excessive rural density. Three basic commodities {\textendash} coffee, tea, and tin {\textendash} made up more than 80 percent of the country{\textquoteright}s exports through its history and still drive the bulk of export growth today. Given Rwanda{\textquoteright}s high population density and associated land scarcity, these traditional exports cannot create enough jobs for its growing population, or sustainably drive future growth. Rwanda needs new, scalable activities in urban areas. In this report, we identify a strategy for greater diversification of exports in Rwanda that circumvents the key constraints and is separately tailored for regional and global export destinations. Our results identify more than 100 tradable products that lie at Rwanda{\textquoteright}s knowledge frontier, are not intensive in Rwanda{\textquoteright}s scarce resources, and economize on transportation costs. Our analysis produces a vision of a more diversified Rwanda, which can be used as a guide for investment promotion decisions. We illustrate an approach that can be applied to other settings in order to identify opportunities for export diversification that take seriously local constraints and external market opportunities.},
	author = {Hausmann, Ricardo and Jasmina Chauvin}
}
@article {457656,
	title = {Crony Capitalism in Egypt},
	journal = {Journal of Globalization and Development},
	year = {2015},
	abstract = {The paper studies the nature and extent of Egyptian "crony" capitalism by comparing the corporate performance and the stock market valuation of politically connected and unconnected firms, before and after the 2011 popular uprising that led to the end of President Mubarak 30 years rule. First, we identify politically connected firms and conduct an event study around the events of 2011, as well as around previous events related to rumors about Mubarak{\textquoteright}s health. We estimate the market valuation of political connections to be 20\% to 23\% of the value of connected firms. Second, we explore the mechanisms used for granting these privileges by looking at corporate behavior before 2011. It appears that these advantages allowed connected firms to increase their market size and power and their borrowings. We finally compare the performance of firms and find that the rate of return on assets of connected firms was lower than that of non-connected firms by nearly 3 percentage points. We argue that this indicates that the granting of privileges was not part of a successful industrial policy but instead, that it led to a large misallocation of capital towards less efficient firms, which together with reduced competition, led to lower economic growth.},
	author = {Hamouda Chekir and Ishac Diwan}
}
@article {443371,
	title = {From Financial Repression to External Distress: The Case of Venezuela},
	year = {2015},
	abstract = {
	Recent work has supported that there is a connection between domestic debt level and sovereign default on external debt. We examine the potential linkages in a case study of Venezuela from 1984 to 2013. This unique example encompasses multiple financial crises, cycles of liberalization and policy reversals, and alternative exchange rate arrangements. The Venezuelan experience reveals a nexus among domestic debt, financial repression, and external vulnerability. Unlike foreign currency-denominated debt, debt in domestic currency may be reduced through financial repression, a tax on bondholders and savers producing negative real interest rates. Using a variety of methodologies we estimate the magnitude of the tax from financial repression. On average, this financial repression tax (as a share of GDP) is similar to those of OECD economies, in spite of much higher domestic debt-to-GDP ratios in the latter. The financial repression "tax rate" is significantly higher in years of exchange controls and legislated interest rate ceilings. In line with earlier literature on capital controls, our comprehensive measures of capital flight document a link between domestic disequilibrium and a weakening of the net foreign asset position via private capital flight. We suggest these findings are not unique to the Venezuelan case.

},
	author = {Reinhart, Carmen and Miguel Angel Santos}
}
@article {1567280,
	title = {Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?},
	journal = {Journal of International Economics},
	volume = {92},
	number = {1},
	year = {2014},
	abstract = {The literature on knowledge diffusion shows that knowledge decays strongly with distance. In this paper we document that the probability that a product is added to a country{\textquoteright}s export basket is, on average, 65\% larger if a neighboring country is a successful exporter of that same product. For existing products, growth of exports in a country is 1.5\% higher per annum if it has a neighbor with comparative advantage in these products. While these results could be driven by a common third factor that escapes our controls, they align with our expectations of the localized character of knowledge diffusion.},
	url = {https://www.sciencedirect.com/science/article/pii/S0022199613001098},
	author = {Dany Bahar and Hausmann, Ricardo and Cesar Hidalgo}
}
@article {1489285,
	title = {Marriage, Education, and Assortative Mating in Latin America},
	journal = {Applied Economic Letters},
	volume = {21},
	number = {12},
	year = {2014},
	pages = {806-811},
	abstract = {In this article, we establish facts related to marriage and education in Latin American countries. Using census data from IPUMS International, we show how marriage and assortative mating patterns have changed from 1980 to 2000 and how the patterns in Latin America compare to the United States. We find that in Latin American countries, highly educated individuals are less likely to be married than the less educated, and the pattern is stronger for women. We also show that while it has been increasing over time, there is less positive assortative mating in Latin America than in the United States.},
	url = {https://doi.org/10.1080/13504851.2013.849375},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina}
}
@article {1489281,
	title = {Closing the gender gap in education: What is the state of gaps in labour force participation for women, wives and mothers?},
	journal = {International Labor Review},
	volume = {153},
	number = {2},
	year = {2014},
	pages = {173-207},
	abstract = {
	The educational gender gap has closed or reversed in many countries. But what of gendered labour market inequalities? Using micro-level census data for some 40 countries, the authors examine the labour force participation gap between men and women, the {\textquotedblleft}marriage gap{\textquotedblright} between married and single women{\textquoteright}s participation, and the {\textquotedblleft}motherhood gap{\textquotedblright} between mothers{\textquoteright} and non-mothers{\textquoteright} participation. They find significant heterogeneity among countries in terms of the size of these gaps, the speed at which they are changing, and the relationships between them and the educational gap. But counterfactual regression analysis shows that the labour force participation gap remains largely unexplained by the other gaps.

},
	url = {https://doi.org/10.1111/j.1564-913X.2014.00007.x},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina}
}
@report {1314132,
	title = {Fresh Tomatoes: Ideas to Build a Productive Ecosystem in Albania},
	year = {2014},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	During the last years production of fresh vegetables in Albania had an important growth due to the increase in the number of Ha using Greenhouses technologies. Many of the new investments came from former expats who spent a few years working abroad and came back -in some cases because of the crisis in Greece - with money and some experience in the field. However, although exports showed an important growth (in tomatoes, for example exports doubled from 2013 to 2011!), the sector has not been able to definitely take off and be a relevant player in the international market. The problem is not only that the share of Albania in the European trade is almost negligible but also that diversification didn{\textquoteright}t happen, quality has not improved and as a consequence the prices that Albanian producers get is very low - the lowest in Europe for some products like tomatoes. In this context, Albania has been focusing on the regional markets (probably not consciously but as a consequence of not having established a commercial relation with higher-end markets and not having a proper quality produce to offer), has been excluded from the best markets and has not improved the productive methods, practices, etc. Given this situation the building of new capacity was not necessarily a success: local markets started to be oversupplied and production losses are very high as a consequence.



	In this report we analyzed the value chain of the fresh vegetables sector, focusing on the production of tomatoes. We detail the problems of the whole value chain (from the production to the marketing), pointing out the "missing links" that are preventing Albania to become a major tomato exporter in the European market. We find that there is a huge potential for the country - in terms of the natural conditions and also in terms of competitiveness -, but it is very difficult to be reached without making a re-organization of the sector to make it more integrated and give the proper incentives to solve simultaneously all the problems.



	We found that in order to improve the general productivity of the sector it is not necessary to make huge capital disbursements. Although some of the constraints are clearly money-related, most of them are organization-related.



	What the propose in this report is a method to re-organize the sector in a way that makes it easier for the economic agents to vertically and horizontally integrate and transform the sector into a "factory", where every participant has its defined role and work is divided with specific roles. The role of the Government is twofold: first, to facilitate the organization of this model, find the actors that can lead the change and provide them the incentives to coordinate. Second, to provide all the public goods that are now missing or incomplete (not only in terms of infrastructure but also in terms of marketing, negotiations, etc). In the next sections we explain with detail the constraints and missing links we found throughout the value chain of tomatoes and propose a new model to solve them. We show that with little organizational changes, Albania could increase its tomato exports by four times in a few years.

},
	author = {Nicolas Ajzenman}
}
@article {1291586,
	title = {Expropriation risk and housing prices: Evidence from an emerging market},
	journal = {Journal of Business Research},
	volume = {67},
	number = {5},
	year = {2014},
	pages = {935-942},
	abstract = {This paper examines the microeconomic determinants of residential real estate prices in Caracas, Venezuela, using a private database containing 17,526 transactions from 2008 to 2009. The particular institutional characteristics of many countries in Latin America, and Venezuela in particular, where land invasions and expropriations (with only partial compensation) have been common threats to property owners, provide us with an opportunity to test the effects of these risks on housing prices using a unique database. The effect of these risks on property prices is negative and significant. To our knowledge, this is the first attempt to quantify these impacts in the Hedonic pricing literature applied to real estate. Size, the number of parking spaces, the age of the property, the incidence of crime, and the average income in the neighborhood are significant determinants of prices. Finally, this paper analyzes the microeconomic determinants of housing prices at the municipal level.},
	url = {http://www.sciencedirect.com/science/article/pii/S0148296313002786?via\%3Dihub},
	author = {Victor Contreras and Urbi Garay and Miguel Angel Santos and Cosme Bettancourt}
}
@article {924616,
	title = {Agents of Structural Change: The role of firms and entrepreneurs in regional diversification},
	year = {2014},
	abstract = {Who introduces structural change in regional economies: Entrepreneurs or existing firms? And do local\&nbsp;or non-local founders of establishments create most novelty in a region? Using matched employer/employee\&nbsp;data for the whole Swedish workforce, we determine how unrelated and therefore how novel\&nbsp;the activities of different establishments are to a region{\textquoteright}s industry mix. Up- and downsizing\&nbsp;establishments cause large shifts in the local industry structure, but these shifts only occasionally\&nbsp;require an expansion of local capabilities because the new activities are often related to existing local\&nbsp;activities. Indeed, these incumbents tend to align their production with the local economy, deepening\&nbsp;the region{\textquoteright}s specialization. In contrast, structural change mostly originates via new establishments,\&nbsp;especially those with non-local roots. Moreover, although entrepreneurs start businesses more often in\&nbsp;activities unrelated to the existing regional economy, new establishments founded by existing firms\&nbsp;survive in such activities more often, inducing longer-lasting changes in the region.},
	author = {Neffke, Frank and Matte Hartog and Ron Boschma and Martin Henning}
}
@report {647611,
	title = {Integration in the Balkans: Albania and Kosovo},
	year = {2014},
	month = {10/2014},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {
	Despite their historic and ethnic ties, trade and investment between Albania and Kosovo remains underdeveloped. To be sure, even if fully developed, Kosovo is unlikely to play a major role in Albanian external economic relations. Nonetheless, increased economic integration between the two countries can serve as the basis not only for enhancing the ties between the two countries, but also for spurring the measures that could act as a springboard for Albania{\textquoteright}s integration with respect to other countries in the Balkans as well as with the EU. \&nbsp;

},
	author = {Robert Lawrence and Ermal Frasheri and Maria Qazi}
}
@article {457666,
	title = {The retail market as a complex system},
	journal = {EPJ Data Science},
	volume = {3},
	number = {33},
	year = {2014},
	abstract = {
	
		Aim of this paper is to introduce the complex system perspective into retail market analysis. Currently, to understand the retail market means to search for local patterns at the micro level, involving the segmentation, separation and profiling of diverse groups of consumers. In other contexts, however, markets are modelled as complex systems. Such strategy is able to uncover emerging regularities and patterns that make markets more predictable, e.g. enabling to predict how much a country{\textquoteright}s GDP will grow. Rather than isolate actors in homogeneous groups, this strategy requires to consider the system as a whole, as the emerging pattern can be detected only as a result of the interaction between its self-organizing parts. This assumption holds also in the retail market: each customer can be seen as an independent unit maximizing its own utility function. As a consequence, the global behaviour of the retail market naturally emerges, enabling a novel description of its properties, complementary to the local pattern approach. Such task demands for a data-driven empirical framework. In this paper, we analyse a unique transaction database, recording the micro-purchases of a million customers observed for several years in the stores of a national supermarket chain. We show the emergence of the fundamental pattern of this complex system, connecting the products{\textquoteright} volumes of sales with the customers{\textquoteright} volumes of purchases. This pattern has a number of applications. We provide three of them. By enabling us to evaluate the sophistication of needs that a customer has and a product satisfies, this pattern has been applied to the task of uncovering the hierarchy of needs of the customers, providing a hint about what is the next product a customer could be interested in buying and predicting in which shop she is likely to go to buy it.
	

