As the non-tradable input product set demanded by product production, the increase of national capacity is not only conducive to economic output growth but also can enhance the stability of supply and demand in economic system, and furthermore, the increase of export sophistication can reduce the supply volatility. The degree of export sophistication can reflect the extent of a country’s capacity, as a result, the increase of export sophistication can reduce supply volatility, demand volatility and output volatility. Analysis of 178 sample countries from 1998 to 2017 finds that the increase of export sophistication has significantly inhibitory effect on the volatility of total economic output growth and manufacturing industry output growth, but the inhibitory effect is different in different countries, which is significant only in high-income and middle-income countries. The inhibition effect on the volatility of manufacturing industry output growth is bigger in low-income countries. Further intermediary effect tests show that the increased export complexity can reduce total economic output growth volatility by restraining supply volatility and demand volatility. We should use the institutional advantages of the socialism with Chinese characteristics to form and strengthen unique capacity, deepen market economy system reform to improve all kinds of capacities, push forward the modernization of national governance system and governance capacity to improve capacity combination efficiency, further improve national capacity systemization to boost the high quality development of domestic circulation, improve export sophistication and realize sustainable and stable economic growth and the interactive promotion between domestic and international circulation.