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The heterogeneous dynamics of economic complexity.

ABSTRACT: 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.

SUBMITTER: Cristelli M

PROVIDER: S-EPMC4325004 | biostudies-literature | 2015

REPOSITORIES: biostudies-literature

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The heterogeneous dynamics of economic complexity.

Cristelli Matthieu M Tacchella Andrea A Pietronero Luciano L

PloS one 20150211 2

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 ...[more]

PMID: 25671312

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Project description:Ecosystems degradation represents one of the major global challenges at the present time, threating people's livelihoods and well-being worldwide. Ecosystem restoration therefore seems no longer an option, but an imperative. Restoration challenges are such that a dialogue has begun on the need to re-shape restoration as a science. A critical aspect of that reshaping process is the acceptance that restoration science and practice needs to be coupled with socio-economic research and public engagement. This inescapably means conveying complex ecosystem's information in a way that is accessible to the wider public. In this paper we take up this challenge with the ultimate aim of contributing to making a step change in science's contribution to ecosystems restoration practice. Using peatlands as a paradigmatically complex ecosystem, we put in place a transdisciplinary process to articulate a description of the processes and outcomes of restoration that can be understood widely by the public. We provide evidence of the usefulness of the process and tools in addressing four key challenges relevant to restoration of any complex ecosystem: (1) how to represent restoration outcomes; (2) how to establish a restoration reference; (3) how to cope with varying restoration time-lags and (4) how to define spatial units for restoration. This evidence includes the way the process resulted in the creation of materials that are now being used by restoration practitioners for communication with the public and in other research contexts. Our main contribution is of an epistemological nature: while ecosystem services-based approaches have enhanced the integration of academic disciplines and non-specialist knowledge, this has so far only followed one direction (from the biophysical underpinning to the description of ecosystem services and their appreciation by the public). We propose that it is the mix of approaches and epistemological directions (including from the public to the biophysical parameters) what will make a definitive contribution to restoration practice.

Dataset Information

The heterogeneous dynamics of economic complexity.

Publications

The heterogeneous dynamics of economic complexity.

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