1. The Product Space and Its Consequences for Economic Growth
Cesar A. Hidalgo R. B.Klinger, A.-L. Barabasi, R. Hausmann
Center for Complex Network Research
Department of Physics
University of Notre Dame
Center for International Development Kennedy School of Government
Harvard University

2. Area of countries proportional to ppp (GDP per Capita)
Area of countries proportional to ppp (GDP per Capita). Source: worldmapper.org

4. Fij = min{P(RCAi|RCAj),P(RCAj|RCAi)}
Share of the ith product on the basket of country c at time t
Share of the ith product on the basket of the world at time t
fij=P(RCAi|RCAj)
Fij = min{P(RCAi|RCAj),P(RCAj|RCAi)}
B. Balassa, The Review of Economics and Statistics 68, 315 (1986).

7. Feenstra’s Trade Flows(1)
sitc-4 import and export data.
(1) Feenstra, R. R. Lipsey, H. Deng, A. Ma and H. Mo “World Trade Flows: ” NBER working paper National Bureau of Economic Research, Cambridge MA.

8. Threshold = 0.55
Number of Links = 1525

10. MALAYSIA

11. Malaysia 1975

12. Malaysia 1980

13. Malaysia 1985

14. Malaysia 1990

15. Malaysia 1995

16. Malaysia 2000

17. Density Discovery Factor
wj = Fraction of the product space that seems to be developed from the jth product perspective
Discovery Factor
Hj = Increase in density between transition product and undeveloped products.

18. Discovery Factor
Density

19. P(transition | closest developed product is at proximity f)

20. KEY
Denotes where region has RCA

22. Conclusion We showed: Product space is heterogeneous
Constrains the development of RCA
Rich and poor countries are located in distinct places of it
Development Strategies should be different for rich and poor countries
The structure of the space prevents economical convergence