Physics – Physics and Society
Scientific paper
2011-12-13
Physics
Physics and Society
16 pages (main text), 6 figures
Scientific paper
We show that world trade network datasets contain empirical evidence that the dynamics of innovation in the world economy follows indeed the concept of creative destruction, as proposed by J.A. Schumpeter more than half a century ago. National economies can be viewed as complex, evolving systems, driven by a stream of appearance and disappearance of goods and services. Products appear in bursts of creative cascades. We find that products systematically tend to co-appear, and that product appearances lead to massive disappearance events of existing products in the following years. The opposite - disappearances followed by periods of appearances - is not observed. This is an empirical validation of the dominance of cascading competitive replacement events on the scale of national economies, i.e. creative destruction. We find a tendency that more complex products drive out less complex ones, i.e. progress has a direction. Finally we show that the growth trajectory of a country's product output diversity can be understood by a recently proposed evolutionary model of Schumpeterian economic dynamics.
Hausmann Ricardo
Klimek Peter
Thurner Stefan
No associations
LandOfFree
Empirical confirmation of creative destruction from world trade data does not yet have a rating. At this time, there are no reviews or comments for this scientific paper.
If you have personal experience with Empirical confirmation of creative destruction from world trade data, we encourage you to share that experience with our LandOfFree.com community. Your opinion is very important and Empirical confirmation of creative destruction from world trade data will most certainly appreciate the feedback.
Profile ID: LFWR-SCP-O-490069