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New Technology, Human Capital, Total Factor Productivity and Growth Process for Developing

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  • Cuong Le Van

    (Centre d'Economie de la Sorbonne, Universite Paris-1, France)

  • Tu-Anh Nguyen

    (Centre d'Economie de la Sorbonne, Universite Paris-1, France)

Abstract

Solowian view on miracle growth rate in NIEs as a result of productivity growth whereas many others (e.g. Krugman [1997]) convince that broad capital accumulation is only true engine underlying NIEs growth. Krugman's view is correct in the short and mid terms, however in the long term, TFP is the main engine of growth. We show that the optimal strategy for a developing country consists of accumulating physical capital first and there is no research activity. When the country reaches a certain level of development, which is endogenously determined in the model, the technological progress may be generated. Three critical factors: the amount of available human capital; the relative price of technological capital; and the initial income of the economy.

Suggested Citation

  • Cuong Le Van & Tu-Anh Nguyen, 2008. "New Technology, Human Capital, Total Factor Productivity and Growth Process for Developing," Working Papers 26, Development and Policies Research Center (DEPOCEN), Vietnam.
    • Handle: RePEc:dpc:wpaper:2608
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    Keywords

    Optimal growth model; New technology capital; Human Capital; Developing country;
    All these keywords.

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