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On the predictability of growth

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Cristelli, Matthieu ; Tacchella, Andrea ; Cader, Masud ; Roster, Kristin ; Pietronero, Luciano

World Bank

World Bank - Washington, DC

2017

45 p.

growth model ; economic growth ; economic forecast

Policy Research Working Paper

8117

Economics

http://www.worldbank.org/

English

Bibliogr.

"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."

Digital



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