	
		\&nbsp;
	



	\&nbsp;

},
	url = {http://www.epjdatascience.com/content/3/1/33},
	author = {Pennacchioli, Diego and Michele Coscia and Salvatore Rinzivillo and Fosca Giannotti and Dino Pedreschi}
}
@article {371261,
	title = {How should Uganda grow?},
	year = {2014},
	abstract = {Income per capita in Uganda has doubled in the last 20 years. This remarkable performance has been buoyed by significant aid flows and large external imbalances. Economic growth has been concentrated in non-tradable activities leading to growing external imbalances and a growing gap between rural and urban incomes. Future growth will depend on achieving sufficient export dynamism. In addition, growth faces a number of other challenges: low urbanization rate, rapid rural population growth and high dependency ratios. However, both the dependency ratio and fertility rates have begun to decline recently. Rural areas are also severely overcrowded with low-productivity subsistence agriculture as a pervasive form of production. Commercial agriculture has great possibilities to increase output, but as the sector improves its access to capital, inputs and technology it will shed jobs rather than create them.These challenges combined tell us that future growth in Uganda will require a rapid rate of export growth and economic diversification. The country faces the prospect of an oil boom of uncertain size and timing. It could represent an important stepping stone to achieve external sustainability, expanded income and infrastructure and a greater internal market. However, as with all oil booms, the challenges include avoiding the Dutch disease, managing the inevitable volatility in oil incomes and avoiding inefficient specialization in oil. Policies that set targets for the non-oil deficit could help manage some of these effects, but a conscious strategy to diversify would still be needed.The best strategy is therefore to use the additional oil revenue and accompanying investments to promote a diversification strategy that is sustainable. To determine how to encourage such a transformation, we draw on a new line of research that demonstrates how development seldom implies producing more of the same. Instead, as countries grow, they tend to move into new industries, while they also increase productivity in existing sectors. In this report, we analyze what those new industries might be for Uganda.To do so, we first look to those products which balance the desire to increase the diversification and complexity of production, while not over-stretching existing capabilities. These include mostly agricultural inputs, such as agrochemicals and food processing. In addition, Uganda should concurrently develop more complex industries, such as construction materials, that are reasonably within reach of current capabilities and will be in great demand in the context of an oil boom. Here, the fact that Uganda is landlocked and faces high import costs will provide natural protection to the expanding demand in Uganda and neighboring countries. We conclude with a discussion of the government policies that will support Uganda in developing new tradable industries.},
	author = {Hausmann, Ricardo and Brad Cunningham and John Matovu and Rosie Osire and Kelly Wyett}
}
@article {371221,
	title = {Implied Comparative Advantage},
	journal = {CID Working Paper},
	volume = {276},
	year = {2014},
	note = {Revised July 2020.},
	abstract = {
	The comparative advantage of a location shapes its industrial structure. Current theoretical models based on this principle do not take a stance on how comparative advantages in different industries or locations are related with each other, or what such patterns of relatedness might imply about the underlying process that governs the evolution of comparative advantage. We build a simple Ricardian-inspired model and show this hidden information on inter-industry and inter-location relatedness can be captured by simple correlations between the observed patterns of industries across locations or locations across industries. Using the information from related industries or related locations, we calculate the implied comparative advantage and show that this measure explains much of the location{\textquoteright}s current industrial structure. We give evidence that these patterns are present in a wide variety of contexts, namely the export of goods (internationally) and the employment, payroll and number of establishments across the industries of subnational regions (in the US, Chile and India). The deviations between the observed and implied comparative advantage measures tend to be highly predictive of future industry growth, especially at horizons of a decade or more; this explanatory power holds at both the intensive as well as the extensive margin. These results suggest that a component of the long-term evolution of comparative advantage is already implied in today{\textquoteright}s patterns of production.

},
	author = {Hausmann, Ricardo and Cesar A. Hidalgo and Daniel P. Stock and Muhammed A. Yildirim}
}
@article {371231,
	title = {Trillions Gained and Lost: Estimating the Magnitude of Growth Episodes},
	journal = {CID Working Paper},
	volume = {279},
	year = {2014},
	abstract = {We propose and implement a new technique for measuring the total magnitude of a growth episode: the change in output per capita resulting from one structural break in the trend growth of output (acceleration or deceleration) to the next. The magnitude of the gain or loss from a growth episode combines (a) the difference between the post-break growth rate versus a counter-factual "no break" growth rate and (b) the duration of the episode to estimate the difference in output per capita at the end of an episode relative to what it would have been in the "no break" scenario. We use three "counter-factual" growth rates that allow for differing degrees of regression to global average growth: "no change" (zero regression to the mean), "world episode average" (full regression to the mean) and "unconditional predicted growth" (which uses a regression for each growth episode to predict future growth based only on past growth and episode initial level). We can also calculate the net present value at the start of an episode of the gain or loss in output comparing the actual evolution of output per capita versus a counter-factual. This method allows us to place dollar figures on growth episodes. The top 20 growth accelerations have Net Present Value (NPV) magnitude of 30 trillion dollars - twice US GDP. Conversely, the collapse in output in Iran between 1976 and 1988 produced an NPV loss of $143,000 per person. The top 20 growth decelerations account for 35 trillion less in NPV of output. Paraphrasing Lucas, once one begins to think about what determines growth events that cause the appearance or disappearance of output value equal to the total US economy, it is hard to think about anything else.},
	author = {Lant Pritchett and Kunal Sen and Sabyasachi Kar and Selim Raihan}
}
@website {1594671,
	title = {Colombia Atlas of Economic Complexity (Datlas)},
	year = {2014}
}
@booklet {485601,
	title = {Economic Complexity Brief},
	year = {2013},
	abstract = {How does an economy grow? What is economic complexity? How do we determine where countries can start to diversify their production? The growth theories of Ricardo Hausmann and others at CID are explained in this 5 page briefing.}
}
@book {460336,
	title = {The Atlas of Economic Complexity: Mapping Paths to Prosperity},
	year = {2013},
	pages = {367},
	publisher = {MIT Press},
	organization = {MIT Press},
	edition = {2nd},
	address = {Cambridge},
	abstract = {
	
		From the foreword:
	

	
		It has been two years since we published the\&nbsp;first edition\&nbsp;of\&nbsp;The Atlas of Economic Complexity. "The Atlas," as we have come to refer to it, has helped extend the availability of tools and methods that can be used to study the productive structure of countries and its evolution.
	

	
		Many things have happened since the first edition of The Atlas was released at CID{\textquoteright}s Global Empowerment Meeting, on October 27, 2011. The new edition has sharpened the theory and empirical evidence of how knowhow affects income and growth and how knowhow itself grows over time. In this edition, we also\&nbsp;update our numbers to 2010, thus adding two more years of data and extending our projections. We also undertook a major overhaul of the data. Sebasti{\'a}n Bustos and Muhammed Yildirim went back to the original sources and created a new dataset that significantly improves on the one used for the 2011 edition. They developed a new technique to clean the data, reducing inconsistencies and the problems caused by misreporting. The new dataset provides a more accurate estimate of the complexity of each country and each product. With this improved dataset, our results are even stronger.
	

	
		All in all, the new version of The Atlas provides a more accurate picture of each country{\textquoteright}s economy, its "adjacent possible" and its future growth potential.
	

	
		For up-to-date datasets and new visualizations, visit atlas.cid.harvard.edu.
	

	
		\&nbsp;
	

},
	url = {https://mitpress.mit.edu/books/atlas-economic-complexity},
	author = {Hausmann, Ricardo and C{\'e}sar A. Hidalgo and Sebastian Bustos and Michele Coscia and Alexander Simoes and Muhammed A. Yildirim}
}
@book {460271,
	title = {The Dynamics of Economic Growth: A Visual Handbook of Growth Rates, Regimes, Transitions and Volatility},
	year = {2013},
	publisher = {ESID},
	organization = {ESID},
	abstract = {Why there are such significant and persistent differences in living standards across countries is one of the most important and challenging areas of development policy. In spite of a voluminous literature on the causes of economic growth, we still have a long way to go in understanding why the growth experiences of countries differ so much, why growth changes so much (for good and ill) over time, and why only a handful of developing countries have seen their incomes converge to the levels observed in developed countries. To understand the causes of economic growth, we first need to understand what growth is. Much of the focus in the academic and policy literature on "growth" has been on steady-state or long-run average rates of growth of output per capita, or equivalently, comparing levels of income. But the focus on one single growth rate for a particular country misses the point that most countries observe dramatic changes in their growth of per capita income. We present visually the dynamics of the growth experiences of 125 countries. The graphs themselves (and embedded numeric information) highlight the key point that we would like to convey in this Handbook {\textendash} that economic growth is dynamic and episodic and that many countries have gone through very different growth phases. We identify the timing and magnitude of "breaks" or "episodes" or "regime transitions" for all our 125 countries from the application of a standard statistical procedure. Viewing economic growth as transitions across growth phases would imply that we would need to move beyond current approaches to growth, and that new "third generation" theoretical models and empirical methods would need to be developed to understand what determines economic growth.},
	url = {http://www.effective-states.org/handbook/},
	author = {Sabyasachi Kar and Lant Pritchett and Selim Raihan and Kunal Sen}
}
@book {460351,
	title = {Rising Tide: Is Growth in Emerging Economies Good for the United States?},
	year = {2013},
	publisher = {Peterson Institute for International Economics},
	organization = {Peterson Institute for International Economics},
	abstract = {In 1963, US President John F. Kennedy said that {\textquoteright}{\textquoteright}a rising tide lifts all the boats. And a partnership, by definition, serves both parties, without domination or unfair advantage.{\textquoteright}{\textquoteright} US international economic policy since World War II has been based on the premise that foreign economic growth is in America{\textquoteright}s economic, as well as political and security, self-interest. The bursting of the speculative dot.com bubble, slowing US growth, and the global financial crisis and its aftermath, however, have led to radical changes in Americans{\textquoteright} perceptions of the benefits of global trade. Many Americans believe that trade with emerging-market economies is the most important reason for US job loss, especially in manufacturing, is detrimental to American welfare and an important source of wage inequality. Several prominent economists have reinforced these public concerns.In this study, Lawrence Edwards and Robert Z. Lawrence confront these fears through an extensive survey of the empirical literature and in depth analyses of the evidence. Their conclusions contradict several popular theories about the negative impact of US trade with developing countries. They find considerable evidence that while adjusting to foreign economic growth does present America with challenges, growth in emerging-market economies is in America{\textquoteright}s economic interest. It is hard, of course, for Americans to become used to a world in which the preponderance of economic activity is located in Asia. But one of America s great strengths is its adaptability. And if it does adapt, the American economy can be buoyed by that rising tide.},
	url = {http://bookstore.piie.com/book-store/5003.html},
	author = {Lawrence Edwards and Robert Z. Lawrence}
}
@article {457676,
	title = {The Structure and Dynamics of International Development Assistance},
	journal = {Journal of Globalization and Development},
	volume = {3},
	number = {2},
	year = {2013},
	pages = {1-42},
	abstract = {
	
		
			We study the structure of international aid coordination by creating and analyzing a tripartite network of donor organizations, recipient countries and development issues using web-based information. We develop a measure of coordination and find that it is moderate, achieving about 60\% of its theoretical maximum. Many countries are strongly connected to organizations that are related to the issues that are salient there. Nevertheless, we identify many countries that are poorly served, issues that are inadequately attended to, and organizations that focus on the wrong combination of places and issues. Our approach may be used to improve decentralized coordination.
		
	

},
	url = {https://ideas.repec.org/a/bpj/globdv/v3y2013i2p1-42n1.html},
	author = {Michele Coscia and Hausmann, Ricardo and C{\'e}sar A. Hidalgo}
}
@article {371401,
	title = {Debt Levels, Debt Composition, and Sovereign Spreads in Emerging and Advanced Economies},
	year = {2013},
	abstract = {
	This paper studies the relationship between sovereign spreads and the interaction between debt composition and debt levels in advanced and emerging market countries. It finds that in emerging market countries there is a significant correlation between spreads and debt levels. This correlation, however, is not statistically significant in countries where most public debt is denominated in local currency. In advanced economies, the magnitude of the correlation between debt levels and spreads is about one fifth of the corresponding correlation for emerging market economies. In Eurozone countries, however, the correlation between spreads and debt ratios is similar to that of emerging market countries. The paper also shows that the financial crisis amplified the relationship between spreads and debt levels within the Eurozone but had no effect on the relationship between spreads and debt in standalone countries. Finally, the paper shows that the relationship between debt levels and spreads is amplified by the presence of large net foreign liabilities. This amplifying effect of net foreign liabilities is larger in the Eurozone than in standalone advanced economies. The paper concludes that debt composition matters and corroborates the original sin hypothesis that, rather than being a mere reflection of institutional weaknesses, the presence of foreign currency debt increases financial fragility and leads to suboptimal macroeconomic policies.

},
	author = {Hausmann, Ricardo and Salvatore Dell{\textquoteright}Erba and Ugo Panizza}
}
@article {371391,
	title = {Looking like an Industry: Supporting Commercial Agriculture in Africa},
	year = {2013},
	abstract = {It has long been known that countries only converge conditionally i.e. poor countries catch up with richer ones only if they adopt policies and institutions that are conducive to economic growth. Recently, Dani Rodrik (2011) has shown that manufacturing industries, unlike countries, converge unconditionally. We look at countries{\textquoteright} performance in agriculture and find that agricultural productivity actually shows unconditional divergence (and like GDP, conditional converge). This means that agriculture very much behaves like a country and not like industry. We find however that many crops do converge unconditionally, like industry. The question we then ask is: how can we make particular sectors in agriculture more like an "industry" and less like a "country?" The paper argues that the solution lies in finding business models that provide capital and access to missing markets in an aggregated fashion, thus forming high-productivity islands of quality. We provide examples and a discussion of promising business models that do that.},
	author = {Ishac Diwan and Olivier Gaddah and Rosie Osire}
}
@article {371396,
	title = {Promoting Millennium Development Ideals: The Risks of Defining Development Down},
	year = {2013},
	abstract = {
The approach of 2015, the target date of the Millennium Development Goals, sets the stage for a global reengagement on the question of "what is development?" We argue that the post-2015 development framework for development should include Millennium Development Ideals which put into measurable form the high aspirations countries have for the well-being of their citizens. Standing alone, low bar targets like the existing Millennium Development Goals "define development down" and put at risk both domestic and global coalitions to support to an inclusive development agenda. Measuring development progress exclusively by low bar targets creates the illusion that specific targeted programs can be an adequate substitute for a broad national and global development agenda.


},
	author = {Lant Pritchett and Charles Kenny}
}
@article {371311,
	title = {The State, Socialization, and Private Schooling: When Will Governments Support Alternative Producers?},
	year = {2013},
	abstract = {
	Understanding the institutional features that can improve learning outcomes and reduce inequality is a top priority for international and development organizations around the world. Economists appear to have a good case for support to non-governmental alternatives as suppliers of schooling. However, unlike other policy domains, freer international trade or privatization, economists have been remarkably unsuccessful in promoting the adoption of this idea. We develop a simple general positive model of why governments typically produce schooling which introduces the key notion of the lack of verifiability of socialization and instruction of beliefs, which makes third party contracting for socialization problematic. We use the model to explain variations around the world in levels of private schooling. We also predict the circumstances in which efforts to promote the different alternatives to government production {\textendash} like charter, voucher, and scholarship - are likely to be successful.

