Ricardo Hausmann: Taking Stock of Complexity Economics 4/5

The video explores complexity economics, questioning why some countries are rich while others are poor. It introduces the Scrabble theory of production, suggesting that countries with more 'letters' (capabilities) can produce more complex products. The discussion highlights the importance of economic complexity in understanding global income disparities and growth patterns. The speaker argues that the globalization of value chains facilitates convergence, allowing countries to participate in production with fewer capabilities.

What is the speaker's main critique of discussing methodology in economics?

• It is only for trained economists.

• It often replaces practical insights.

• It is too complex to understand.

• It is not relevant to economic growth.

What historical trend is highlighted in the discussion of income disparities?

• The recent convergence of incomes in some regions.

• The uniform distribution of wealth globally.

• The decline of Western economies.

• The consistent growth of all countries.

In the Scrabble theory of production, what do 'letters' represent?

• Cultural values.

• Natural resources.

• Productive capabilities.

• Economic policies.

According to the Scrabble theory, why are some products made by fewer countries?

• They require more capabilities.

• They are less profitable.

• They require fewer resources.

• They are not in demand.

What pattern is observed in the empirical analysis of global trade data?

• A linear distribution of products.

• A triangular pattern of diversification.

• A circular pattern of trade.

• A random distribution of capabilities.

What does the speaker suggest about countries with more 'letters'?

• They have fewer economic opportunities.

• They are more prone to economic crises.

• They can produce more complex products.

• They are less diversified.

How does globalization contribute to economic convergence according to the speaker?

• By reducing trade barriers.

• By splitting up the value chain.

• By increasing tariffs.

• By promoting cultural exchange.

What is the main implication of the Scrabble theory for economic growth?

• Countries should focus on natural resources.

• Accumulating capabilities is crucial for growth.

• Trade policies are the most important factor.

• Economic growth is unpredictable.

What does the speaker use to measure a country's economic complexity?

• GDP per capita.

• Trade volume.

• Economic complexity index.

• Number of industries.

What does the speaker imply about the errors in the economic model?

• They provide insights into future growth.

• They indicate a flawed model.

• They are purely random.

• They are irrelevant to economic analysis.