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The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience

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  • Alwyn Young
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    Abstract

    This paper documents the fundamental role played by factor accumulation in explaining the extraordinary postwar growth of Hong Kong, Singapore, South Korea and Taiwan. Participation rates, educational levels and (with the exception of Hong Kong) investment rates have risen rapidly in all four economies. In addition, there have been large intersectoral reallocations of labour, with (again, excepting Hong Kong) non-agricultural and manufacturing employment growing one and a half to two times as fast as the aggregate working population. Thus, while the growth of output per capita in these economies has averaged 6% to 7% per annum over the past two and a half decades, the growth of output per effective worker in the non- agricultural sector of these economies has been only 3% to 4% per annum. If one then allows for the doubling, tripling and even quadrupling of the investment to GDP ratio in these economies, one arrives at total factor productivity growth rates, both for the non- agricultural economy and for manufacturing in particular, which are well within the bounds of those experienced by the OECD and Latin American economies over equally long periods of time. While the growth of output and manufacturing exports in the newly industrializing economies of East Asia is virtually unprecedented, the growth of total factor productivity in these economies is not.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4680.

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    Date of creation: Mar 1994
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    Publication status: published as Quarterly Journal of Economics, Vol.110 (August 1995), pp.641-680.
    Handle: RePEc:nbr:nberwo:4680

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    1. Dollar, David & Sokoloff, Kenneth, 1990. "Patterns of productivity growth in South Korean manufacturing industries, 1963-1979," Journal of Development Economics, Elsevier, vol. 33(2), pages 309-327, October.
    2. Christensen, Laurits R. & Cummings, Dianne, 1981. "Real product, real factor input, and productivity in the Republic of Korea, 1960-1973," Journal of Development Economics, Elsevier, vol. 8(3), pages 285-302, June.
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    Cited by:
    1. Alan M. Taylor, 1995. "Growth and Convergence in the Asia-Pacific Region: On the Role of Openness, Trade and Migration," NBER Working Papers 5276, National Bureau of Economic Research, Inc.
    2. Ghosh Madanmohan & John Whalley, 2000. "State-Owned Enterprises, Shirking and Trade Liberalization," CESifo Working Paper Series 300, CESifo Group Munich.
    3. Luis Gutierrez & Carlos Pombo, 2004. "Firm entry, productivity differentials and turnovers in import substituting markets: a study of the petrochemical industry in Colombia," BORRADORES DE INVESTIGACIÓN 002728, UNIVERSIDAD DEL ROSARIO.
    4. Lin, T. -C., 2003. "Education, technical progress, and economic growth: the case of Taiwan," Economics of Education Review, Elsevier, vol. 22(2), pages 213-220, April.
    5. Dedák, István, 2000. "A gazdasági felzárkózás növekedéselméleti összefüggései
      [The growth-theory aspects of economic catch-up]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 411-430.
    6. Jong-Wha Lee, 1997. "Economic Growth and Human Development in the Republic of Korea," Human Development Occasional Papers (1992-2007) HDOCPA-1997-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
    7. Sebastian Edwards, 1996. "Public Sector Deficits and Macroeconomic Stability in Developing Countries," NBER Working Papers 5407, National Bureau of Economic Research, Inc.
    8. Michael Sarel, 1995. "Growth in East Asia: What We Can and What We Cannot Infer From It," RBA Annual Conference Volume, in: Palle Andersen & Jacqueline Dwyer & David Gruen (ed.), Productivity and Growth Reserve Bank of Australia.
    9. Douglas Gollin, 2002. "Getting Income Shares Right," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 458-474, April.
    10. Michaelides, Panayotis & Milios, John, 2009. "TFP change, output gap and inflation in the Russian Federation (1994-2006)," Journal of Economics and Business, Elsevier, vol. 61(4), pages 339-352, July.
    11. Wong Fot Chyi, 1995. "Discussion of 'Growth in East Asia: What We Can and What We Cannot Infer From It' and 'The Growth Experience of Japan - What Lessons to Draw?'," RBA Annual Conference Volume, in: Palle Andersen & Jacqueline Dwyer & David Gruen (ed.), Productivity and Growth Reserve Bank of Australia.
    12. Athena Belegri-Roboli & Panayotis Michaelides, 2006. "Measuring Technological Change in Greece," The Journal of Technology Transfer, Springer, vol. 31(6), pages 663-671, November.
    13. Sebastian Edwards, 1995. "Public sector deficits and macroeconomic stability in developing economies," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 307-373.
    14. Branko Milanovic, 2005. "Inequality And Determinants Of Earnings In Malaysia, 1984-97," Development and Comp Systems 0503007, EconWPA.
    15. M. Nerlove & S. Yamashige & L. Magnusson & R. Baldwin & M. Ricketts & W. Güth & M. Beckmann, 1997. "Book reviews," Journal of Economics, Springer, vol. 65(2), pages 217-234, June.
    16. Ibrahim A. Elbadawi & Francis M. Mwega, 2000. "Can Africa's Saving Collapse Be Reversed?," World Bank Economic Review, World Bank Group, vol. 14(3), pages 415-443, September.
    17. V. V. Chari & Patrick J. Kehoe & Ellen R. McGrattan, 1997. "The poverty of nations: a quantitative exploration," Staff Report 204, Federal Reserve Bank of Minneapolis.
    18. Bloom, David E & Williamson, Jeffrey G, 1998. "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review, World Bank Group, vol. 12(3), pages 419-55, September.
    19. Sebastian Edwards, 1995. "Why are Saving Rates so Different Across Countries?: An International Comparative Analysis," NBER Working Papers 5097, National Bureau of Economic Research, Inc.

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