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Economic growth in Asia: Determinants and prospects

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  • Lee, Jong-Wha
  • Hong, Kiseok

Abstract

Using a growth accounting framework, we find that developing Asia grew rapidly over the past three decades mainly due to robust growth in capital accumulation. The contributions of education and total factor productivity in the region's past economic growth remain relatively limited. We also make long-run growth projections for developing Asia by combining the growth accounting framework with growth regression approach. Our baseline projections based on the model of conditional convergence show that the gross domestic product (GDP) growth rates of the 12 developing Asian economies covered by this paper will be consistently lower for the next two decades than their historical performance. However, policy reforms in education, property rights, and research and development can substantially raise GDP growth in the region and partly offset the slowdown in growth caused by the convergence phenomenon. Even under the baseline scenario, the region's share in the world economy will increase from the current 34 percent in 2009 to close to a half in 2030.

Suggested Citation

  • Lee, Jong-Wha & Hong, Kiseok, 2012. "Economic growth in Asia: Determinants and prospects," Japan and the World Economy, Elsevier, vol. 24(2), pages 101-113.
  • Handle: RePEc:eee:japwor:v:24:y:2012:i:2:p:101-113
    DOI: 10.1016/j.japwor.2012.01.005
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    More about this item

    Keywords

    Economic growth; Growth accounting; Capital accumulation; Human capital; Total factor productivity;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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