},
	author = {Lant Pritchett and Viarengo, Martina}
}
@article {371411,
	title = {When is Prevention More Profitable than Cure? The Impact of Time-Varying Consumer Heterogeneity},
	year = {2013},
	abstract = {We argue that in pharmaceutical markets, variation in the arrival time of consumer heterogeneity creates differences between a producer{\textquoteright}s ability to extract consumer surplus with preventives and treatments, potentially distorting R\&amp;D decisions. If consumers vary only in disease risk, revenue from treatments{\textemdash}sold after the disease is contracted, when disease risk is no longer a source of private information{\textemdash}always exceeds revenue from preventives. The revenue ratio can be arbitrarily high for sufficiently skewed distributions of disease risk. Under some circumstances, heterogeneity in harm from a disease, learned after a disease is contracted, can lead revenue from a treatment to exceed revenue from a preventative. Calibrations suggest that skewness in the U.S. distribution of HIV risk would lead firms to earn only half the revenue from a vaccine as from a drug. Empirical tests are consistent with the predictions of the model that vaccines are less likely to be developed for diseases with substantial disease-risk heterogeneity.},
	author = {Michael Kremer and Christopher Snyder}
}
@article {371406,
	title = {Who are the Democrats? Leading Opinions in the Wake of Egypt{\textquoteright}s 2011 Popular Uprisings},
	year = {2013},
	abstract = {I look at changes in public opinion in Egypt, using the two waves of 2000 and 2008 of the World Value Survey. I find that during this period, there has been a major increase in popular support for democracy, a sizable rise in concerns about inequality, and a fall in support for political Islam. I examine the extent to which these changes are connected, and how they clustered along class, age, and education lines. The main findings are that while in 2000, younger Egyptians were more progressive than their parents, by 2008, Egyptian society had become much more organized around class interests and showed little inter-generational differentiation. New democrats come from all backgrounds, but with a concentration among those on the left. Among social classes, the middle class emerges as the main champion for democracy, driven by both aspiration and grievances motives},
	author = {Ishac Diwan}
}
@inbook {1489272,
	title = {Structural Transformation in Egypt, Morocco, and Tunisia: A Comparison with China, South Korea, and Thailand},
	year = {2012},
	pages = {15-68},
	publisher = {African Development Bank},
	organization = {African Development Bank},
	abstract = {
	Countries seldom grow rich by producing more of the same. Development implies changes in what countries produce. Structural transformation is the process by which countries move into new economic activities. In turn, new economic activities are the ones that are able to achieve higher levels of productivity, pay higher wages and increase the level of prosperity of a country{\textquoteright}s population. Structural transformation is crucial for economic growth: countries that are able to upgrade their production and exports by moving into new and more complex economic activities tend to grow faster.

},
	url = {https://www.afdb.org/sites/default/files/documents/projects-and-operations/comparative_study_on_export_policies_in_egypt_morocco_tunisia_and_south_korea.pdf},
	author = {Hausmann, Ricardo and Sebasti{\'a}n Bustos}
}
@article {457681,
	title = {The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems},
	journal = {PLoS ONE},
	volume = {7},
	number = {11},
	year = {2012},
	pages = {1-8},
	abstract = {
	
		In economic systems, the mix of products that countries make or export has been shown to be a strong leading indicator of economic growth. Hence, methods to characterize and predict the structure of the network connecting countries to the products that they export are relevant for understanding the dynamics of economic development. Here we study the presence and absence of industries in international and domestic economies and show that these networks are significantly nested. This means that the less filled rows and columns of these networks{\textquoteright} adjacency matrices tend to be subsets of the fuller rows and columns. Moreover, we show that their nestedness remains constant over time and that it is sustained by both, a bias for industries that deviate from the networks{\textquoteright} nestedness to disappear, and a bias for the industries that are missing according to nestedness to appear. This makes the appearance and disappearance of individual industries in each location predictable. We interpret the high level of nestedness observed in these networks in the context of the neutral model of development introduced by Hidalgo and Hausmann (2009). We show that the model can reproduce the high level of nestedness observed in these networks only when we assume a high level of heterogeneity in the distribution of capabilities available in countries and required by products. In the context of the neutral model, this implies that the high level of nestedness observed in these economic networks emerges as a combination of both, the complementarity of inputs and heterogeneity in the number of capabilities available in countries and required by products. The stability of nestedness in industrial ecosystems, and the predictability implied by it, demonstrates the importance of the study of network properties in the evolution of economic networks.
	

	
		\&nbsp;
	

},
	url = {http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0049393},
	author = {Sebasti{\'a}n Bustos and Charles Gomez and Hausmann, Ricardo and C{\'e}sar A. Hidalgo}
}
@article {457716,
	title = {Empirical Confirmation of Creative Destruction from World Trade Data},
	journal = {PLoS ONE},
	volume = {7},
	number = {6},
	year = {2012},
	abstract = {
	
		We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy indeed follows the concept of\&nbsp;creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite{\textendash}disappearances followed by periods of appearances{\textendash}is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e., creative destruction. We find a tendency that more complex products drive out less complex ones, i.e., progress has a direction. Finally we show that the growth trajectory of a country{\textquoteright}s product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics.
	

	
		\&nbsp;
	

},
	url = {https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0038924},
	author = {Peter Klimek and Hausmann, Ricardo and Stefan Thurner}
}
@article {371536,
	title = {Capital and Labor Mobility and the Size of Sub-national Governments: Evidence from a Panel of Mexican States},
	year = {2012},
	abstract = {
	We examine in this paper the relation between government size and capital and labor openness employing a panel of the 32 Mexican states over the period\&nbsp;1996-2006. Making use of two alternative measures of capital and labor openness and employing several alternative econometric specifications, we first find systematic positive effects of our openness measures on the size of the states{\textquoteright} total government spending. Thereafter, we break down total government expenditure and focus on three subcategories of spending associated with social welfare: education, health and poverty alleviation programs. We find that FDI flows, our proxy for capital openness, are not significant determinants of the state{\textquoteright}s social spending, but labor openness, in the form of international migration, has a significant and even greater impact on some of the aforementioned categories than on total spending.

},
	author = {Ren{\'e} Cabral Torres}
}
@article {371451,
	title = {Conflicts Over Land and Threats to Customary Tenure in Africa Today},
	year = {2012},
	abstract = {Issues swirling around land across Africa have never been so central to key social and political-economic dynamics as they are at the present time. The first part of the paper briefly reviews the construction of customary tenure and the historical phases of administrative interventions into land tenure, and considers their heritage in contemporary situations. The second part reviews the increasing competition and conflict centered on land; the increase in various types of land transfers that are implicated in the pervasive social conflict focused on land; and the associated rise in social inequality and contestation over belonging and citizenship. The third and final part discusses {\textquoteleft}land grabs{\textquoteright}, the most recent surge of international interest in African land, and external and internal threats to {\textquoteleft}customary{\textquoteright} rights in land. The overall conclusion is that while relations around land have long been central to political economy, culture and society across the continent, their greater salience in intensifying struggles among actors within and from outside Africa has significance for the disposition of authority, property and citizenship.},
	author = {Pauline Peters}
}
@article {371426,
	title = {Crony Capitalism in Egypt},
	year = {2012},
	abstract = {The paper studies the nature and extent of Egyptian "crony" capitalism by comparing the corporate performance and the stock market valuation of politically connected and unconnected firms, before and after the 2011 popular uprising that led to the end of President Mubarak 30 years rule. First, we identify politically connected firms and conduct an event study around the events of 2011, as well as around previous events related to rumors about Mubarak{\textquoteright}s health. We estimate the market valuation of political connections to be 20\% to 23\% of the value of connected firms. Second, we explore the mechanisms used for granting these privileges by looking at corporate behavior before 2011. It appears that these advantages allowed connected firms to increase their market size and power and their borrowings. We finally compare the performance of firms and find that the rate of return on assets of connected firms was lower than that of non-connected firms by nearly 3 percentage points. We argue that this indicates that the granting of privileges was not part of a successful industrial policy but instead, that it led to a large misallocation of capital towards less efficient firms, which together with reduced competition, led to lower economic growth.*Formerly titled: Distressed Whales on the Nile - Egypt Capitalists in the Wake of the 2010 Revolution},
	author = {Hamouda Chekir and Ishac Diwan}
}
@article {371501,
	title = {The Dynamics of Nestedness Predicts the Evolution of Industrial Ecosystems},
	year = {2012},
	abstract = {
	Decades of research in ecology have shown that nestedness is a ubiquitous characteristic of both, biological and economic ecosystems. The dynamics of nestedness, however, have rarely been observed. Here we show that the nestedness of both, the network connecting countries to the products that they export and the network connecting municipalities to the industries that are present in them, remains constant over time. Moreover, we find that the conservation of nestedness is sustained by both, a bias for industries that deviate from the networks{\textquoteright} nestedness to disappear, and a bias for the industries that are missing according to nestedness to appear. This makes the appearance and disappearance of individual industries in each location predictable. The conservation of nestedness in industrial ecosystems, and the predictability implied by it, demonstrates the importance of industrial ecosystems in the long term survival of economic activities.

},
	author = {Sebasti{\'a}n Bustos and Charles Gomez and Hausmann, Ricardo and C{\'e}sar A. Hidalgo}
}
@article {371421,
	title = {The Effect of Fertility Reduction on Economic Growth},
	year = {2012},
	abstract = {We assess quantitatively the effect of exogenous reductions in fertility on output per capita. Our simulation model allows for effects that run through schooling, the size and age structure of the population, capital accumulation, parental time input into child-rearing, and crowding of fixed natural resources. The model is parameterized using a combination of microeconomic estimates, data on demographics and natural resource income in developing countries, and standard components of quantitative macroeconomic theory. We apply the model to examine the effect of a change in fertility from the UN medium-variant to the UN low-variant projection, using Nigerian vital rates as a baseline. For a base case set of parameters, we find that such a change would raise output per capita by 5.6 percent at a horizon of 20 years, and by 11.9 percent at a horizon of 50 years.},
	author = {Quamrul H. Ashraf and Weil, David N. and Joshua Wilde}
}
@article {371481,
	title = {Empirical Confirmation of Creative Destruction from World Trade Data},
	year = {2012},
	abstract = {
	We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite {\textendash} disappearances followed by periods of appearances {\textendash} is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e. creative destruction. We find a tendency that more complex products drive out less complex ones, i.e. progress has a direction. Finally we show that the growth trajectory of a country{\textquoteright}s product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics.

},
	author = {Peter Klimek and Hausmann, Ricardo and Stefan Thurner}
}
@article {371436,
	title = {On Graduation from Fiscal Procyclicality},
	year = {2012},
	abstract = {
	In the past, industrial countries have tended to pursue countercyclical or, at worst, acyclical fiscal policy. In sharp contrast, emerging and developing countries have followed procyclical fiscal policy, thus exacerbating the underlying business cycle. We show that, over the last decade, about a third of the developing world has been able to escape the procyclicality trap and actually become countercyclical. We then focus on the role played by the quality of institutions, which appears to be a key determinant of a country{\textquoteright}s ability to graduate. We show that, even after controlling for the endogeneity of institutions and other determinants of fiscal procyclicality, there is a causal link running from stronger institutions to less procyclical or more countercyclical fiscal policy.

},
	author = {Jeffrey A. Frankel and Carlos A. Vegh and Guillermo Vuletin}
}
@article {371556,
	title = {Long Term Impact of a Cash-Transfers Program on Labor Outcomes of the Rural Youth},
	year = {2012},
	abstract = {
	This paper evaluates if, after ten years of implementation, the conditional cash transfer program Progresa/Oportunidades has had an effect on labor market outcomes among young beneficiaries in rural Mexico. We use a specific module for the young aged 14 to 24 in the 2007 wave of the Rural Households Evaluation Survey and apply a multi-treatment methodology for different time exposition to the program to identify effects on employment probability, wages, migration and intergenerational occupational mobility. Our results show very little evidence of program impacts on employment, wages or inter-generational occupational mobility among the cohort of beneficiaries under study. This suggests that, despite well documented effects on human capital accumulation of the beneficiaries, labor market prospects in the localities under the program remain sparse.

},
	author = {Eduardo Rodr{\'\i}guez-Oreggia and Samuel Freije}
}
@article {371521,
	title = {Mauritius: African Success Story},
	year = {2012},
	abstract = {Mauritius is a top performer among African countries. It developed a manufacturing sector soon after independence and has managed to respond well to new external shocks. What explains this success? This paper draws on the history of the island, the writings of foreign economists, the ideas of locals, and the results of econometric tests. Mauritius has mostly followed good policies. They include: creating a well-managed Export Processing Zone, conducting diplomacy regarding trade preferences, spending on education, avoiding currency overvaluation, and facilitating business. The good policies can in turn be traced back to good institutions. They include: forswearing an army, protecting property rights (particularly non-expropriation of sugar plantations), and creating a parliamentary structure with comprehensive participation (in the form of representation for rural districts and ethnic minorities, the {\textquotedblleft}best loser system,{\textquotedblright} ever-changing coalition governments, and cabinet power-sharing). But from where did the good institutions come? They were chosen around the time of independence in 1968. Why in Mauritius and not elsewhere? Luck?Some fundamental geographic and historical determinants of trade and rule of law help explain why average income is lower in Africa than elsewhere, and trade and rule of law help explain performance within Africa just as they do worldwide. Despite these two econometric findings, the more fundamental determinants are not much help in explaining relative performance within Africa. Fundamental determinants that work worldwide but not within Africa are remoteness, tropics, size and fragmentation. (Access to the sea is the one fundamental geographic determinant of trade and income that is always important.) A case in point is the high level of ethnic diversity in Mauritius, which in many places would make for dysfunctional politics. Here, however, it brings cosmopolitan benefits. The institutions manage to balance the ethnic groups; none is excluded from the system. It is intriguing that the three African countries with the highest governance rankings (Mauritius, Seychelles and Cape Verde) are all islands that had no indigenous population. It helps that everyone came from somewhere else.},
	author = {Frankel, Jeffrey}
}
@article {371526,
	title = {The Natural Resource Curse: A Survey of Diagnoses and Some Prescriptions},
	year = {2012},
	abstract = {
	Countries with oil, mineral or other natural resource wealth, on average, have failed to show better economic performance than those without, often because of undesirable side effects. This is the phenomenon known as the Natural Resource Curse. This paper reviews the literature, classified according to six channels of causation that have been proposed. The possible channels are: (i) long-term trends in world prices, (ii) price volatility, (iii) permanent crowding out of manufacturing, (iv) autocratic/oligarchic institutions, (v) anarchic institutions, and (vi) cyclical Dutch Disease. With the exception of the first channel {\textendash} the long-term trend in commodity prices does not appear to be downward {\textendash} each of the other channels is an important part of the phenomenon. Skeptics have questioned the Natural Resource Curse, pointing to examples of commodity-exporting countries that have done well and arguing that resource exports and booms are not exogenous. The relevant policy question for a country with natural resources is how to make the best of them.

