On the Predictability of Growth
A country's productive structure and competitiveness are harbingers of growth. Growth is a dynamic process based on capabilities that are difficult to define and measure across countries. This paper uses a global measure of fitness (or complexity-weighted diversity of production) as a method to explore a country's relative growth potential. The analysis finds that there are two types of growth, predictable or laminar, and unpredictable. This classification is used to create a selection mechanism (the Selective Predictability Scheme), defining future growth trajectories for similar countries, and compares projected long-term, five-year forecasts with traditional methods used by the International Monetary Fund. The analysis finds that production structure is a good long-term predictor of growth, with prediction performance falling off for countries not yet in the laminar classification.
| Main Authors: | , , , , |
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| Format: | Working Paper biblioteca |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017-06
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| Subjects: | ECONOMIC PREDICTIONS, GROWTH PROJECTIONS, FORECASTING, PREDICTABILITY, POTENTIAL, COMPETITIVENESS, DIVERSIFICATION, |
| Online Access: | http://documents.worldbank.org/curated/en/632611498503242103/On-the-predictability-of-growth https://hdl.handle.net/10986/27620 |
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| Summary: | A country's productive structure
and competitiveness are harbingers of growth. Growth is a
dynamic process based on capabilities that are difficult to
define and measure across countries. This paper uses a
global measure of fitness (or complexity-weighted diversity
of production) as a method to explore a country's
relative growth potential. The analysis finds that there are
two types of growth, predictable or laminar, and
unpredictable. This classification is used to create a
selection mechanism (the Selective Predictability Scheme),
defining future growth trajectories for similar countries,
and compares projected long-term, five-year forecasts with
traditional methods used by the International Monetary Fund.
The analysis finds that production structure is a good
long-term predictor of growth, with prediction performance
falling off for countries not yet in the laminar classification. |
|---|