% WARNING: This file may contain UTF-8 (unicode) characters. % While non-8-bit characters are officially unsupported in BibTeX, you % can use them with the biber backend of biblatex % usepackage[backend=biber]{biblatex} @techreport{NBERw8952, title = "Economic Development as Self-Discovery", author = "Hausmann, Ricardo and Rodrik, Dani", institution = "National Bureau of Economic Research", type = "Working Paper", series = "Working Paper Series", number = "8952", year = "2002", month = "May", doi = {10.3386/w8952}, URL = "http://www.nber.org/papers/w8952", abstract = {In the presence of uncertainty about what a country can be good at producing, there can be great social value to discovering costs of domestic activities because such discoveries can be easily imitated. We develop a general-equilibrium framework for a small open economy to clarify the analytical and normative issues. We highlight two failures of the laissez-faire outcome: there is too little investment and entrepreneurship ex ante, and too much production diversification ex post. Optimal policy consists of counteracting these distortions: to encourage investments in the modern sector ex ante, but to rationalize production ex post. We provide some informal evidence on the building blocks of our model.}, }