},
	author = {Frankel, Jeffrey}
}
@article {371506,
	title = {Neighbors and the Evolution of the Comparative Advantage of Nations: Evidence of International Knowledge Diffusion?},
	year = {2012},
	abstract = {
	The literature on knowledge diffusion shows that it decays strongly with distance. In this paper we document that the probability that a product is added to a country{\textquoteright}s export basket is, on average, 65\% larger if a neighboring country is a successful exporter of that same product. For existing products, having a neighbor with comparative advantage in them is associated with a growth of exports that is higher by 1.5 percent per annum. While these results could be driven by a common third factor that escapes our controls, they are what would be expected from the localized character of knowledge diffusion.

},
	author = {Dany Bahar and Hausmann, Ricardo and Cesar Hidalgo}
}
@article {371486,
	title = {A Rational Framework for the Understanding of the Arab Revolutions},
	year = {2012},
	abstract = {The paper argues that demise of the autocratic bargain in the Arab world, ushered by the uprisings of 2010-11, has been driven by a split in the ruling class. The bargain authoritarians struck with their societies in the recent decade is best characterized as a repressive regime that relied on a narrow elite base. The paper explores the dynamic factors that have affected this bargain over time, and in particular, the increased autonomy of the middle class, the rise of crony capitalism, the increased popularity of Political Islam among the middle class, and the "indignities" associated with unpopular foreign alliances. The recent political changes are interpreted as the moment when the middle class, traditionally allied with the autocrats, and affected by these latent pull and push factors, preferred to "tip" its support to a transition towards a democratic settlement. The 3-player model I develop is shown to explain the characteristics of the ongoing Arab Spring and of the key future challenges facing the region better than the classical autocratic bargain model.},
	author = {Ishac Diwan}
}
@article {371566,
	title = {Structural Factors and the "War on Drugs" Effects on the Upsurge in Homicides in Mexico},
	year = {2012},
	abstract = {
	Violence has increased all around Mexico in the last years, reflecting an uprise in the rate of homicides, and especially after some federal intervention took place to fight the drug cartels in some states. In this paper we use data at the municipal level to link social and institutional factors with the rates of homicides. We exploit the entrance for federal army interventions in 2007 and 2008 in some states to fight drug cartels. Using different estimation methods, we find that inequality, access to social security and income, as well as local provision of security and law are relevant in explaining homicides. We also find that the army interventions have increased not only drug related homicides, but also general homicides in municipalities under intervention compared with those with no intervention.

},
	author = {Eduardo Rodr{\'\i}guez-Oreggioa and Miguel Flores}
}
@article {371531,
	title = {What Small Countries Can Teach the World},
	year = {2012},
	abstract = {
	The large economies have each, in sequence, offered "models" that once seemed attractive to others but that eventually gave way to disillusionment. Small countries may have some answers. They are often better able to experiment with innovative policies and institutions and some of the results are worthy of emulation. This article gives an array of examples. Some of them come from small advanced countries: New Zealand{\textquoteright}s Inflation Targeting, Estonia{\textquoteright}s flat tax, Switzerland{\textquoteright}s debt brake, Ireland{\textquoteright}s FDI policy, Canada{\textquoteright}s banking structure, Sweden{\textquoteright}s Nordic model, and the Netherlands{\textquoteright} labor market reforms. Some examples come from countries that were considered "developing" 40 years ago, but have since industrialized. Korea stands for education; among Singapore{\textquoteright}s innovative polices were forced saving and traffic congestion pricing; Costa Rica and Mauritius outperformed their respective regions by, among other policies, foreswearing standing armies; and Mexico experimented successfully with the original Conditional Cash Transfers. A final set of examples come from countries that export mineral and agricultural commodities -- historically vulnerable to the "resource curse" -- but that have learned how to avoid the pitfalls: Chile{\textquoteright}s structural budget rules, Mexico{\textquoteright}s oil option hedging, and Botswana{\textquoteright}s "Pula Fund."

},
	author = {Frankel, Jeffrey}
}
@article {371416,
	title = {Who Needs the Nation State?},
	year = {2012},
	abstract = {The nation state has few friends these days. It is roundly viewed as an archaic construct that is at odds with 21st century realities. It has neither much relevance nor much power, analysts say. Increasingly, it is non-governmental organizations, global corporate social responsibility, or global governance on which pundits place their faith to achieve public purpose and social goals. It is common to portray national politicians as the sole beneficiary of the nation state, on which their privileges and lofty status depend.
The assault on the nation state transcends traditional political divisions, and is one of the few things that unite economic liberals and socialists. "How may the economic unity of Europe be guaranteed, while preserving complete freedom of cultural development to the peoples living there?" asked Leon Trotsky in 1934. The answer was to get rid of the nation state: "The solution to this question can be reached ... by completely liberating productive forces from the fetters imposed upon them by the national state."2Trotsky{\textquoteright}s answer sounds surprisingly modern in light of the euro zone{\textquoteright}s current travails. It is one to which most neoclassical economists would subscribe.},
	author = {Rodrik, Dani}
}
@article {1637047,
	title = {Growth and Competitiveness in Kazakhstan: Issues and Priorities in the Areas of Macroeconomic, Industrial, Trade and Institutional Development Policies},
	year = {2011},
	abstract = {
	Kazakhstan has achieved many of its goals and faces enormous opportunities. It has been able to transform itself into a market economy, thus unleashing the productive capacity of its citizens and creating the conditions for the country to benefit from international trade and investment. In addition, it has discovered large quantities of oil reserves that will allow it to sustain a tripling of oil production in the next two decades.



	Under these conditions, the recent performance of the economy has been characterized by rapid growth with declining unemployment. The economy has been propped up by increased fiscal spending and by private investment. Macroeconomic management has been prudent in the sense that inflation has been kept low, the government has accumulated significant fiscal savings in the National Fund and the Central Bank has built up a significant stock of international reserves. The question is how to make this situation last over the medium and long term and how to make the economy resilient to the shocks that may come.



	This report is a collection of policy memos that deal with the choices the government faces going forward in the broad area of macroeconomic policies, including fiscal policy and institutions, monetary and exchange rate arrangements and policies, financial policies, industrial policy, trade policy and broad issues in institutional development.

},
	author = {Hausmann, Ricardo and Akash Deep and Di Tella, Rafael and Frankel, Jeffrey and Robert Lawrence and Rodrik, Dani}
}
@article {504626,
	title = {Building a Better Future for the Dominican Republic},
	year = {2011},
	abstract = {From 2010-2011, a team from the Growth Lab at Harvard{\textquoteright}s Center for International Development collaborated with the Dominican government to develop a strategy to create a highly-productive, internationally competitive economy. With a vision for 2030, this team of scholars, practitioners, and government agencies hopes to revitalize the Dominican economy, promoting inclusive growth and sustainable human development.The faculty team advised on a growth strategy based on diversification and development of the tradable sector. The five-tiered approach focuses on education, exports, fiscal reform, financial architecture, and development along the Haitian border, culminating in overall economic growth, job creation, demographic transitions, and restructured formal sectors.Also included in the overall plan are investment promotion, infrastructure development, active scouting of new and innovative goods and services, maximization of the country{\textquoteright}s tourist potential, improved governance, and a revised tax regime. Specific financial recommendations include encouraging and reorganizing pension fund investment and changing the average savings rate as a benchmark for higher return on those funds.},
	author = {Hausmann, Ricardo and Cesar A. Hidalgo and Juan Jimenez and Robert Lawrence and Eduardo Levy-Yeyati and Charles Sabel and Daniel Schydlowsky}
}
@book {460371,
	title = {The Atlas of Economic Complexity: Mapping Paths to Prosperity},
	year = {2011},
	abstract = {
	Over the past two centuries, mankind has accomplished what used to be unthinkable. When we look back at our long list of achievements, it is easy to focus on the most audacious of them, such as our conquest of the skies and the moon. Our lives, however, have been made easier and more prosperous by a large number of more modest, yet crucially important feats. Think of electric bulbs, telephones, cars, personal computers, antibiotics, TVs, refrigerators, watches and water heaters. Think of the many innovations that benefit us despite our minimal awareness of them, such as advances in port management, electric power distribution, agrochemicals and water purification. This progress was possible because we got smarter. During the past two centuries, the amount of productive knowledge we hold expanded dramatically. This was not, however, an individual phenomenon. It was a collective phenomenon. As individuals we are not much more capable than our ancestors, but as societies we have developed the ability to make all that we have mentioned {\textendash} and much, much more.



	For up-to-date datasets and new visualizations, visit\&nbsp;atlas.cid.harvard.edu.

},
	author = {Hausmann, Ricardo and C{\'e}sar A. Hidalgo and Sebasti{\'a}n Bustos and Michele Coscia and Sarah Chung and Juan Jimenez and Alexander Simoes and Muhammed A. Y{\i}ld{\i}r{\i}m}
}
@book {460361,
	title = {The Globalization Paradox: Democracy and the Future of the World Economy},
	year = {2011},
	publisher = {W. W. Norton \& Company},
	organization = {W. W. Norton \& Company},
	abstract = {Surveying three centuries of economic history, Dani Rodrik argues for a leaner global system that puts national democracies front and center. From the mercantile monopolies of seventeenth-century empires to the modern-day authority of the WTO, IMF, and World Bank, the nations of the world have struggled to effectively harness globalization{\textquoteright}s promise.\&nbsp; The economic narratives that underpinned these eras-the gold standard, the Bretton Woods regime, the "Washington Consensus"-brought great success and great failure.In this eloquent challenge to the reigning wisdom on globalization, Dani Rodrik offers a new narrative, one that embraces an ineluctable tension: we cannot simultaneously pursue democracy, national self-determination, and economic globalization. When the social arrangements of democracies inevitably clash with the international demands of globalization, national priorities should take precedence. Combining history with insight, humor with good-natured critique, Rodrik{\textquoteright}s case for a customizable globalization supported by a light frame of international rules shows the way to a balanced prosperity as we confront today{\textquoteright}s global challenges in trade, finance, and labor markets.},
	url = {https://www.amazon.com/Globalization-Paradox-Democracy-Future-Economy/dp/0393341283},
	author = {Rodrik, Dani}
}
@article {457736,
	title = {The network structure of economic output},
	journal = {Journal of Economic Growth},
	year = {2011},
	abstract = {Much of the analysis of economic growth has focused on the study of aggregate output. Here, we deviate from this tradition and look instead at the structure of output embodied in the network connecting countries to the products that they export. We characterize this network using four structural features: the negative relationship between the diversification of a country and the average ubiquity of its exports, and the non-normal distributions for product ubiquity, country diversification and product co-export. We model the structure of the network by assuming that products require a large number of non-tradable inputs, or capabilities, and that countries differ in the completeness of the set of capabilities they have. We solve the model assuming that the probability that a country has a capability and that a product requires a capability are constant and calibrate it to the data to find that it accounts well for all of the network features except for the heterogeneity in the distribution of country diversification. In the light of the model, this is evidence of a large heterogeneity in the distribution of capabilities across countries. Finally, we show that the model implies that the increase in diversification that is expected from the accumulation of a small number of capabilities is small for countries that have a few of them and large for those with many. This implies that the forces that help drive divergence in product\&nbsp;diversity increase with the complexity of the global economy when capabilities travel poorly.},
	url = {https://link.springer.com/article/10.1007/s10887-011-9071-4},
	author = {Hausmann, Ricardo and C{\'e}sar A. Hidalgo}
}
@article {1617771,
	title = {Marriage, Education, and Assortative Mating in Latin America},
	year = {2010},
	abstract = {
	In this paper we establish six stylized facts related to marriage and work in Latin America and present a simple model to account for them. First, skilled women are less likely to be married than unskilled women. Second, skilled women are less likely to be married than skilled men. Third, married skilled men are more likely to work than unmarried skilled men, but married skilled women are less likely to work than unmarried skilled women. Fourth, Latin American women are much more likely to marry a less skilled husband compared to women in other regions of the world. Five, when a skilled Latin American woman marries down, she is more likely to work than if she marries a more or equally educated man. Six, when a woman marries down, she tends to marry the {\textquotedblleft}better{\textquotedblright} men in that these are men that earn higher wages than those explained by the other observable characteristics. We present a simple game theoretic model that explains these facts with a single assumption: Latin American men, but not women, assign a greater value to having a stay-home wife.



	This research is part of the "Closing the Global Gender Gap: A Call to Action," an initiative sponsored by the Women and Public Policy Program in collaboration with the Center for International Development at Harvard University, with support from ExxonMobil{\textquoteright}s Educating Women and Girls Initiative and the Women{\textquoteright}s Leadership Board of the Harvard Kennedy School.

},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina}
}
@article {1561054,
	title = {Structural Transformation in Ecuador},
	year = {2010},
	abstract = {This paper applies new techniques and metrics to analyze Ecuador{\textquoteright}s past record of and future opportunities for structural transformation. Ecuador{\textquoteright}s export dynamics and the emergence of new export activities have been the historical drivers of the country{\textquoteright}s growth, but recently Ecuador{\textquoteright}s export basket has undergone little structural transformation. The same broad sectors continue to dominate, and the overall sophistication of the export basket has actually declined in recent years. In order to consider why movement to new, more sophisticated export activities has lagged in Ecuador, we examine export connectedness and find that the country is concentrated in a peripheral part of the product space. We quantitatively scan Ecuador{\textquoteright}s efficient frontier and identify new, high-potential export activities that are nearby in the product space. This sector evaluation provides valuable information for the government to prioritize dialogue and interventions, but it is not meant to be a conclusive identification of "winners". Rather, we provide policy guidelines to facilitate the emergence of these and other new export activities, dealing with the sector-specificity of much of what the government must provide to the private sector to succeed while at the same time avoiding the well-known perils of traditional industrial policies.},
	url = {https://www.researchgate.net/publication/228432528_Structural_Transformation_in_Ecuador},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@inbook {504506,
	title = {Diagnosing the Binding Constraints on Economic Growth (Belize)},
	booktitle = {Towards a Sustainable and Efficient State: The Development Agenda of Belize},
	year = {2010},
	pages = {11-35},
	publisher = {Inter-American Development Bank},
	organization = {Inter-American Development Bank},
	address = {Washington, DC},
	abstract = {
	Belize{\textquoteright}s long-term growth performance has been comparatively good. It is not clear what comparator group is relevant, given Belize{\textquoteright}s status as both a Caribbean and a Central American country. Compared with its Central American counterparts, Belize has been a growth star. In 1960, it was the second-poorest country in the region; now it is among the {\textquotedblleft}top tier{\textquotedblright} countries, with gross domestic product (GDP) per capita (Figure 1.1) near that of Costa Rica and Panama. Moreover, much of this growth was achieved after independence. Among its Caribbean peers, however, Belize{\textquoteright}s performance has been average, and it has not been able to close the gap with the better-performing economies in the region. And since 2004, economic growth has been sluggish, barely above the rate of population growth, implying that reactivating economic growth is a central development challenge for the country.

