THE RELATIONSHIP BETWEEN ECONOMIC COMPLEXITY AND ECONOMIC GROWTH: A PANEL VAR APPROACH FOR OECD COUNTRIES

Economic complexity presents a new perspective in describing and explaining the state of the economy of countries. It measures the complexity and status of a country's products and income levels. The higher the economic complexity index, the higher the rate of growth, the faster the development of countries and the more productive activities emerge. Based on these presuppositions, this study examines the relationship between economic complexity and economic growth for OECD countries using panel data analysis, namely a panel VAR model and a causality test. It covers the period of 2000-2021. Based on the obtained results the relationship between economic complexity and growth was found to be positive but statistically insignificant, whereas the causality test suggests a uni-directional causality, meaning that economic complexity does not cause economic growth, whereas economic growth causes economic complexity.

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