Complexity as Interdependence in Input–Output Systems

Abstract

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.