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The sources of long-term economic growth in Indonesia, 1880-2007

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Author Info
Pierre van der Eng ()

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Abstract

This paper initiates discussion about the contribution of Total Factor Productivity (TFP) growth to Indonesia’s long-term economic growth. It presents new time series estimates of GDP, capital stock and education-adjusted employment, and offers a growth accounting approach that estimates the contribution of conventional factor inputs to GDP growth during 1880-2007. For most of the period, the growth of employment, educational attainment and particularly capital stock explained almost all of long-term output growth, and TFP growth was marginal. During the key growth periods 1900-29 and 1967-97, TFP growth was on balance negative, respectively marginally positive. However, the contribution of TFP growth was substantial during some sub-periods, particularly 1933-41, 1951-61, 1967-73 and 2000-07. Each of these followed a major economic downturn that slowed capital stock growth and required a more efficient use of productive resources, assisted by changes in economic policy and institutions that enhanced productivity and efficiency.

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Paper provided by Australian National University, College of Business and Economics, School of Economics in its series ANUCBE School of Economics Working Papers with number 2008-499.

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Length: 35 Pages
Date of creation: Dec 2008
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Handle: RePEc:acb:cbeeco:2008-499

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Find related papers by JEL classification:
N15 - Economic History - - Macroeconomics and Monetary Economics; Growth and Fluctuations - - - Asia including Middle East
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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This page was last updated on 2008-12-29.

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