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      The Product Space Conditions the Development of Nations

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          Abstract

          Economies grow by upgrading the type of products they produce and export. The technology, capital, institutions and skills needed to make such new products are more easily adapted from some products than others. We study the network of relatedness between products, or product space, finding that most upscale products are located in a densely connected core while lower income products occupy a less connected periphery. We show that countries tend to move to goods close to those they are currently specialized in, allowing nations located in more connected parts of the product space to upgrade their exports basket more quickly. Most countries can reach the core only if they jump over empirically infrequent distances in the product space. This may help explain why poor countries have trouble developing more competitive exports, failing to converge to the income levels of rich countries.

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          Author and article information

          Journal
          15 August 2007
          Article
          10.1126/science.1144581
          0708.2090
          f136aba0-a3d8-4319-8e8e-7cc51e291b3c
          History
          Custom metadata
          Science 317, 482 (2007)
          This version is slightly different from the one published in Science
          q-fin.GN physics.data-an

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