DP5444 | What You Export Matters

Publication Date

12/01/2006

JEL Code(s)

Keyword(s)

Programme Area(s)

Abstract

When local cost discovery generates knowledge spillovers, specialization patterns become partly indeterminate and the mix of goods that a country produces may have important implications for economic growth. We demonstrate this proposition formally and adduce some empirical support for it. We construct an index of the 'income level of a country's exports,' document its properties, and show that it predicts subsequent economic growth.