},
	url = {http://publications.iadb.org/handle/11319/385?locale-attribute=en},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@inbook {504461,
	title = {Export Diversification in Algeria},
	booktitle = {Trade Competitiveness of the Middle East and North Africa},
	year = {2010},
	pages = {63-101},
	publisher = {The World Bank},
	organization = {The World Bank},
	address = {Washington, DC},
	abstract = {
	This chapter applies new methodologies to examine the history of and future opportunities for export diversification in Algeria. The first section examines Algeria{\textquoteright}s productive structure, which is highly concentrated in the hydrocarbons sector. It shows that this pattern of specialization is inconsistent with the country{\textquoteright}s endowment of hydrocarbon resources. The lack of export diversification is suggestive of an inefficient distortion, reversal of which should be a clear policy priority.



	The second section reviews some of the traditional explanations for a lack of export diversification in an oil-exporting country and shows that these explanations do not seem to hold for Algeria. It offers an alternative explanation, based not on macroeconomic volatility or real exchange rate appreciation but on the specificity of productive capabilities in the oil sector and their substitutability to other activities. This explanation underlies the notion of a {\textquotedblleft}product space,{\textquotedblright} in which structural transformation occurs.



	The third section introduces a new methodology to export diversification in Algeria, which is shown to be specialized in a highly peripheral part of the product space. Even activities that compose the non-oil export basket are highly peripheral in the product space, which helps explain the severe lack of export diversification.



	The fourth section applies product space data to Algeria{\textquoteright}s industrial strategy, using the methodology to identify high-potential export sectors. This data-driven approach has the benefit of systematically scanning the entire set of potential export goods using an empirically validated methodology. It complements other more qualitative and contextual approaches. This section uses the same methodology to review the sectors already identified by the Algerian government in the new industrial policy.



	The last section discusses the policy implications of this analysis. A wide variety of methodologies can be used to generate lists of high potential export sectors; more difficult is determining what to do with such lists. The section offers a few specific policy recommendations and discusses some best practices. But the fact that most required public goods and constraints to investment are sector specific means that recommendations\&nbsp;cannot be made at the macro level.

},
	author = {Hausmann, Ricardo and Klinger, Bailey and Jos{\'e} R. L{\'o}pez-C{\'a}lix}
}
@article {457751,
	title = {Country diversification, product ubiquity, and economic divergence},
	year = {2010},
	abstract = {
	Countries differ markedly in the diversification of their exports. Products differ in the number of countries that export them, which we define as their ubiquity. We document a new stylized fact in the global pattern of exports: there is a systematic relationship between the diversification of a country{\textquoteright}s exports and the ubiquity of its products. We argue that this fact is not implied by current theories of international trade and show that it is not a trivial consequence of the heterogeneity in the level of diversification of countries or of the heterogeneity in the ubiquity of products. We account for this stylized fact by constructing a simple model that assumes that each product requires a potentially large number of non-tradable inputs, which we call capabilities, and that a country can only make the products for which it has all the requisite capabilities. Products differ in the number and specific nature of the capabilities they require, as countries differ in the number/nature of capabilities they have. Products that require more capabilities will be accessible to fewer countries (i.e., will be less ubiquitous), while countries that have more capabilities will have what is required to make more products (i.e., will be more diversified). Our model implies that the return to the accumulation of new capabilities increases exponentially with the number of capabilities already available in a country. Moreover, we find that the convexity of the increase in diversification associated with the accumulation of a new capability increases when either the total number of capabilities that exist in the world increases or the average complexity of products, defined as the number of capabilities products require, increases. This convexity defines what we term as aquiescence trap, or a\&nbsp;trap of economic stasis: countries with few capabilities will have negligible or no return to the accumulation of more capabilities, while at the same time countries with many capabilities will experience large returns - in terms of increased diversification - to the accumulation of additional capabilities. We calibrate the model to three different sets of empirical data and show that the derived functional forms reproduce the empirically observed distributions of product ubiquity, the relationship between the diversification of countries and the average ubiquity of the products they export, and the distribution of the probability that two products are co-exported. This calibration suggests that the global economy is composed of a relatively large number of capabilities {\textendash} between 23 and 80, depending on the level of disaggregation of the data {\textendash} and that products require on average a relatively large fraction of these capabilities in order to be produced. The conclusion of this calibration is that the world exists in a regime where the quiescence trap is strong.

},
	author = {Hausmann, Ricardo and C{\'e}sar A. Hidalgo}
}
@article {457766,
	title = {Development Policy and Development Economics: An Introduction},
	journal = {Handbook of Development Economics},
	volume = {5},
	year = {2010},
	pages = {4039-5061},
	abstract = {
Anyone who undertakes to produce a volume of surveys in economic development must confront the question: Does the world really need another one? The field changes over time and, one hopes, knowledge accumulates. So, one motive is the desire to cover the more recent advances. And indeed, economic development has been one of the most dynamic and innovative fields within economics in recent years. While one primary goal is to inform policy makers, it also hoped that the volume will assist scholars in designing research agendas that are informed by policy questions, in particular, by the gaps in knowledge that would speak to major policy issues. The development field has always been one in which the worlds of research and practice are in close relationship with each other and move in tandem. The large number of PhD economists who work in international organizations such as the World Bank and the influence of academia among developing-country officialdom ensure that ideas emanating from the ivory tower often find quick application. But equally important, in principle, is the reverse feedback{\textemdash}the need to tilt researchers{\textquoteright} attention on the questions that are, or should be, on the policy agenda. The organization of the present volume around policy issues is designed to make a contribution toward both of these goals.

},
	url = {http://www.sciencedirect.com/science/handbooks/15734471},
	author = {Rodrik, Dani and Mark R. Rosenzweig}
}
@article {457761,
	title = {Diagnostics before Prescription},
	journal = {Journal of Economic Perspectives},
	volume = {24},
	number = {3},
	year = {2010},
	pages = {33-44},
	abstract = {Development economists should stop acting as categorical advocates (or detractors) for specific approaches to development. They should instead be diagnosticians, helping decisionmakers choose the right model (and remedy) for their specific realities, among many contending models (and remedies). In this spirit, Ricardo Hausmann, Andres Velasco, and I have developed a "growth diagnostics" framework that sketches a systematic process for identifying binding constraints and prioritizing policy reforms in multilateral agencies and bilateral donors. Growth diagnostics is based on the idea that not all constraints bind equally and that a sensible and practical strategy consists of identifying the most serious constraint(s) at work. The practitioner works with a decision tree to do this. The second step in growth diagnostics is to identify remedies for relaxing the constraint that are appropriate to the context and take cognizance of potential second-best complications. Successful countries are those that have implemented these two steps in an ongoing manner: identify sequentially the most binding constraints and remove them with locally suited remedies. Diagnostics requires pragmatism and eclecticism, in the use of both theory and evidence. It has no room for dogmatism, imported blueprints, or empirical purism.},
	author = {Rodrik, Dani}
}
@article {457756,
	title = {Redemption or Abstinence? Original Sin, Currency Mismatches, and Counter-Cyclical Policies in the New Millenium},
	year = {2010},
	abstract = {
	This paper updates our previous work on the level and evolution of original sin. It shows that while the number of countries that issue local-currency debt in international markets has increased in the past decade, this improvement has been quite modest. Although we find that countries have been borrowing at home, thanks to deepening domestic markets, we document that foreign participation in these markets is more limited than what is usually assumed. The paper shows that the recent decline of currency mismatches and the consequent ability to conduct countercyclical macroeconomic policies is due to lower net debt (abstinence) and not to redemption from original sin. We conclude that original sin continues to make financial globalization unattractive and developing countries have opted for abstinence because foreign currency debt is too risky. The promised paradise of financial globalization will need to wait for redemption from original sin.\&nbsp;

},
	author = {Hausmann, Ricardo and Ugo Panizza}
}
@article {1561059,
	title = {Policies for Achieving Structural Transformation in the Caribbean},
	year = {2009},
	abstract = {
	Countries seldom grow rich by producing the same things more productively. They usually change what they produce in the process of development. Structural transformation is the process whereby countries move to new economic activities that are more productive and thus are able to pay higher wages. This process is very important for growth: countries that are able to upgrade their exports by developing new economic activities tend to grow faster (Hausmann and Rodrik, 2003; Hausmann, Hwang, and Rodrik, 2006).



	The purpose of this paper is to apply new methodologies to analyze the history of and future opportunities for structural transformation in the Caribbean. We first look at the composition of exports from the Caribbean, and show that the region is specialized in relatively unsophisticated, --poor-country{\textbardbl} export products, and this is not simply a consequence of their small size or specialization in tourism and financial services.



	We then review the concept of the --product space{\textbardbl} and determine where the Caribbean countries are specialized within this space. The results show that generally these countries export peripheral products that are intensive in capabilities with few alternative uses. In addition, we consider what effects regional integration would have on this opportunity set and show that future opportunities for structural transformation are much higher for the Caribbean Community (CARICOM) as a perfectly integrated zone{\textemdash}higher than for any of its members on their own.



	The final section discusses the policy implications of these results. We show that for almost all countries in the Caribbean there is a need to move to new export activities. Some countries in the region have a set of nearby activities they could exploit, including in the services sector, which suggests a parsimonious approach to promoting new activities is appropriate. This approach involves the government better orienting itself to learn what emerging sectors need in the way of publically provided inputs. But for many countries in the region, there are few nearby activities, suggesting a more proactive search process is necessary. In the appendix we apply the product space data to this search for nearby and more distant export activities for Belize and Jamaica. However, such data is merely a starting point for what must be a continuous process of high-bandwidth dialogue with the private sector to learn what is needed for new activities to emerge. We provide general design guidelines for such a dialogue, both for nearby and more distant activities, and we outline some specific initiatives as examples.

},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@report {1489286,
	title = {The Dynamics of the Gender Gap: How do Countries rank in terms of making Marriage and Motherhood compatible with Work?},
	year = {2009},
	institution = {World Economic Forum},
	address = {Geneva},
	url = {http://www3.weforum.org/docs/WEF_GenderGap_Report_2009.pdf},
	author = {Hausmann, Ricardo and Ganguli, Ina and Viarengo, Martina}
}
@article {457791,
	title = {The Building Blocks of Economic Complexity},
	journal = {Proceedings of the National Academy of Sciences of the United States of America},
	volume = {106},
	number = {26},
	year = {2009},
	pages = {10570-10575},
	abstract = {
	For Adam Smith, wealth was related to the division of labor. As people and firms specialize in different activities, economic effi- ciency increases, suggesting that development is associated with an increase in the number of individual activities and with the complexity that emerges from the interactions between them. Here we develop a view of economic growth and development that gives a central role to the complexity of a country{\textquoteright}s economy by interpreting trade data as a bipartite network in which countries are connected to the products they export, and show that it is possible to quantify the complexity of a country{\textquoteright}s economy by characterizing the structure of this network. Furthermore, we show that the measures of complexity we derive are correlated with a country{\textquoteright}s level of income, and that deviations from this relationship are predictive of future growth. This suggests that countries tend to converge to the level of income dictated by the complexity of their productive structures, indicating that development efforts should focus on generating the conditions that would allow complexity to emerge to generate sustained growth and prosperity.

},
	author = {C{\'e}sar A. Hidalgo and Hausmann, Ricardo}
}
@report {457781,
	title = {The Global Gender Gap Report 2009},
	year = {2009},
	institution = {World Economic Forum},
	abstract = {
	Over the last year, the world has seen the biggest recession in almost a century. It is clear that recovery will require, among other things, the best of talent, ideas and innovation. It is therefore more important now than ever before for countries and companies to pay heed to one of the fundamental cornerstones of economic growth available to them{\textemdash}the skills and talent of their female human resource pool.As consumers, voters, employees and employers, women will be integral to global economic recovery. However, it is not only the financial and economic system that is in need of rethinking, redesigning and rebuilding. Global challenges such as climate change, food security, conflict, education and health require our immediate, collective efforts to find solutions and will, in fact, be intimately linked to our long-term global economic recovery. Girls and women make up one half of the world{\textquoteright}s population{\textemdash}without their engagement, empowerment and contribution, we cannot hope to effectively meet these challenges nor achieve rapid economic recovery.



	And yet, there is still much work to be done in education, health, the workplace, legislation and politics before women around the globe enjoy the same opportunities as men.There are still millions of {\textquotedblleft}missing{\textquotedblright} women each year because of the preference for sons in some parts of the world.There are too many female infants who do not receive adequate access to healthcare because of the lower value placed on girls, adding to the global burden of infant mortality. Girls are still missing out on primary and secondary education in far greater numbers than boys, thus depriving entire families, communities and economies of the proven and positive multiplier effects generated by girls{\textquoteright} education and instead aggravating poverty, the spread of HIV/AIDS, and maternal and infant mortality. In those countries where women do indeed receive the benefits of health and education, far too many are then unable to contribute fully and productively to the economy because of barriers to their entry into the workforce or barriers to accessing positions of leadership. Finally, women still remain vastly under-represented in political leadership and decision-making.The combined impact of these gaps entails colossal losses to the global society and economy.



