In this paper we propose a new index of connectedness for an input–output system which is considered useful for quantifying economic complexity as the level of interdependence between the component parts (sectors) of a national (or regional) economy. This index is empirically applied in a tentative answer to the following questions: Should we expect to find a natural shift towards greater complexity as an economy grows and develops? Is a larger economy necessarily more complex than a smaller one? The interindustry tables of several OECD countries provide the material support for making international and historical comparisons of economic complexity as a level of interrelatedness.
Get full access to this article
View all access options for this article.
References
1.
AmaralJ F, 1999, “Complexity and information in economic systems”, in Perspectives on Complexity in Economics Ed. LouçãF, UECE, ISEG-UTL, Lisbon Technical University, pp 79–87.
2.
ArthurB, 1999, “Complexity and the economy”Science284107–109.
3.
BasuRJohnsonT G, 1996, “The development of a measure of intersectoral connectedness by using structural path analysis”Environment and Planning A28709–730.
4.
BlinJ MMurphyF H, 1974, “On measuring economic interrelatedness”Review of Economics and Statistics41437–440.
5.
BossermanR W, 1981, “Sensitivity techniques for examination of input–output flow analysis”, in Energy and Ecological Modelling Eds MitschW SBossermanR WKlopatekJ M (Elsevier, Amsterdam) pp 653–660.
6.
BossermanR W, 1982, “Complexity measures for evaluation of ecosystem networks”International Society for Ecological Modelling Journal437–59.
7.
CheneryH BWatanabeT, 1958, “Interregional comparisons of the structure of production”Econometrica26487–521.
8.
DietzenbacherE, 1992, “The measurement of interindustry linkages: Key sectors in the Netherlands”Economic Modelling9419–438.
9.
FinnJ T, 1976, “Cycling index: A general definition for cycling in compartment models”Journal of Theoretical Biology56363–380.
10.
FinnJ T, 1980, “Flow analysis of models of the Howard Brooks ecosystem”Ecology61562–571.
11.
HamiltonJ RJensenR C, 1983, “Summary measures of interconnectedness for input–output models”Environment and Planning A1555–65.
12.
HewingsGJDSonisMGuoJIsrailevichP RSchindlerG R, 1996, “The hollowing-out process in the Chicago economy, 1975–2010” DP 96-T-1, Regional Economics Applications Laboratory, University of Illinois, Urbana-Champaign, IL.
13.
HirschmanA O, 1958The Strategy of Economic Development (Yale University Press, New Haven, CT).
14.
JensenR CWestG R, 1980, “The effect of relative coefficient size on input–output multipliers”Environment and Planning A12659–670.
15.
LantnerRCarluerF, 2004, “Spatial dominance: A new approach to the estimation of interconnectedness in regional input–output tables”The Annals of Regional Science38451–467.
16.
PeacockA TDosserD, 1957, “Input–output analysis in an underdeveloped country: A case study”The Review of Economic Studies2521–24.
17.
RasmussenP N, 1957Studies in Intersectoral Relations (North-Holland, Amsterdam).
18.
RobinsonSMarkandyaA, 1973, “Complexity and adjustment in input–output systems”Oxford Bulletin of Economics and Statistics35119–134.
19.
RosserJ, 1999, “On the complexities of complex economic dynamics”Journal of Economic Perspectives13169–192.
20.
SonisMHewingsGJD, 1998, “Economic complexity as network complication: Multiregional input–output structural path analysis”The Annals of Regional Science32407–436.
21.
SzyrmerJ M, 1985, “Measuring connectedness of input–output models: 1. Survey of the measures”Environment and Planning A171591–1612.
22.
SzyrmerJ M, 1986, “Measuring connectedness of input–output models: 2. Total flow concept”Environment and Planning A18107–121.
23.
UlanowiczR E, 1980, “An hypothesis on the development of natural communities”Journal of Theoretical Biology85223–245.
24.
UlanowiczR E, 1981, “A unified theory of self-organization”, in Energy and Ecological Modelling Eds MitschW SBossermanR WKlopatekJ M (Elsevier, Amsterdam) pp 649–652.
25.
WestG RBrownR, 2003, “Structural change, intersectoral linkages and hollowing-out in the Taiwanese Economy, 1976–1994”, DP 327, School of Economics, The University of Queensland.
26.
WongY K, 1954, “Some mathematical concepts for linear economic models”, in Economic Activity Analysis Ed. MorgensternO (John Wiley, New York) pp 283–341.
27.
YanCAmesE, 1965, “Economic interrelatedness”The Review of Economic Studies32290–310.
28.
ZuchettoJ, 1981, “Energy diversity of regional economies”, in Energy and Ecological Modelling Eds MitschW SBossermanR WKlopatekJ M (Elsevier, Amsterdam) pp 543–548.
