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Odd Lots

How Economic Complexity Explains Which Countries Become Rich

Odd Lots

Bloomberg

News, Investing, Business, News Commentary, Business News

4.41.6K Ratings

🗓️ 14 August 2023

⏱️ 56 minutes

🧾️ Download transcript

Summary

Why do some countries become rich while others stagnate? And can you predict which countries become wealthy in advance of them actually increasing their collective GDP? The answer may lie in the complexity of each nation's domestic economy. On this episode we speak with Ricardo Hausmann, a professor and director of the Growth Lab at Harvard University. He helps us understand what economic complexity is, how it's measured, and the process by which countries can move from being less complex to more complex over time.

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Transcript

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0:00.0

Oddlots is brought to you by interactive brokers. Access to vast selection of global fixed income securities at IBKR's bond marketplace. Search their deep availability of over 1 million bonds globally.

0:11.3

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0:21.8

In addition, clients can interact with each other by placing bids and offers online to execute their trades. Learn more at IBKR.com slash bonds.

0:30.0

I'm Akshatrati and this summer on my podcast zero, I'm doing a series about climate storytelling, how we talk about climate change and what it means for how we confront it.

0:40.8

This week, I'm interviewing journalist Amy Vestavelt about reporting on the history of climate denialism.

0:46.8

I'm a big believer in the idea that you can't effectively solve a problem if you don't really know where it came from.

0:54.6

Listen to zero on the iHeart Radio app or wherever you get your podcasts.

1:10.3

Hello and welcome to another episode of the Oddlots podcast. I'm Joe Wyzenthal.

1:15.4

And I'm Tracy all the way. Tracy, I'm super late to everything. First of all, did you play Wordl?

1:21.6

I did. I didn't get obsessed with it. Like some people did, but I think we were all fairly bored during that time period and on the lookout for any sort of entertainment.

1:31.1

And it never clicked, but I'm always late to everything. Like a year ago, people were telling me it's like, oh, you got to play this game.

1:38.3

It's like a trade-all. And I did end, but like three or four months ago, I started really getting into it. And I think you're into it now too.

1:44.5

Yeah, I think we both started playing around the same time, probably because we heard about it from the same person.

1:51.6

It is a fun game. So for those who don't know, it is like Wordl. It basically presents a sort of graphic schematic of an unnamed country's exports.

2:03.7

And you have to try to guess what country it is.

2:06.6

Yeah, exactly. And I'm not very good at geography. So often it'll say like, okay, you're close, but it's like you have to go 1500 kilometers to the Northwest.

2:15.2

I'm pretty bad at geography, so I'm not good. But as playing this game and watching the way the different shapes of different countries export mix, I feel like I've really started to learn things about the world.

2:29.5

I have learned so much about the economy of Angola.

2:32.7

Right. So you see a country and it's like 80% of their exports are like coffee and gold, right? Or something like that.

2:40.8

And you're like, okay, this is a relatively poor country. It has a lot of growth left to do. And then you see another country and it's like advanced circuits and medicine and hangers and bananas and all the stuff.

2:56.6

And like, oh, and you start to see these shapes and these distributions that sort of like tell you things. It's like, okay, I can guess maybe this is in Europe, or maybe they have a lot of things.

3:04.5

Maybe it's in Eastern Europe. You suddenly sort of learn like how rich countries goods exports really differ from poorer countries goods exports.

...

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