Economic Complexity

1.5 Credits · Level: Graduate, Undergraduate

In most successful economic development stories, countries travel a path from producing low complexity products such as agricultural commodities to producing more complex products such as electronics or machinery. This course examines how countries travel that path. We will examine: why countries produce what they do, what does the path toward higher complexity tend to look like, and what role does government play. The course first presents a basic theory of economic complexity that helps build intuition for what makes a product complex. Then we will examine how a product's complexity affects the difficulty and value of producing it in a given country. Key factors affecting diversification and complexity will also be examined, including the role of cities and human capital. Case studies of governments that have successfully promoted diversification and increased their economic complexity are included throughout to ensure course material is connected with real world applications. Students will develop familiarity with a variety of tools that are useful for understanding economies. They will learn to examine a country’s economic history, current constraints, and future opportunities. Students will also develop the ability to connect economic analysis with realistic and implementable policy-making. While the course focuses on developing and transitional countries, many insights from the course are also applicable to developed countries.