The Endogeneity of the Natural Rate of Growth for a Selection of Asian Countries
AbstractThe 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. First a simple statistical technique is presented for estimating the natural rate of growth, and then it is shown 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 OECD and Latin American countries that the natural rate of growth is elastic to the actual rate of growth working through induced labour supply and productivity growth. Demand matters for economic growth.
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Bibliographic InfoPaper provided by Department of Economics, University of Kent in its series Studies in Economics with number 1006.
Date of creation: Aug 2010
Date of revision:
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Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP
Phone: +44 (0)1227 764000
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Web page: http://www.ukc.ac.uk/economics/
Other versions of this item:
- Mark Dray & A. P. Thirlwall, 2011. "The endogeneity of the natural rate of growth for a selection of Asian countries," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 33(3), pages 451-468, April.
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
- O5 - Economic Development, Technological Change, and Growth - - Economywide Country Studies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-08-14 (All new papers)
- NEP-DGE-2010-08-14 (Dynamic General Equilibrium)
- NEP-PKE-2010-08-14 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Miguel A. LeÛn-Ledesma & A. P. Thirlwall, 2002.
"The endogeneity of the natural rate of growth,"
Cambridge Journal of Economics,
Oxford University Press, vol. 26(4), pages 441-459, July.
- A. P. Thirlwall, 2011.
"Balance of Payments Constrained Growth Models: History and Overview,"
Studies in Economics
1111, Department of Economics, University of Kent.
- Anthony P. Thirlwall, 2011. "Balance of payments constrained growth models: history and overview," PSL Quarterly Review, Economia civile, vol. 64(259), pages 307-351.
- 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.
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