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Economic growth in Asia: Determinants and prospects

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  • Lee, Jong-Wha
  • Hong, Kiseok

Abstract

Using a growth accounting framework, we find that developing Asia grew rapidly over the past three decades mainly due to robust growth in capital accumulation. The contributions of education and total factor productivity in the region's past economic growth remain relatively limited. We also make long-run growth projections for developing Asia by combining the growth accounting framework with growth regression approach. Our baseline projections based on the model of conditional convergence show that the gross domestic product (GDP) growth rates of the 12 developing Asian economies covered by this paper will be consistently lower for the next two decades than their historical performance. However, policy reforms in education, property rights, and research and development can substantially raise GDP growth in the region and partly offset the slowdown in growth caused by the convergence phenomenon. Even under the baseline scenario, the region's share in the world economy will increase from the current 34 percent in 2009 to close to a half in 2030.

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Bibliographic Info

Article provided by Elsevier in its journal Japan and the World Economy.

Volume (Year): 24 (2012)
Issue (Month): 2 ()
Pages: 101-113

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Handle: RePEc:eee:japwor:v:24:y:2012:i:2:p:101-113

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Web page: http://www.elsevier.com/locate/inca/505557

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Keywords: Economic growth; Growth accounting; Capital accumulation; Human capital; Total factor productivity;

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Citations

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Cited by:
  1. Barry Eichengreen & Donghyun Park & Kwanho Shin, 2012. "When Fast-Growing Economies Slow Down: International Evidence and Implications for China," Asian Economic Papers, MIT Press, vol. 11(1), pages 42-87, February.
  2. Funke, Michael & Chen, Xi, 2012. "The dynamics of catch-up and skill and technology upgrading in China," BOFIT Discussion Papers 13/2012, Bank of Finland, Institute for Economies in Transition.
  3. Scott Bowman & Patrick Conway, 2013. "China’s recent growth and its impact on the New Zealand economy," Treasury Working Paper Series 13/15, New Zealand Treasury.
  4. Park, Jungsoo, 2012. "Total factor productivity growth for 12 Asian economies: The past and the future," Japan and the World Economy, Elsevier, vol. 24(2), pages 114-127.
  5. Ettore Dorrucci & Gabor Pula & Daniel Santabárbara, 2013. "China’s economic growth and rebalancing," Banco de Espa�a Occasional Papers 1301, Banco de Espa�a.
  6. Dennis Tao Yang & Junsen Zhang & Shaojie Zhou, 2010. "Why are Saving Rates so High in China?," Working Papers 312010, Hong Kong Institute for Monetary Research.
  7. Athukorala, Prema-chandra, 2012. "Asian trade flows: Trends, patterns and prospects," Japan and the World Economy, Elsevier, vol. 24(2), pages 150-162.
  8. Charles Yuji Horioka & Akiko Terada-Hagiwara, 2011. "The Determinants and Long-term Projections of Saving Rates in Developing Asia," NBER Working Papers 17581, National Bureau of Economic Research, Inc.
  9. Molinari, Benedetto & Rodríguez, Jesús & Torres, José L., 2013. "Growth and technological progress in selected Pacific countries," Japan and the World Economy, Elsevier, vol. 28(C), pages 60-71.
  10. Scott Bowman & Patrick Conway, 2013. "The Outlook for China’s Growth and its Impact on New Zealand Exports," Treasury Working Paper Series 13/16, New Zealand Treasury.
  11. Shioji, Etsuro & Vu, Tuan Khai, 2012. "Physical capital accumulation in Asia 12: Past trends and future projections," Japan and the World Economy, Elsevier, vol. 24(2), pages 138-149.
  12. Petri, Peter A. & Zhai, Fan, 2013. "Navigating a Changing World Economy: ASEAN, the People’s Republic of China, and India," ADBI Working Papers 404, Asian Development Bank Institute.

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