Arnold Kling  

Learning Economics

Student Loans... Nash Equilibrium in Higher Edu...

That was the title of a self-published book of essays. The title has a double meaning. One meaning is that one can learn (some) economics from reading the book. The other is that an economy is a learning mechanism.

Anyway, The WSJ blog reports on an intriguing study that pertains to this notion.

"The Atlas of Economic Complexity" ranks 128 nations based on their "productive knowledge" -- the skills, experience and general know-how that a given population acquires in producing certain goods. Countries with a high score in the report's "economic complexity index" have acquired years of knowledge in making a variety of products and goods and also have lots of room for growth. Essentially, the more collective knowledge a country has in producing goods, the richer it is -- or will be.

"The essential theory ... is that countries grow based on the knowledge of making things," Mr. Hausmann said in a phone interview. "It's not years of schooling. It's what are the products that you know how to make. And what drives growth is the difference between how much knowledge you have and how rich you are."

Comments and Sharing

COMMENTS (4 to date)
ajb writes:

I wonder what your colleague Garett Jones would have to say about the correlation of that index with the underlying average IQ of the nation?

Daublin writes:

Fascinating point of view.

I wonder how they address services? For example, how would Hollywood rate on the accumulated knowledge scale?

I suspect this concept is very difficult to pin down in the desired way. Every human being is constantly thinking about *something*. What makes the knowledge of a people better is that they are thinking about and acquiring *useful* knowledge. Knowledge that gives leverage. Knowledge that, combined with your fellow citizen's knowledge, combines multiplicatively.

I think GDP is a better measure. Measure the output, not the mechanism. But it's a fascinating point of view.

Anna writes:

I have to say, that this point of view concerning economics may hold some validity. The United States is most certainly a nation concerned with it's education, particularly specializations in science and math. However, I personally feel that maybe the country is becoming TOO specialized, hence the economic crisis we face now.
I personally believe that the country does not have room for everyone to specialize in their chosen career. After all our manufacturing jobs were sent over seas, this left little opportunity for entry level jobs that many young adults and teenagers need to at least get their footing, whereas before, the country seemed to possess a smaller percentage of those wishing to specialize and those who just want a job. Now we face the problem of too much competition with hardly any job openings for many who need them. Instead of being able to start out small, then work your way up the system, it seems that many college graduates are left jobless. I have always felt that experience in the workforce is key to gain leverage in the real world, but the opportunity to do so is lacking in our current system.

Steve Sailer writes:

"For example, how would Hollywood rate on the accumulated knowledge scale?"

Hollywood would rate pretty high. It's a unionized industry located in a high cost metropolis. Other places in North America and the rest of the world have been trying to get a bigger share of the recorded entertainment industry for decades, but Hollywood remains a money machine because it retains a unique depth of skills and relationships.

Comments for this entry have been closed
Return to top