Income inequality linked to export “complexity”
In a series of papers over the past 10 years, MIT Professor César Hidalgo and his collaborators have argued that the complexity of a country’s exports — not just their diversity but the expertise and technological infrastructure required to produce them — is a better predictor of future economic growth than factors economists have historically focused on, such as capital and education. Now, a new paper by Hidalgo and his colleagues, appearing in the journal World Development, argues that everything else being equal, the complexity of a country’s exports also correlates with its degree of economic equality: The more complex a country’s products, the greater equality it enjoys relative to similar-sized countries with similar-sized economies. “When people talk about the role of policy in inequality, there is an implicit assumption that you can always reduce inequality using only redistributive policies,” says Hidalgo, the Asahi Broadcasting Corporation Associate Professor of Media Arts and...