Economic Diversification in LICs: Stylized Facts and Macroeconomic Implications

December 14, 2012

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Chris Papageorgiou, and Nikola Spatafora. Economic Diversification in LICs: Stylized Facts and Macroeconomic Implications, (USA: International Monetary Fund, 2012) accessed September 19, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

Limited diversification is an underlying characteristic of many low-income countries (LICs). Concentration in sectors with limited scope for increases in productivity and quality may result in less broad-based and sustainable growth. Moreover, lack of diversification may increase exposure to adverse external shocks and macroeconomic instability. The SDN will have three objectives. First, to review and extend the evidence, from the existing literature and ongoing IMF work, that points to diversification as a crucial aspect of the development process. A major focus will be on cross-country and cross-regional differences in the pace of diversification. Second, to draw lessons from the experiences of those countries that have successfully diversified their economies. Third, to analyze the relationship between diversification, growth, and volatility.

Subject: Economic growth, Economic sectors, Exports, International trade, Labor, Manufacturing, National accounts, Personal income, Structural transformation

Keywords: Asia and Pacific, Diversification, Diversification effort, Diversification pattern, Diversification spurt, East Asia, Export diversification, Exports, Growth, IMF staff calculation, Industry diversification, LICs, Manufacturing, Personal income, Product diversification, Quality upgrading, SDN, Structural transformation, Sub-Saharan Africa, Trade, Trade and real-sector diversification, Trade diversification, Volatility

Publication Details

Pages:

22
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2012/013
Stock No:

SDNEA2012013
ISBN:

9781475532180
ISSN:

2617-6750

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