	Measuring the size of the problem is a prerequisite for identifying the best solutions.Through the Global Gender Gap Reports, for the past four years, the World Economic Forum has been quantifying the magnitude of genderbased disparities and tracking their progress over time. By providing a comprehensive framework for benchmarking global gender gaps, the Report reveals those countries that are role models in dividing resources equitably between women and men, regardless of their level of resources. The World Economic Forum places a strong emphasis on a multi-stakeholder approach in order to engage leaders to design the most effective measures for tackling global challenges. In 2008, we launched our Global Gender Parity Group and Regional Gender Parity Groups in Latin America, the Middle East,Africa and Asia.To date, these multi-stakeholder communities of highly influential leaders{\textemdash}50\% women and 50\% men{\textemdash}from business, politics, academia, media and civil society have jointly identified the biggest gaps in each region, based in part on the findings of this Report, and have collectively committed to strategies to improve the use of female talent. In addition, our Global Agenda Council on the Gender Gap, an expert council, is using the findings of this Report as one of the inputs for developing proposals to address gaps in international cooperation towards gender equality. Each of the individuals and organizations represented in these communities work collectively towards empowering women, developing globally replicable frameworks and bringing the world ever closer to achieving gender parity.

},
	author = {Hausmann, Ricardo and Laura D. Tyson and Saadia Zahidi}
}
@report {457771,
	title = {The Mexico Competitiveness Report 2009},
	year = {2009},
	institution = {World Economic Forum},
	abstract = {
	The past 20 years have been a period of important reforms in Mexico. Since the late 1980s, the country has undergone an impressive process of liberalization, opening of the economy, and macroeconomic stabilization. Extreme vulnerability to external shocks, double-digit inflation, and current account and fiscal deficits seem to have been overcome. However, a number of weaknesses continue to drag the country{\textquoteright}s productivity and hence its potential for sustained economic growth and the well-being of its citizens. In spite of a very benign external environment in the period 2003{\textendash}07, Mexico{\textquoteright}s growth rates have been disappointing, and the challenges facing the country have become even greater in the context of the current major economic and financial crisis {\textemdash} one of the most serious in decades {\textemdash} affecting the United States and the rest of the world. The Mexico Competitiveness Report 2009 aims at providing Mexico{\textquoteright}s policymakers, business leaders, and all relevant stakeholders with a unique tool that identifies the country{\textquoteright}s main competitiveness flaws and strengths, together with an in-depth analysis of areas that are key to the country{\textquoteright}s potential for long-term growth. In doing so, the Report aims to support the country{\textquoteright}s reform process and contribute to the definition of a national competitiveness agenda of the priority issues that need to be tackled for Mexico to boost its competitiveness in the face of the present daunting economic outlook. The Report is organized into three thematic parts. Part 1 assesses the current state of Mexico{\textquoteright}s competitiveness and its potential for sustained growth using the broad methodological framework offered by the Global Competitiveness Index (GCI) 2008{\textendash}2009. Part 2 features contributions from a number of experts providing additional insights and diagnostics related to particular aspects of the competitiveness challenges faced by the country. Part 3 includes detailed profiles for Mexico and 10 selected countries and offers a comprehensive competitiveness snapshot for each of these countries.

},
	author = {Hausmann, Ricardo and Emilio Lozoya Austin and Irene Mia}
}
@article {443411,
	title = {The Building Blocks of Economic Complexity},
	year = {2009},
	abstract = {
	For Adam Smith, wealth was related to the division of labor. As people and firms specialize in different activities, economic efficiency increases, suggesting that development is associated with an increase in the number of individual activities and with the complexity that emerges from the interactions between them. Here we develop a view of economic growth and development that gives a central role to the complexity of a country{\textquoteright}s economy by interpreting trade data as a bipartite network in which countries are connected to the products they export, and show that it is possible to quantify the complexity of a country{\textquoteright}s economy by characterizing the structure of this network. Furthermore, we show that the measures of complexity we derive are correlated with a country{\textquoteright}s level of income, and that deviations from this relationship are predictive of future growth. This suggests that countries tend to converge to the level of income dictated by the complexity of their productive structures, indicating that development efforts should focus on generating the conditions that would allow complexity to emerge in order to generate sustained growth and prosperity.

},
	author = {C{\'e}sar A. Hidalgo and Hausmann, Ricardo}
}
@article {1611979,
	title = {The Growing Current Account Surpluses in East Asia: The Effect of Dark Matter Assets},
	journal = {International Economic Journal},
	volume = {22},
	number = {2},
	year = {2008},
	pages = {141-161},
	abstract = {In a series of papers we have developed the notion that net foreign assets could be better approximated by capitalizing the net investment income line of the balance of payments statistics. Hidden assets or changes in financial costs may change the net return of net foreign assets even when the valuation of assets remains unchanged. By capitalizing the net investment income a more realistic picture emerges on the true burden or return of net foreign assets. This paper estimates external positions for East Asian economies using this methodology and compares the results with that of official accounts. We find that, until the late 1990s, net investment income increased relatively little, signaling that net foreign assets had not grown as suggested by the large current account surpluses of these countries. This is consistent with the fact that the region had attracted large amounts of foreign direct investment, for which the transfer of technology and knowledge are not accurately captured by the valuation of the foreign asset position. Since 2002, however, the trend has reversed, indicating much larger surpluses than officially registered. We discuss individual country cases.},
	url = {https://www.tandfonline.com/doi/abs/10.1080/10168730802079581?journalCode=riej20},
	author = {Hausmann, Ricardo and Sturzenegger, Federico and Maya Horii}
}
@article {1611977,
	title = {A Network View of Economic Development},
	journal = {Developing Alternatives},
	volume = {12},
	number = {1},
	year = {2008},
	pages = {5-10},
	abstract = {Does the type of product a country exports matter for subsequent economic performance? To take an example from the 19th-century economist David Ricardo, does it matter if Britain specializes in cloth and Portugal in wine for the subsequent development of either country? The seminal texts of development economics held that it does matter, suggesting that industrialization creates externalities that lead to accelerated growth (Rosenstein-Rodan 1943; Hirschman 1958; Matsuyama 1992). Yet, lacking formal models, mainstream economic theory has made little of these ideas. Instead, current dominant theories use two approaches to explain countries{\textquoteright} patterns of specialization.},
	url = {https://www.researchgate.net/publication/313677958_A_network_view_of_economic_development},
	author = {Hausmann, Ricardo and Cesar A. Hidalgo}
}
@report {1535197,
	title = {Structural Transformation in Pakistan},
	year = {2008},
	institution = {Growth Lab at Harvard{\textquoteright}s Center for International Development},
	abstract = {Structural transformation is the process by which countries change what they produce and move from low-productivity, low-wage activities to high-productivity, high-wage activities. The purpose of this report is to use emerging methodologies to analyze Pakistan{\textquoteright}s history of and opportunities for structural transformation, in an effort to better understand past economic performance and accelerate future economic growth. Part 1 looks at the composition of Pakistan{\textquoteright}s export basket and establishes that the country is specialized in relatively unsophisticated export activities that are typical of poorer countries. Compared to other countries in Asia, Pakistan has not been moving to new and better export activities, and consequently has fallen behind. We show that this is in part because the actual products that Pakistan currently produces are intensive in capabilities with few alternative uses. Pakistan is specialized in a relatively peripheral part of the product space, and has not explored the productive possibilities as actively as its comparators. Given this record, an important priority in the future is to accelerate structural transformation. Pakistan{\textquoteright}s current orientation in the product space suggests that such acceleration would require a mix of facilitating movements to nearby activities, as well as encouraging more strategic jumps to new areas of the product space. Part 2 uses the data and methodologies of Part 1 to identify what those nearby and more distant activities might be, while Part 3 discusses appropriate policies that follow from these results and promote structural transformation, without suffering common failures of past industrial policies. The key message is that the government of Pakistan must actively learn the sector-specific constraints to structural transformation and overcome them in order to accelerate future economic growth.},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {508791,
	title = {Final Recommendations of the International Panel on ASGISA (South Africa)},
	year = {2008},
	author = {Hausmann, Ricardo}
}
@article {504596,
	title = {In Search of the Chains that Hold Brazil Back},
	year = {2008},
	abstract = {This paper performs a Growth Diagnotic for Brazil. It shows that many aspects of the Brazilian economy have been improving including the macro picture, educational progress and the external front. Moreover, Brazil has many productive possibilities and high-return investments. Yet growth is hampered because of a relatively old-fashioned problem that has been solved in many other countries in the region: creating a financially viable st ate that does not over-borrow, over-tax or under-invest. We show that domestic saving is the binding constraint on growth and that it has a fiscal cause. Although things are trending in the right direction, the challenge is to exploit the current good times to create the fiscal basis for a sustained growth acceleration.},
	author = {Hausmann, Ricardo}
}
@inbook {457796,
	title = {Growth Diagnostics},
	booktitle = {The Washington Consensus Reconsidered: Towards a New Global Governance},
	year = {2008},
	pages = {324-355},
	publisher = {Oxford University Press},
	organization = {Oxford University Press},
	abstract = {
	Most well-trained economists would agree that the standard policy reforms included in the Washington Consensus have the potential to be growth promoting. What the experience of the last 15 years has shown, however, is that the impact of these reforms is heavily dependent on circumstances. Policies that work wonders in some places may have weak, unintended, or negative effects in others.1 We argue in this chapter that this calls for an approach to reform that is much more contingent on the economic environment, but one that also avoids an {\textquoteleft}anything goes{\textquoteright} attitude of nihilism. We show it is possible to develop a unified framework for analyzing and formulating growth strategies that is both operational and based on solid economic reasoning. The key step is to develop a better understanding of how the binding constraints on economic activity differ from setting to setting. This understanding can then be used to derive policy priorities accordingly, in a way that uses efficiently the scarce political capital of reformers.

},
	author = {Hausmann, Ricardo and Rodrik, Dani and Andres Velasco}
}
@article {443416,
	title = {Doing Growth Diagnostics in Practice: A {\textquoteright}Mindbook{\textquoteright}},
	year = {2008},
	abstract = {
	This paper systematizes the implementation of the Growth Diagnostics framework. It aims to give the meta-steps that a persuasive growth diagnosis should have, and elaborates on the strategies and methods that may be used. Rather than a step-by-step instruction manual or handbook, this paper is meant to be a {\textquoteleft}mindbook{\textquoteright}, suggesting how to think about the problem of identifying a country{\textquoteright}s constraints to growth.

},
	author = {Hausmann, Ricardo and Klinger, Bailey and Wagner, Rodrigo}
}
@article {443461,
	title = {Growth Diagnostics in Peru},
	year = {2008},
	abstract = {
	This paper presents a growth diagnostic of Peru. It notes that although Peru has recently enjoyed high rates of economic growth, this growth is actually a recovery from a significant and sustained growth collapse that began in the 1970s. The growth collapse was caused by a decline in export earnings due to the fall in international prices and an inadequate investment regime in export activities that led to a fall in market share. This situation led to collateral damage in the form of a balance of payments, fiscal and financial crisis, accompanied by hyperinflation and violence, but these aspects were corrected in the 1990s. However, the transformation of the export sector has been surprisingly small: the same activities that declined {\textendash} mining and energy {\textendash} are the ones that are leading the current recovery in exports to levels that in real per capita terms are similar to those achieved 30 years ago. We argue that the lack of structural transformation is associated with Peru{\textquoteright}s position in a poorly connected part of the product space and this accentuates coordination failures in the movement to new activities. In addition, Peru{\textquoteright}s current export package, is very capital intensive and generates few jobs, especially in urban areas where the bulk of the labor force is now located. This limits the welfare benefits of the current growth path. The key policy message is that the public sector must act to encourage the development of new export activities that better utilize the human resources of the country. This involves action on the macro front to achieve a more competitive real exchange rate, improvements in the capacity to solve coordination failures in the provision of specific public sector inputs and programs to stimulate investment in new tradable activities.

},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {443466,
	title = {The Other Hand: High Bandwidth Development Policy},
	year = {2008},
	abstract = {
	Much of development policy has been based on the search for a short to do list that would get countries moving. In this paper I argue that economic activity requires a large and highly interacting set of public policies and services, which constitute inputs into the production process. This is reflected in the presence, in all countries, of hundreds of thousands of pages of legislation and hundreds of public agencies. Finding out what is the right mix of the public inputs, and more importantly, what is a valuable change from the current provision is as complex as determining what is the right mix of private provision of goods. In the latter case, economists agree that this process cannot be achieved through central planning and that the invisible hand of the market is the right approach, because it allows decisions to be made in a more decentralized manner with more information. I argue that a similar solution is required to deal with the complexity of the public policy mix.

