The heterogeneous dynamics of economic complexity

M. Cristelli, A. Tacchella, L. Pietronero

PLOS ONE 10, 1371 (2015)


Download the PDF

LQ placeholderThe growth dynamics of countries in the fitness-income plane exhibits a high degree of heterogeneity.

The growth dynamics of countries in the fitness-income plane exhibits a high degree of heterogeneity.

What will be the growth of the Gross Domestic Product (GDP) or the competitiveness of China, United States, and Vietnam in the next 3, 5 or 10 years? Despite this kind of questions has a large societal impact and an extreme value for economic policy making, providing a scientific basis for economic predictability is still a very challenging problem. Recent results of a new branch—Economic Complexity—have set the basis for a framework to approach such a challenge and to provide new perspectives to cast economic prediction into the conceptual scheme of forecasting the evolution of a dynamical system as in the case of weather dynamics. We argue that a recently introduced non-monetary metrics for country competitiveness (fitness) allows for quantifying the hidden growth potential of countries by the means of the comparison of this measure for intangible assets with monetary figures, such as GDP per capita. This comparison defines the fitness-income plane where we observe that country dynamics presents strongly heterogeneous patterns of evolution. The flow in some zones is found to be laminar while in others a chaotic behavior is instead observed. These two regimes correspond to very different predictability features for the evolution of countries: in the former regime, we find strong predictable pattern while the latter scenario exhibits a very low predictability. In such a framework, regressions, the usual tool used in economics, are no more the appropriate strategy to deal with such a heterogeneous scenario and new concepts, borrowed from dynamical systems theory, are mandatory. We therefore propose a data-driven method—the selective predictability scheme—in which we adopt a strategy similar to the methods of analogues, firstly introduced by Lorenz, to assess future evolution of countries.

LQ placeholder

China Might Still Be Booming

The heterogeneous dynamics of economic complexity

Bloomberg View, 2015-03-01

LQ placeholder

Physicists make 'weather forecasts' for economies in EU-funded project GROWTHCOM

The heterogeneous dynamics of economic complexity

European Commission, 2015-02-25

LQ placeholder

Scale of non-locality for a system of n particles

S. Talaganis, I. Teimouri

Sub. to Physical Review D

LQ placeholder

How much can we influence the rate of innovation?

T. Fink, M. Reeves

Science Advances

LQ placeholder

The statistical physics of real-world networks

G. Cimini, T. Squartini, F. Saracco, D. Garlaschelli, A. Gabrielli, G. Caldarelli

Nature Reviews Physics

LQ placeholder

On defining the Hamiltonian beyond quantum theory

D. Branford, O. Dahlsten, A. Garner

Foundations of Physics

LQ placeholder

Reconstructing grain-shape statistics from electron back-scatter diffraction microscopy

R. Farr, Z. Vukmanovic, M. Holness, E. Griffiths

Physical Review Materials

LQ placeholder

Tackling information asymmetry in networks: a new entropy-based ranking index

P. Barucca, G. Caldarelli, T. Squartini

Journal of Statistical Physics

LQ placeholder

Eigenvalues of subgraphs of the cube

B. Bollobás, J. Lee, S. Letzter

European Journal of Combinatorics

LQ placeholder

Maximum one-shot dissipated work from Rényi divergences

N. Halpern, A. Garner, O. Dahlsten, V. Vedral

Physical Review E

123 / 123 papers