of development. We document the following regularities. First, as countries develop, their productive structure moves … from more volatile to less volatile sectors. Second, the level of specialization declines with development at early stages …, and slowly increases at later stages of development. Third, the volatility of country- specific macroeconomic shocks falls …

Economies at early stages of development are often shaken by abrupt changes in growth rates, whereas in advanced … the development process. We quantitatively asses the predictions of the model in light of the empirical evidence and find … that for reasonable parameter values, the model can generate a decline in volatility with the level of development …