},
	author = {Hausmann, Ricardo}
}
@article {1611978,
	title = {South Africa{\textquoteright}s Export Predicament},
	journal = {Economics of Transition},
	volume = {16},
	number = {4},
	year = {2008},
	pages = {609-637},
	url = {https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1468-0351.2008.00337.x},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1561267,
	title = {Reconfiguring Industrial Policy: A Framework with an Application to South Africa},
	year = {2008},
	abstract = {The main purpose of industrial policy is to speed up the process of structural change towards higher productivity activities. This paper builds on our earlier writings to present an overall design for the conduct of industrial policy in a low- to middle-income country. It is stimulated by the specific problems faced by South Africa and by our discussions with business and government officials in that country. We present specific recommendations for the South African government in the penultimate section of the paper.},
	author = {Hausmann, Ricardo and Rodrik, Dani and Charles Sabel}
}
@article {1561046,
	title = {Examining Beneficiation},
	year = {2008},
	abstract = {Beneficiation, moving downstream, and promoting greater value added in natural resources are very common policy initiatives to stimulate new export sectors in developing countries, largely based on the premise that this is a natural and logical path for structural transformation. But upon closer examination, we find that very few countries that export raw materials also export their processed forms, or transition to greater processing. The quantitative analysis finds that broad factor intensities do a much better job of identifying patterns of production and structural transformation than forward linkages, which have an insignificant impact despite the fact that our data is biased against finding significant effects of factor intensities and towards finding significant effects of forward linkages. Moreover, the explanatory power of forward linkages is even smaller in sectors with high transport costs, and in sectors classified as primary products or raw materials, which are the most common targets of such policies. Finally, the results are the same even when only considering developed countries, meaning that colonial legacy inhibiting transitions to natural resource processing are not to blame. These results suggest that policies to promote greater downstream processing as an export promotion policy are misguided. Structural transformation favors sectors with similar technological requirements, factor intensities, and other requisite capabilities, not products connected in production chains. There is no reason for countries like South Africa to focus attention on beneficiation at the expense of policies that would allow other export sectors to emerge. This makes no sense conceptually, and is completely inconsistent with international experience. Quite simply, beneficiation is a bad policy paradigm.},
	author = {Hausmann, Ricardo and Klinger, Bailey and Robert Lawrence}
}
@article {1561039,
	title = {Achieving Export-Led Growth in Colombia},
	year = {2008},
	abstract = {The purpose of this paper is to analyze Colombia{\textquoteright}s experiences with and opportunities for export led growth. We first review Colombia{\textquoteright}s growth and export performance over the past 30 years and find that the country is indeed facing an export challenge. We then go on to develop new metrics and apply them to Colombia{\textquoteright}s export challenge. First, we consider the opportunities for upgrading quality within existing exports, and find that Colombia has very little opportunity for growth in this dimension. Second, we consider the level of sophistication of the current export basket, and find that it is low and commensurate with the lack of export dynamism. Although not a significant drag on growth, the current export basket will not be sufficient to fuel future output growth. Finally, we develop the concept distances between products, open forest, and the option value of exports to examine the possibility that Colombia{\textquoteright}s current structure of production is itself a barrier to future structural transformation. While improvements in the export package have been slow in the past, this evidence suggests that Colombia does now enjoy more options for future structural transformation. As there are attractive options for structural transformation nearby, a parsimonious approach to industrial strategy, rather than a risky strategic bet to move to a new part of the product space, seems appropriate. In order to inform such a strategy, we use the metrics developed in the diagnostic to evaluate new export activities in terms of their proximity to current activities, their sophistication, and their strategic value. We identify the sectors representing the best tradeoffs between these aims for Colombia as a whole, as well as its regions. We also devote separate attention to the topic of Agricultural exports, and to exports of services. Finally, we use these metrics to analyze the list of {\textquoteleft}high-potential{\textquoteright} sectors in the United States, developed by another firm, as well as the sectors prioritized in Colombia{\textquoteright}s Agenda Interna. These external lists of high-potential sectors are found to be sensible, but could be further rationalized using these metrics. This identification of nearby, high-potential, and strategically valuable sectors is not meant to be a definitive list for targeted subsidies and {\textquoteleft}picking winners{\textquoteright}. Rather, it provides a robust data-driven approach to inform the next steps in achieving export-led growth in Colombia: which private sector actors should be consulted first? What sector-specific reforms should be stressed? How should public spending on infrastructure and training, which are also sector-specific, be prioritized? What foreign firms should be targeted by FDI promotion agencies? These decisions can be informed by our analysis and the accompanying data.},
	url = {https://dash.harvard.edu/handle/1/37366194},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1611985,
	title = {The Valuation of Hidden Assets in Foreign Transactions: Why {\textquoteright}Dark Matter{\textquoteright} Matters},
	journal = {Business Economics},
	volume = {42},
	number = {1},
	year = {2007},
	pages = {28-34},
	abstract = {This paper clarifies how the valuation of hidden assets{\textemdash}what we call {\textquotedblleft}dark matter{\textquotedblright}{\textemdash}changes our assessment of the U.S. external imbalance. Dark matter assets are defined as the capitalized value of the return privilege obtained by U.S. assets. Because this return privilege has been steady over recent decades, it is likely to persist in the future or even to increase, as it becomes leveraged by an increasingly globalized world. Once this is included in future projections of U.S. current accounts, the U.S. external position looks much more balanced than depicted in official statistics.},
	url = {https://www.researchgate.net/publication/46525713_The_Valuation_of_Hidden_Assets_in_Foreign_Transactions_Why_Dark_Matter_Matters},
	author = {Hausmann, Ricardo and Sturzenegger, Federico}
}
@article {1611984,
	title = {What You Export Matters},
	journal = {Journal of Economic Growth},
	volume = {12},
	number = {1},
	year = {2007},
	pages = {1-25},
	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 {\textquotedblleft}income level of a country{\textquoteright}s exports,{\textquotedblright} document its properties, and show that it predicts subsequent economic growth.},
	url = {https://link.springer.com/article/10.1007/s10887-006-9009-4},
	author = {Hausmann, Ricardo and Hwang, Jason and Rodrik, Dani}
}
@article {1611982,
	title = {The Product Space Conditions the Development of Nations},
	journal = {Science},
	volume = {317},
	number = {5837},
	year = {2007},
	pages = {482-487},
	abstract = {Economies grow by upgrading the products they produce and export. The technology, capital, institutions, and skills needed to make newer products are more easily adapted from some products than from others. Here, we study this network of relatedness between products, or {\textquotedblleft}product space,{\textquotedblright} finding that more-sophisticated products are located in a densely connected core whereas less-sophisticated products occupy a less-connected periphery. Empirically, countries move through the product space by developing goods close to those they currently produce. Most countries can reach the core only by traversing empirically infrequent distances, which may help explain why poor countries have trouble developing more competitive exports and fail to converge to the income levels of rich countries.},
	url = {https://www.science.org/doi/10.1126/science.1144581},
	author = {Cesar A. Hidalgo and Klinger, Bailey and A. Barabasi and Hausmann, Ricardo}
}
@article {1611981,
	title = {The Missing Dark Matter in the Wealth of Nations and Its Implications for Global Imbalances},
	journal = {Economic Policy},
	volume = {22},
	number = {51},
	year = {2007},
	pages = {470{\textendash}518},
	abstract = {Current account statistics may not be good indicators of the evolution of a country{\textquoteright}s net foreign assets and of its external position{\textquoteright}s sustainability. The value of existing assets may vary independently of current account flows, so-called {\textquoteleft}return privileges{\textquoteright} may allow some countries to obtain abnormal returns, and mismeasurement of FDI, unreported trade of insurance or liquidity services, and debt relief may also play a role. We analyse the relevant evidence in a large set of countries and periods, and examine measures of net foreign assets obtained by capitalizing the net investment income and then estimating the current account from the changes in this stock of foreign assets. We call dark matter the difference between our measure of net foreign assets and that measured by official statistics. We find it to be important for many countries, analyse its relationship with theoretically relevant factors, and note that the resulting perspective tends to make global net asset positions appear relatively stable.},
	url = {https://academic.oup.com/economicpolicy/article-abstract/22/51/470/2918745?redirectedFrom=fulltext},
	author = {Hausmann, Ricardo and Sturzenegger, Federico}
}
@article {1561060,
	title = {Uncertainty in the Search for New Exports},
	year = {2007},
	abstract = {This paper explores the role that uncertainty plays in the emergence of new products or services for export in developing countries. Using a comparative case study method, I explore the degree to which those entrepreneurs who discovered new export activities faced uncertainty, and what the nature of this uncertainty was. I then document how this uncertainty, when present, was resolved, and how this affected subsequent diffusion of the newly discovered activity. The cases suggest two important dimensions of uncertainty in the emergence of new export activities: productivity characteristics and demand characteristics. A new activity could feature one, both, or neither types of uncertainty. The reasons for lower inherent uncertainty in these cases suggest a new theory of product similarity that is heterogeneous, multi-dimensional, and operating at a highly disaggregated level. Furthermore, the degree of uncertainty has implications for the expected {\textquoteleft}triggers{\textquoteright} of discovery, and these are born out in the cases. Finally, when uncertainty was present, its resolution often provided significant benefits to subsequent entrants, and the manner in which high uncertainty was overcome suggests potential avenues for policy.},
	author = {Klinger, Bailey}
}
@booklet {1561057,
	title = {Growth Diagnostic: Belize},
	year = {2007},
	abstract = {
	Belize{\textquoteright}s economic history shows marked periods of growth accelerations and recessions. There have been two such expansions and collapses in the past two decades, with disturbingly similar features. While not always initiated by public spending, these booms quickly became public-investment led, until ballooning budget, trade, and current account deficits and the resulting shrinking reserves and growing debt required home-grown adjustment programs. The huge cuts in public investment and sharp increases in reserve requirements created marked recessions. In addition, the second acceleration happened after a significant collapse in private savings, and ended up creating a huge debt overhang which has eliminated public savings. As a consequence, Belize is a country with a low savings, little access to international finance, and an extremely high domestic cost of finance. Access to finance is the binding constraint to economic growth.



	We show that other potential constraints are not binding. Returns to education are low, and there is little to no infrastructure congestion, suggesting that although Belize is a structurally high-cost country, lacking complementary factors of production are not holding back growth. Furthermore, tax, inflation, exchange rate stability, and law and order do not seem to restrict investment through lowering appropriability. Finally, the country is not being held back by a lack of self-discovery. Although the movement to new export goods is critical for Belize{\textquoteright}s growth, this process is being hindered by the cost and availability of finance, both public and private.



	The appropriate policy stance is therefore to institutionalize fiscal discipline and gradually reduce the cost of credit. Given that low public savings are presently the result of expensive debt service, and also that foreign debt has created barriers to foreign borrowing and a heightened tax on financial intermediation which are key contributors to the high cost of finance, fiscal sustainability is key for drawing down the cost of finance in Belize. Reforms to prevent a lack of fiscal discipline in the future, particularly surrounding political cycles, are critical to end the past two decade{\textquoteright}s {\textquoteleft}stop-and-go{\textquoteright} growth pattern. Finally, the government must address the rapidly rising implicit tax expenditure on investment promotion, as well as the fall in the tax take.



	But these reductions in the domestic cost of finance will, as best, be gradual given the size of the debt. In the meantime, there is a need for public investment in areas such as public safety, road maintenance, and rural airports that if ignored, could have deleterious effects on long-term growth. Creative ways to finance such productivity-enhancing investments, which would not increase publicly-guaranteed debt, must be pursued.



	In addition, the industrial strategy of the country must adapt to the current financial constraints and focus on attracting investors who aren{\textquoteright}t subject to the high domestic interest rate, namely foreign investors. The current industrial strategy is not consistent with Belize{\textquoteright}s constraints to growth.

},
	url = {https://www.researchgate.net/publication/242531816_Growth_Diagnostic_Belize},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1529635,
	title = {Structural Transformation in Chile},
	year = {2007},
	abstract = {The main finding of this analysis is that Chile{\textquoteright}s pattern of specialization implies little opportunities for easy movements to new activities. Chile is specialized in an extremely sparse part of the product space and has a relatively unsophisticated export package. Past growth has been surprisingly strong given this pattern of specialization, as has been performance in the services sector, and it appears that there does remain some room to continue growing through quality upgrading in existing products. However, Chile has little room to increase its market share in existing products, and its current export package does not offer a path to future structural transformation and growth. Furthermore, this isn{\textquoteright}t due to Chile{\textquoteright}s status as a natural resource-based economy, as the country lags in these dimensions even when compared to countries like Canada, Australia, and New Zealand. Movements to new sectors are necessary, but will be difficult given this pattern of specialization. This suggests that there should be some scope for public investment in the study and coordination of new export activities to fuel long-term economic growth.},
	url = {https://www.researchgate.net/publication/265184386_Structural_Transformation_in_Chile},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1529063,
	title = {Growth Diagnostic: Paraguay},
	year = {2007},
	abstract = {
	Paraguay{\textquoteright}s growth history is characterized by prolonged periods of stagnation, interrupted by a few small recessions and growth accelerations. These dynamics reveal that growth in Paraguay has been dependent on latching on to particular export goods enjoying favorable external conditions, rather than driven by macroeconomic or political cycles. Moreover, the country currently has significant room for further export growth in existing products, as well as many new export products that are nearby and have high potential. But these available channels to generate sustained growth have all gone unexploited. Our growth diagnostic indicates that the underlying obstacles that have prevented the country from developing many of the available opportunities are related to two constraints: the provision of infrastructure and a lack of appropriability due to corruption and a poor regulatory environment. The current environment is one where the only activities that can survive have to be un-intensive in infrastructure, and either unintensive in transactions requiring an efficient business environment or at least at a scale where informality and corruption is a viable alternative to institutional blockages. We provide policy recommendations that will help alleviate these problems, focusing on not only on institutional and infrastructure reforms in the abstract, but outlining a process of learning from the relevant private sector actors what sector-specific needs in the areas of regulations and infrastructure are the most important for achieving accelerated growth in Paraguay.

},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {443406,
	title = {The Structure of the Product Space and the Evolution of Comparative Advantage},
	year = {2007},
	abstract = {
	This paper establishes a robust stylized fact: changes in the revealed comparative advantage of nations are governed by the pattern of relatedness of products at the global level. As countries change their export mix, there is a strong tendency to move towards related goods rather than to goods that are farther away. The pattern of relatedness of products is only very partially explained by similarity in broad factor or technological intensities, suggesting that the relevant determinants are much more product-specific. Moreover, the pattern of relatedness of products exhibits very strong heterogeneity: there are parts of this {\textquoteleft}product space{\textquoteright} that are dense while others are sparse. This implies that countries that are specialized in a dense part of the product space have an easier time at changing their revealed comparative advantage than countries that are specialized in more disconnected products.

