Assessing Economic Complexity with Input-Output Based Measures

ASSESSING ECONOMIC COMPLEXITY WITH
INPUT-OUTPUT BASED MEASURES

J. CARLOS LOPES*, JOÂO DIAS, and J. FERREIRA DO AMARAL

ISEG - School of Economics and Management, Technical University of Lisbon,
and UECE - Research Unit on Complexity and Economics

Economic complexity can be defined as the level of interdependence between the
component parts of an economy. In input-output systems, intersectoral connectedness is a
crucial feature of analysis, and there are many different methods for measuring it. Most
of the measures, however, have drawbacks that prevent them from being used as a good
indicator of economic complexity, because they were not explicitly made with this
purpose in mind. In this paper, we present, discuss and compare empirically different
indexes of economic complexity as intersectoral connectedness, using the interindustry
tables of several OECD countries.

Keywords: input-output analysis; intersectoral connectedness; economic complexity

JEL classifications: C67, D57, R15

* Corresponding author:

e-mail: jcflopes@iseg.utl.pt

Full address:

Prof. Joao Carlos Lopes

ISEG - UECE

Rua Miguel Lupi, n° 20
1249-078 Lisboa

Portugal

The financial support of FCT (Fundaçaopara a Ciência e a Tecnologia), Portugal, is
gratefully acknowledged. This paper is part of the Multi-annual Funding Project
(POCTI/0436/2003)

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