The endogeneity of the natural rate of growth for a selection of Asian countries
AbstractThis paper questions the assumption in all of mainstream growth theory that the Harrod natural rate of growth is exogenously determined and independent of the pressure of demand in an economy. We first present a simple statistical technique for estimating the natural rate of growth, and then show how it is possible to test for its endogeneity. The model is applied to ten Asian countries, and the results support the conclusions from previous studies of Organisation for Economic Co-operation and Development and Latin American countries that the natural rate of growth is elastic to the actual rate of growth working through induced labor supply and productivity growth. Demand matters for economic growth.
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Bibliographic InfoArticle provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.
Volume (Year): 33 (2011)
Issue (Month): 3 (April)
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Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348
Asia; demand-led growth; endogenous labor supply; productivity growth;
Other versions of this item:
- Mark Dray & A.P. Thirlwall, 2010. "The Endogeneity of the Natural Rate of Growth for a Selection of Asian Countries," Studies in Economics 1006, Department of Economics, University of Kent.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
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- Miguel A. León-Ledesma & A. P. Thirlwall, 1998.
"The Endogeneity of the Natural Rate of Growth,"
Studies in Economics
9821, Department of Economics, University of Kent.
- Lanzafame, Matteo, 2011. "The balance of payments constrained growth rate and the natural rate of growth: new empirical evidence," MPRA Paper 33130, University Library of Munich, Germany.
- Anthony P. Thirlwall, 2011.
"Balance of payments constrained growth models: history and overview,"
PSL Quarterly Review,
Economia civile, vol. 64(259), pages 307-351.
- A. P. Thirlwall, 2011. "Balance of Payments Constrained Growth Models: History and Overview," Studies in Economics 1111, Department of Economics, University of Kent.
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