},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1612070,
	title = {The long-run volatility puzzle of the real exchange rate},
	journal = {Journal of International Money and Finance},
	volume = {25},
	number = {1},
	year = {2006},
	pages = {93-124},
	abstract = {This paper documents large cross-country differences in the long run volatility of the real exchange rate. In particular, it shows that the real exchange rate of developing countries is approximately three times more volatile than the real exchange rate in industrial countries. The paper tests whether this difference in volatility can be explained by the fact that developing countries face larger shocks (both real and nominal) and recurrent currency crises or by different elasticities to these shocks. It finds that the magnitude of the shocks and the differences in elasticities can only explain a small part of the difference in RER volatility between developing and industrial countries. Results from ARCH estimations confirm that there is a substantial difference in long term volatilities between these two sets of countries and indicate that there is also a much higher persistence of deviations of the variance of the RER from its long run value when the economy suffers shocks of various kinds.},
	url = {https://ideas.repec.org/a/eee/jimfin/v25y2006i1p93-124.html},
	author = {Hausmann, Ricardo and Ugo Panizza and Rigobon, Roberto}
}
@article {1611987,
	title = {Why the US Current Account Deficit is Sustainable},
	journal = {International Finance},
	volume = {9},
	number = {2},
	year = {2006},
	pages = {223-240},
	url = {https://www.researchgate.net/publication/4761969_Why_the_US_Current_Account_Deficit_is_Sustainable},
	author = {Hausmann, Ricardo and Sturzenegger, Federico}
}
@article {1572298,
	title = {The Implications of Dark Matter for Assessing the US External Imbalance},
	year = {2006},
	abstract = {This paper clarifies how dark matter changes our assessment of the US external imbalance. Dark matter assets are defined as the capitalized value of the return privilege obtained by US assets. Because this return privilege has been steady over recent decades, it is likely to persist in the future or even to increase, as it becomes leveraged by an increasingly globalized world. Once this is included in future projections of US current accounts, the US external position looks much more balanced than depicted in official statistics.},
	author = {Hausmann, Ricardo and Sturzenegger, Federico}
}
@article {1561281,
	title = {Growth Collapses},
	year = {2006},
	abstract = {
	We study episodes where economic growth decelerates to negative rates. While the majority of these episodes are of short duration, a substantial fraction last for a longer period of time than can be explained as the result of business-cycle dynamics. The duration, depth and associated output loss of these episodes differs dramatically across regions. We investigate the factors associated with the entry of countries into these episodes as well as their duration. We find that while countries fall into crises for multiple reasons, including wars, export collapses, sudden stops and political transitions, most of these variables do not help predict the duration of crises episodes. In contrast, we find that a measure of the density of a country{\textquoteright}s export product space is significantly associated with lower crisis duration. We also find that unconditional and conditional hazard rates are decreasing in time, a fact that is consistent with either strong shocks to fundamentals or with models of poverty traps.

},
	author = {Hausmann, Ricardo and Rodr{\'\i}guez, Francisco and Wagner, Rodrigo}
}
@article {1535064,
	title = {China and the Global Economy: Medium-term Issues and Options - A Synthesis Report},
	year = {2006},
	abstract = {
	China{\textquoteright}s economic and social achievements since the beginning of reform and opening are unprecedented in global history. Managing the growth process in this continuously changing environment has required great skill and the use of unconventional economic policy. Now China has entered a new era in its development process with a set of challenges largely different from those of the recent past. Some problems - such as growing internal and external structural imbalances, increasing income and regional inequality {\textendash} have arisen from, or been exacerbated by, the very pattern and success of high growth since reforms began. Others are newly posed by rapid changes in the global economy. These challenges can best be tackled in an integrated and coordinated fashion. This report, supported by the China Economic Research and Advisory Programme (CERAP), identifies the primary challenges facing China today and presents options for meeting them.

},
	author = {Lim, Edwin and Spence, Michael and Hausmann, Ricardo}
}
@inbook {508531,
	title = {The Binding Constraints to Growth in Morocco},
	booktitle = {Fostering High Growth and Employment in the Kingdom of Morocco},
	year = {2006},
	pages = {15-49},
	publisher = {The World Bank},
	organization = {The World Bank},
	address = {Washington, DC},
	abstract = {
	This book identifies the binding constraints to growth of Morocco. It applies an innovative procedure known as {\textquoteright}growth diagnostic{\textquoteright} and has a central finding. The Moroccan economy suffers from a too slow process of structural transformation for achieving higher growth, especially for its exports that face unfavorable external shocks arising from competitor countries in the main markets for Moroccan exports. This process of so-called {\textquoteright}productive diversification{\textquoteright} requires that Morocco enhance its competitiveness. Four government failures are identified as the binding constraints to growth in Morocco: a rigid labor market; a taxation regime that represents a heavy burden for firms and an obstacle to hiring skilled human capital; a fixed exchange rate regime that has allowed regaining price stability, but, given existing rigidities in the labor market, does not favor international competitiveness; and an anti-export bias, featuring a still high level of trade protectionism despite recent progress in tariff reductions and the signing of several Free Trade Agreements. In parallel, three market failures affect competitiveness and innovation: information failures, coordination failures between the public and private sector, and training failures that rank the country among those with the lowest level of training offered by businesses.

},
	url = { },
	author = {Hausmann, Ricardo}
}
@article {443401,
	title = {Structural Transformation and Patterns of Comparative Advantage in the Product Space},
	year = {2006},
	abstract = {
	In this paper we examine the product space and its consequences for the process of structural transformation. We argue that the assets and capabilities needed to produce one good are imperfect substitutes for those needed to produce other goods, but the degree of asset specificity varies widely. Given this, the speed of structural transformation will depend on the density of the product space near the area where each country has developed its comparative advantage. While this space is traditionally assumed to be smooth and continuous, we find that in fact it is very heterogeneous, with some areas being very dense and others quite sparse. We develop a measure of revealed proximity between products using comparative advantage in order to map this space, and then show that its heterogeneity is not without consequence. The speed at which countries can transform their productive structure and upgrade their exports depends on having a path to nearby goods that are increasingly of higher value.

},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1561033,
	title = {South Africa{\textquoteright}s Export Predicament},
	year = {2006},
	abstract = {
	This paper explores export performance in South Africa over the past 50 years, and concludes that a lagging process of structural transformation is part of the explanation for stagnant exports per capita. Slow structural transformation in South Africa is found to be a consequence of the peripheral nature of South Africa{\textquoteright}s productive capabilities. We apply new tools to evaluate South Africa{\textquoteright}s future prospects for structural transformation, as well as to explore the sectoral priorities of the DTI{\textquoteright}s draft industrial strategy. We then discuss policy conclusions, advocating an {\textquoteleft}open-architecture{\textquoteright} industrial policy where the methods applied herein are but one tool to screen private sector requests for sector-specific coordination and public goods.



	* See also the 7/27/07\&nbsp;Sciencenews\&nbsp;article as well as the supplementary materials website.

},
	url = {https://onlinelibrary.wiley.com/doi/full/10.1111/j.1468-0351.2008.00337.x},
	author = {Hausmann, Ricardo and Klinger, Bailey}
}
@article {1612071,
	title = {Growth Accelerations},
	journal = {Journal of Economic Growth},
	volume = {10},
	number = {4},
	year = {2005},
	pages = {303-329},
	abstract = {Unlike most cross-country growth analyses, we focus on turning points in growth performance. We look for instances of rapid acceleration in economic growth that are sustained for at least eight years and identify more than 80 such episodes since the 1950s. Growth accelerations tend to be correlated with increases in investment and trade, and with real exchange rate depreciations. Political-regime changes are statistically significant predictors of growth accelerations. External shocks tend to produce growth accelerations that eventually fizzle out, while economic reform is a statistically significant predictor of growth accelerations that are sustained. However, growth accelerations tend to be highly unpredictable: the vast majority of growth accelerations are unrelated to standard determinants and most instances of economic reform do not produce growth accelerations.},
	url = {https://link.springer.com/article/10.1007\%2Fs10887-005-4712-0},
	author = {Hausmann, Ricardo and Lant Pritchett and Rodrik, Dani}
}
@report {1529631,
	title = {Toward a Strategy for Economic Growth in Uruguay},
	year = {2005},
	abstract = {The Uruguayan economy is recovering from the 2002 financial crisis that disrupted its banking system, caused a collapse of its currency and seriously affected its fiscal solvency. The crisis was clearly associated with the collapse of the Argentine economy and its concomitant currency, banking and debt crises. Both were also related to the sudden stop that followed the Russian crisis of 1998, which prompted an important realignment of the real in January 1999, a fact that had exerted enormous pressure on bilateral exchange rates within Mercosur. In this post-crisis period, Uruguay now faces several challenges to attain a sustainable growth path. This report proposes a series of recommendations towards this end. Implementing a strategy to accelerate growth inevitably involves interventions at both the macro and the micro level. The macro level involves the maintenance of a stable and competitive real exchange rate, so as to create a stable and encouraging environment for export growth. The authors take up each of these elements of the growth strategy. They first focus on the design of incentive policies for economic diversification and promotion. Then they discuss next the macroeconomic complements, with special emphasis on maintaining a competitive and stable real exchange rate.},
	url = {https://www.researchgate.net/publication/254420289_Towards_a_Strategy_for_Economic_Growth_in_Uruguay},
	author = {Hausmann, Ricardo and Rodrik, Dani and Rodriguez-Clare, Andres}
}
@article {508591,
	title = {Self-Discovery in a Development Strategy for El Salvador},
	journal = {Economia},
	volume = {6},
	number = {N1},
	year = {2005},
	abstract = {
	El Salvador is a star reformer. After the civil war of the 1980s, the country was able to adopt important political and institutional reforms. These included the incorporation of all political groups into the electoral process, the adoption of a new constitution, the elimination of the military police, the creation of a civilian police with members from both sides of the war, and the adoption of rules to strengthen the independence of the judiciary. On the economic front, the country consolidated its fiscal position, modernized its tax system, liberalized trade and banking, improved the regulation and supervision of its financial system, privatized most state productive assets including energy and telecommunications, and reformed its social security system in line with the Chilean model. It also expanded and granted local autonomy to the school system through the Community-Managed Schools Program (EDUCO). Finally, El Salvador dollarized its financial system in November 2000. Given the investment-grade rating earned by the country, domestic money market rates have converged to U.S. levels.Unfortunately, El Salvador is not a star performer. Standard theory would predict that such an improvement in the institutional and regulatory environment should be followed by convergence to a higher income level. Instead, after an initial period of recovery that lasted until 1997, real gross national income per capita stagnated at levels comparable to those achieved by the country in the late 1970s. Its income relative to the United States has not recovered from the fall associated with the civil war and is just over half the ratio achieved in the late 1970s.El Salvador is not alone in finding that reform efforts have had smaller-than-expectedgrowth effects. With the exception of Chile, the effects of reform ongrowth throughout Latin America have been smaller than the initial estimates carried out in the mid-1990s.In this context, El Salvador is an interesting case, since it has been particularly effective in applying wide-ranging reforms.This paper explores why these reforms have failed to produce more growth and what can be done about it.2 We begin by placing the economic choices faced by the incoming Salvadoran administration in a regional and historical perspective. The late 1980s and early 1990s in Latin America were preceded by a decade of stagnation, but coincided with a time of unusual confidence in the future. The collapse of communism, the failure of many interventionist policies in Latin America in the 1980s, and Chile{\textquoteright}s success gave governments a clear idea of the road they wanted to leave and the road they wanted to take. Inadequate past performance and consensus on the road ahead led to a forceful policy agenda.

},
	author = {Rodrik, Dani and Hausmann, Ricardo}
}
@article {503661,
	title = {Growth Diagnostics},
	year = {2005},
	author = {Hausmann, Ricardo and Rodrik, Dani and Andres Velasco}
}
@article {1535102,
	title = {The Challenge of Fiscal Adjustment in a Democracy: The Case of India},
	year = {2004},
	abstract = {India{\textquoteright}s fiscal problem has deep roots in its federal fiscal system, where multiple players find it difficult to coordinate adjustment. The size and closed nature of the Indian economy, aided by its deep domestic capital market and large captive pool of domestic savings, has disguised the cost of fiscal laxity and complicated the building of a consensus on reform. The new fiscal responsibility act establishes a new rules-based system to overcome this coordination failure. To strengthen the framework, we recommend an autonomous scorekeeper and the extension of similar rules to the state governments as part of a comprehensive reform of the federal system.},
	author = {Hausmann, Ricardo and Purfield, Catriona}
}
@article {1612074,
	title = {Economic development as self-discovery},
	journal = {Journal of Development Economics},
	volume = {72},
	number = {2},
	year = {2003},
	pages = {603-633},
	abstract = {In the presence of uncertainty about what a country can be good at producing, there can be great social value to discovering costs of domestic activities because such discoveries can be easily imitated. We develop a general-equilibrium framework for a small open economy to clarify the analytical and normative issues. We highlight two failures of the laissez-faire outcome: there is too little investment and entrepreneurship ex ante, and too much production diversification ex post. Optimal policy consists of counteracting these distortions: to encourage investments in the modern sector ex ante, but to rationalize production ex post. We provide some informal evidence on the building blocks of our model.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S030438780300124X},
	author = {Hausmann, Ricardo and Rodrik, Dani}
}
@article {1612073,
	title = {On the determinants of Original Sin: an empirical investigation},
	journal = {Journal of International Money and Finance},
	volume = {22},
	number = {7},
	year = {2003},
	pages = {957-990},
	abstract = {Most countries do not borrow abroad in their own currency, a fact that has been referred to as {\textquotedblleft}Original Sin{\textquotedblright}. This paper describes the incidence of the problem and makes an attempt at uncovering its cause. The paper finds weak support for the idea that the level of development, institutional quality, or monetary credibility or fiscal solvency is correlated with Original Sin. Only the absolute size of the economy is robustly correlated. The paper also explores the determinants of a country{\textquoteright}s capacity to borrow at home at long duration and in local currency. It finds that monetary credibility and the presence of capital controls are positively correlated with this capacity.},
	url = {https://www.sciencedirect.com/science/article/abs/pii/S0261560603000743},
	author = {Hausmann, Ricardo and Ugo Panizza}
}
@article {1573320,
	title = {Economic Development as Self-Discovery},
	year = {2002},
	abstract = {In the presence of uncertainty about what a country can be good at producing, there can be great social value to discovering costs of domestic activities because such discoveries can be easily imitated. We develop a general-equilibrium framework for a small open economy to clarify the analytical and normative issues. We highlight two failures of the laissez-faire outcome: there is too little investment and entrepreneurship ex ante, and too much production diversification ex post. Optimal policy consists of counteracting these distortions: to encourage investments in the modern sector ex ante, but to rationalize production ex post. We provide some informal evidence on the building blocks of our model.},
	author = {Hausmann, Ricardo and Rodrik, Dani}
}
@article {1561287,
	title = {Hard Money{\textquoteright}s Soft Underbelly: Understanding the Argentine Crisis},
	journal = {Brookings Trade Forum},
	year = {2002},
	pages = {59-104},
	url = {https://www.jstor.org/stable/25063168},
	author = {Hausmann, Ricardo and Andres Velasco}
}
