{
  "title": "Raising Long-Run Growth in Latin America and the Caribbean—A Complex(ity) Issue",
  "publication": "IMF Blog, June 9, 2015",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2015/06/09/raising-long-run-growth-in-latin-america-and-the-caribbean-a-complexity-issue",
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  "summary": "Authors: Fabiano Rodrigues Bastos, Ke Wang",
  "sections": [
    {
      "heading": "Overview and context",
      "content": "- Authors: Fabiano Rodrigues Bastos, Ke Wang\n- Date: June 9, 2015\n- Main problem: Growth in Latin America and the Caribbean has weakened significantly over the last few years; part of this weakness appears to be persistent and IMF economists have marked down medium-term growth projections.\n- Historical note: Abstracting from the “golden decade” from 2003 to 2011, when rising commodity prices powered a strong expansion, the region has struggled to sustain sufficiently high growth rates to catch up with more advanced economies."
    },
    {
      "heading": "Economic complexity: concept and regional status",
      "content": "- Definition: Economic complexity captures the productive knowledge of a country, inferred from the breadth and sophistication of goods that a country exports.\n- Empirical relationship: More complex economies on average have higher levels of income per capita.\n- Regional standing:\n  - Latin America and the Caribbean are far less complex than advanced economies or the newly industrialized Asian economies.\n  - Complexity in Latin America and the Caribbean has been stagnant or trending down since 1970.\n  - The region’s complexity looks no worse than the broader group of emerging economies, despite heavy reliance on commodity exports."
    },
    {
      "heading": "Predictive evidence and quantitative implications",
      "content": "- Data and methods: Analysis revisited Hausmann and coauthors’ findings using several econometric extensions and a large panel of more than 100 countries between 1970 and 2010.\n- Key finding: Complexity helps predict long-run growth of GDP per capita alongside demographics, commodity exports, and indicators of macroeconomic stability.\n- Quantitative implications for the region:\n  - Variation in complexity levels across the region can account for differences of almost a full percentage point in annual per capita growth.\n  - If other determinants are abstracted from, the most complex economies in the region (like Mexico and Brazil) would outpace the less complex ones by a full percentage point every year.\n  - Offsetting factors:\n    - Each year of macroeconomic instability can reduce GDP per capita growth by a cumulative 2 percentage points over the course of a decade.\n    - Higher dependency ratios can meaningfully reduce growth, highlighting demographic risks over the coming decades."
    },
    {
      "heading": "Policy takeaways and recommendations",
      "content": "- Complexity matters but is not sufficient on its own; maintaining macroeconomic stability is essential.\n- Structural reforms should remain a priority, especially in areas closely associated with economic complexity:\n  - Infrastructure\n  - Education\n  - Market openness\n- Caution on activist development policies:\n  - A renewed push for activist development policies needs careful handling.\n  - A more systematic understanding of costs and risks is necessary before scaling up such policies.\n  - Past experiences with industrial policies are cautionary, particularly where governance and institutional quality lag.\n- Use of complexity research:\n  - Complexity analysis can help countries better understand comparative advantages and assess potential for knowledge upgrading.\n  - Cross-country insights can inform trade and investment negotiations to better leverage a country’s knowledge base."
    },
    {
      "heading": "Conclusion",
      "content": "- Complexity appears to be an important determinant of long-run economic growth and a useful lens for analyzing the development of countries’ productive capacity, but gains from increasing complexity depend critically on macroeconomic stability, demographic trends, and implementation of supportive structural reforms.\n\nSource: IMF blog post — Raising Long-Run Growth in Latin America and the Caribbean—A Complex(ity) Issue (Fabiano Rodrigues Bastos, Ke Wang; June 9, 2015).\n\n---\n\n Content in this bundle\n\n- Elevar o crescimento a longo prazo na América Latina e no Caribe: Uma questão de complexidade\n  - Elevar o crescimento a longo prazo na América Latina e no Caribe: Uma questão de complexidade (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Elevar o crescimento a longo prazo na América Latina e no Caribe: Uma questão de complexidade (PDF){rel=\"external\" type=\"application/pdf\"}\n- REOWHD-2015FM.indd\n  - REOWHD-2015FM.indd (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - REOWHD-2015FM.indd (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- https://www.imf.org/wp-content/uploads/2015/06/whd-reo-may-2015-1.jpg\n- https://www.imf.org/wp-content/uploads/2015/06/whd-reo-may-2015-2.jpg\n- https://www.imf.org/wp-content/uploads/2015/06/whd-reo-may-2015-3.jpg\n\nSource: https://www.imf.org/en/blogs/articles/2015/06/09/raising-long-run-growth-in-latin-america-and-the-caribbean-a-complexity-issue"
    }
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    "Authors: Fabiano Rodrigues Bastos, Ke Wang",
    "Published: June 9, 2015",
    "Authors: Fabiano Rodrigues Bastos, Ke Wang",
    "Date: June 9, 2015",
    "Main problem: Growth in Latin America and the Caribbean has weakened significantly over the last few years; part of this weakness appears to be persistent and IMF economists have marked down medium-term growth projections.",
    "Historical note: Abstracting from the “golden decade” from 2003 to 2011, when rising commodity prices powered a strong expansion, the region has struggled to sustain sufficiently high growth rates to catch up with more advanced economies.",
    "Definition: Economic complexity captures the productive knowledge of a country, inferred from the breadth and sophistication of goods that a country exports.",
    "Empirical relationship: More complex economies on average have higher levels of income per capita.",
    "Regional standing:",
    "Data and methods: Analysis revisited Hausmann and coauthors’ findings using several econometric extensions and a large panel of more than 100 countries between 1970 and 2010.",
    "Key finding: Complexity helps predict long-run growth of GDP per capita alongside demographics, commodity exports, and indicators of macroeconomic stability.",
    "Quantitative implications for the region:",
    "Complexity matters but is not sufficient on its own; maintaining macroeconomic stability is essential.",
    "Structural reforms should remain a priority, especially in areas closely associated with economic complexity:",
    "Caution on activist development policies:",
    "Use of complexity research:",
    "Complexity appears to be an important determinant of long-run economic growth and a useful lens for analyzing the development of countries’ productive capacity, but gains from increasing complexity depend critically on macroeconomic stability, demographic trends, and implementation of supportive structural reforms.",
    "**Elevar o crescimento a longo prazo na América Latina e no Caribe: Uma questão de complexidade**",
    "**REO_WHD-2015_FM.indd**",
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