We present a novel argument demonstrating that when trade is characterized by uncertainty the comparative advantages doctrine is misleading and a positive level of diversification is growth enhancing. Applying a result developed in the mathematical biological literature, we show that, in...

Countries differ in terms of technological capabilities and complexity of production structures. According to that, countries may follow different development strategies: one based on extracting rents from abundant endowments, such as labor or natural resources, and the other focused on creating...