Panama s growth diagnostics

"The purpose of this paper is to analyze Panama s growth strategy in light of the growth diagnostics methodology (GDM) developed by Hausmann, Rodrik and Velasco (2004). A thorough application of GDM requires more data than is available for Panama, especially in terms of factor prices and business surveys. Even if formal testing is not always feasible, GDM provides a careful and organized discussion of all possible constrains on growth. In particular, the methodology is of great interest value to understand why other service-based economies -such as Hong Kong- have been more dynamic than Panama, and why some sectors have lagged within the country."