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Variety Expansion and Sustainable Growth in East Asia

Author

Listed:
  • Se-Jik Kim

    (International Monetary Fund)

  • Yong-Jin Kim
  • Jong-Wha Lee

Abstract

This paper presents an endogenous growth model in which a sustained long-term growth can be achieved by a continuous expansion of varieties of goods despite Neo-classical diminishing returns in capital and no productivity-augmenting technological progress. The model contrasts the existing endogenous growth models of the product-varieties expansion by emphasizing that the introduction of new final goods occurs by raising capital accumulation rather than productivity growth. The model may well explain the coexistence of rapid introduction of new goods, high investment ratios, high income growth, and high welfare, even with a low growth rate of total factor productivity as we observe from the experience of the fast growing countries in East Asia.

Suggested Citation

  • Se-Jik Kim & Yong-Jin Kim & Jong-Wha Lee, 2001. "Variety Expansion and Sustainable Growth in East Asia," Korean Economic Review, Korean Economic Association, vol. 17, pages 183-205.
    • Handle: RePEc:kea:keappr:ker-200112-17-2-01
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    More about this item

    Keywords

    variety expansion; capital accumulation; East Asia;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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