Assessing Economic Complexity with Input-Output Based Measures



Looking at the absolute values of the connectedness measures and their percentage
changes (Table 5) we also note a slight (and perhaps unexpected) reduction in the average
economic complexity, with a decreasing dispersion of countries along the “interrelatedness
scale function” but no significant relative changes, except in the UK, which rose from 8th in
the 1970s to 4th in the 1990s.

INSERT TABLE 5

A closer inspection of the absolute values and rankings calls for a careful association of
the measures corresponding to different methodologies or conceptualizations of economic
complexity. This task can be better accomplished by analyzing the correlation coefficients
presented in Tables 6 and 7 and using the following definitions and results.

INSERT TABLES 6 AND 7

Let M be the set of the measures mi, r(i,j) the absolute value of the correlation coefficient
between m
i and mj, and c the number 0 ≤ c ≤ 1.

Definition 1: A bundle B of measures of M is a set of elements of M such that, for every
pair (m
i , mj ) of B, we have r(i,j) ≥ c and, for every mk of M-B, we have at least one mi of B
such that r(i,k) < c.

Two bundles B1 and B2 are perfectly separated when, for every mk of B1, we have r(k,i)
<
c for every mi of B2.

14



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