It’s not every day that jumping monkeys and George Clooney are discussed in the context of a framework for development economics. But that’s exactly what happened on March 6 when Justin Yifu Lin presented his book, ‘New Structural Economics: A framework for Rethinking Development Policy’, with Regional Chief Economist for Africa Shanta Devarajan moderating and Harvard Professor Ricardo Hausmann providing a lively counterpoint as discussant. Justin made an impassioned case for how industrial structure is endogenous to endowment structure, arguing that following comparative advantage and involving the state as a facilitator can be the ticket to income growth and poverty reduction. Hausmann argued that comparative advantage is not determined by an economy’s broad endowment of factors, but by what you know how to do. He also argued that imitation (for example, if George Clooney wears a brand of cologne, other men would wear it too) and moving preferentially towards nearby goods (the jumping monkey analogy) are powerful drivers of innovation and success in industry. Watch the video to get the full narrative or download the Powerpoints here.
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