Abstract
A possible answer to the puzzling discrepancy between the Adam Smith’s optimal growth strategy of specialization and what is really observed (i.e. the richest countries are also the one with the most diversified productive system) can be found in the existence of non exportable (or non importable) activities which, once developed by a country or an area, stay localized in that area. In such a scenario it becomes a priority to develop all these non tradable and localized activities for a countries and the consequence of this strategy of development leads to a diversified productive system.
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Notes
- 1.
The corresponding left eigenvector is the stationary (and asymptotic) Markov state of the Markov chain defined by the transition matrix \(\mathcal{C}\).
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Cristelli, M. (2014). Beyond Classical Theory of Economic Growth. In: Complexity in Financial Markets. Springer Theses. Springer, Cham. https://doi.org/10.1007/978-3-319-00723-6_12
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DOI: https://doi.org/10.1007/978-3-319-00723-6_12
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