A native of Santiago de Chile, Hidalgo holds a PhD in physics from the University of Notre Dame and a bachelor's degree in physics from the Pontificia Universidad Catolica de Chile. Before joining MIT, César A. Hidalgo was an adjunct lecturer in public policy at Harvard's John F. Kennedy School of Government, and a research fellow at Harvard's Center for International Development. He works as an assistant professor at the MIT Media Lab, and faculty associate at Harvard University's Center for International Development. He took the unusual career path, being one of the two new assistant professors to join the Media Lab. He is also a graphic-art enthusiast and has published and exhibited artwork that uses data collected originally for scientific purposes. He holds a PhD in physics from the University of Notre Dame and a bachelor's degree in physics from the Pontificia Universidad Catolica de Chile. He considers as one of his heroes the 16th-century English statesman, philosopher, lawyer and essayist generally credited with inventing the scientific method, Francis Bacon. And it’s the breadth of Bacon’s intellectual appetite that Hidalgo finds inspiring.
Hidalgo's work focuses on improving the understanding of systems by using and developing concepts of complexity, evolution, and network science. His goal is to help improve understanding of the evolution of prosperity in order to help develop industrial policies that can help countries raise the living standards of their citizens. His areas of application include economic development, systems biology, and social systems.
Recently, in his PhD thesis, Hidalgo applied mathematical tools largely derived from statistical physics to problems in economics. Because of him, we can now visualize the differences between national economies in new ways. Hidalgo is a statistical physicist fascinated by the structure of networks, and along with the Harvard economist Ricardo Hausmann, he has been developing tools designed to study not just economic wealth but also economic structure and sophistication. Hidalgo and Hausmann think of economies as collections of "capabilities" that can be combined in different ways like an Erector set to produce different products. Because these capabilities cannot be easily identified and observed, Hausmann and Hidalgo track the silhouettes that the capabilities cast upon trade statistics. If a product is a significant part of a country's exports, it offers evidence that the country has certain kinds of related capabilities.
Hidalgo and Hausmann argue that the diversity of a country’s production capacity, and thus the true strength of its economy, depends on the diversity of both its outputs and its inputs. Two countries could export the same number of products — they could have the same diversity of outputs. And the country with more inputs, the researchers claim, will adapt better to a changing world economy.
On this matter, Hidalgo uses his mathematical tools. He assumes that products that require a lot of inputs are scarcer than those that don’t. More countries export lumber than export digital-signal-processing chips. By analyzing both the diversity of a country’s products and the number of other countries capable of producing the same products, Hidalgo is able to quantitatively assess the diversity of the country’s inputs.
Hidalgo, together with Hausmann have found that GDP correlates well with diversity of outputs, but it correlates much better with diversity of inputs. And the cases where the correlation breaks down could actually be more interesting than the cases where it holds, because they could indicate economies poised for growth.
Through the works of Hidalgo, we are able to understand the diversification of outputs and inputs better. From this, we can easily assess the almost impossible task of categorizing inputs. He was able to apply his knowledge, experience and expertise in statistical physics in solving economic problems. He was able to conclude that different countries will adapt to a changing world economy if they would learn how to increase and diversify their inputs, thus competing with different countries that produce the same products as theirs.
He was also able to find a correlation between GDP and diversity of outputs but he found out that GDP correlates more with the diversity of inputs. The more diversified the inputs are, the higher the GDP in the long run. In 1970, for instance, the Korean economy had much greater diversity of inputs, according to Hidalgo’s measure, than the Peruvian economy, but Peru had twice Korea’s GDP per capita. Over the next 30 years, the relative diversity of inputs in the two countries’ economies stayed more or less the same, but by 2003, Korea had four times Peru’s GDP per capita.
Cesar Hidalgo's contribution to economics which argues that the best predictor of a country’s future economic health is not the magnitude but the diversity of its production capacity. Because of this findings, a country can increase its adaptation capability in a complex and dynamic global economy. If such country would be able to adapt to the changes, they can easily follow whatever the trend in global economy is. Thus, a country can predict its economic health that will lead to the prosperity of that country.
The group affirms this study of Hidalgo. Different countries must learn how to be globally competitive. They must know how to diversify the inputs they use to produce their products. And if the greater the diversity of inputs, the higher the GDP will be in the long run. The higher the GDP the higher the economic growth of the country, that will make them, globally competitive.
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