Abstract

This paper analyzes the role of economic complexity in the ratio of Thirlwall’s
elasticities, fundamental to understanding the reason for the unequal growth of countries. To
this end, a theoretical model is used for a group of nations. Differences in growth rates
among countries are associated with different ratios of income elasticities of exports and imports.
According to econometric estimates, the country that manages to increase the economic
complexity of its export basket, the investment/GDP ratio and has a lower GDP per capita
improves the elasticities ratio and, therefore, its long-term growth. In other words, the
results are categorical in the sense of demonstrating the central role of these policies for the
country to advance in the process of structural change and move towards the production of more complex manufactured goods, because these can ensure sustainable economic growth,
that is, compatible with the equilibrium of the balance of payments.

JEL Classification: C2; C22; F14; F41; F43.