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The sources of long-term economic growth in Indonesia, 1880-2008

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  • van der Eng, Pierre

Abstract

This paper presents new time series estimates of GDP, capital stock and education-adjusted employment, and uses a growth accounting approach to analyze GDP growth during 1880-2008. The growth of capital stock, employment and educational attainment explained almost all of GDP growth. During key growth periods 1900-29 and 1975-97, Total Factor Productivity (TFP) growth was on balance negative. TFP growth was substantial during some sub-periods, particularly 1933-41, 1951-61, 1967-74 and 2000-08. Each followed a major economic downturn that slowed capital stock growth and required a more efficient use of productive resources, supported by changes in economic policy that enhanced productivity and efficiency.

Suggested Citation

  • van der Eng, Pierre, 2010. "The sources of long-term economic growth in Indonesia, 1880-2008," Explorations in Economic History, Elsevier, vol. 47(3), pages 294-309, July.
  • Handle: RePEc:eee:exehis:v:47:y:2010:i:3:p:294-309
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    References listed on IDEAS

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    1. Pierre van der Eng, 2009. "Capital formation and capital stock in Indonesia, 1950-2008," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 45(3), pages 345-371.
    2. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-698, June.
    3. Young, Alwyn, 1994. "Accumulation, exports, and growth in the high performing Asian economies : A comment," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 40(1), pages 237-250, June.
    4. Scott L. Baier & Gerald P. Dwyer & Robert Tamura, 2006. "How Important are Capital and Total Factor Productivity for Economic Growth?," Economic Inquiry, Western Economic Association International, vol. 44(1), pages 23-49, January.
    5. P. Nandalal Weerasinghe & George Fane, 2005. "Accounting For Discrepancies Among Estimates Of Tfp Growth In East Asia," Economic Papers, The Economic Society of Australia, vol. 24(3), pages 280-293, September.
    6. Virginie Vial, 2006. "New Estimates Of Total Factor Productivity Growth In Indonesian Manufacturing," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 42(3), pages 357-369.
    7. Pierre van der Eng, 1999. "Some Obscurities in Indonesia's New National Accounts," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(2), pages 91-106.
    8. Marcel Timmer, 1999. "Indonesia's Ascent on the Technology Ladder: Capital Stock and Total Factor Productivity in Indonesian Manufacturing, 1975-95," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 35(1), pages 75-97.
    9. Jesus Felipe, 1999. "Total factor productivity growth in East Asia: A critical survey," Journal of Development Studies, Taylor & Francis Journals, vol. 35(4), pages 1-41.
    10. H. Aswicahyono & H. Hill, 2002. "'Perspiration' vs 'Inspiration' in Asian Industrialisation: Indonesia Before the Crisis," Journal of Development Studies, Taylor & Francis Journals, vol. 38(3), pages 138-163.
    11. Susan M. Collins & Barry P. Bosworth, 1996. "Economic Growth in East Asia: Accumulation versus Assimilation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(2), pages 135-204.
    12. Drysdale, Peter & Huang, Yiping, 1997. "Technological Catch-up and Economic Growth in East Asia and the Pacific," The Economic Record, The Economic Society of Australia, vol. 73(222), pages 201-211, September.
    13. Prados de la Escosura, Leandro & Rosés, Joan R., 2003. "Wages and labor income in history : a survey," IFCS - Working Papers in Economic History.WH wh031006, Universidad Carlos III de Madrid. Instituto Figuerola.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Inequality: should developing countries be worried? An interview with Andrew Leigh MP
      by Jonathan Pryke in Development Policy Blog on 2014-07-24 01:00:08

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    Cited by:

    1. Liu, Dan & Meissner, Christopher M., 2015. "Market potential and the rise of US productivity leadership," Journal of International Economics, Elsevier, vol. 96(1), pages 72-87.
    2. Shi Zhihong Yuping & Xuyi & Ni Yuping & Bas van Leeuwen, 2015. "Chinese National Income, ca. 1661-1933," Working Papers 0062, Utrecht University, Centre for Global Economic History.
    3. Jeffrey G. Williamson, 2011. "Industrial Catching Up in the Poor Periphery 1870-1975," NBER Working Papers 16809, National Bureau of Economic Research, Inc.
    4. Booth, Anne & Deng, Kent, 2016. "Japanese colonialism in comparative perspective," Economic History Working Papers 68883, London School of Economics and Political Science, Department of Economic History.
    5. Eng, Pierre van der, 2014. "Mining and Indonesia’s Economy: Institutions and Value Adding, 1870-2010," PRIMCED Discussion Paper Series 57, Institute of Economic Research, Hitotsubashi University.
    6. Williamson, Jeffrey G, 2011. "Industrial Catching Up in the Poor Periphery 1870-1975," CEPR Discussion Papers 8335, C.E.P.R. Discussion Papers.
    7. repec:bla:ozechr:v:57:y:2017:i:3:p:368-393 is not listed on IDEAS
    8. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
    9. Agustín S. Bénétrix & Kevin H. O’Rourke & Jeffrey G. Williamson, 2012. "The Spread of Manufacturing to the Periphery 1870-2007: Eight Stylized Facts," Working Papers 0021, European Historical Economics Society (EHES).
    10. Angus Maddison & Pierre van der Eng, 2013. "Asia's role in the global economy in historical perspective," CEH Discussion Papers 021, Centre for Economic History, Research School of Economics, Australian National University.

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