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Has the capital accumulation in the Asian miracle economies been fuelled by growth?

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  • Jakob B. Madsen
  • Iqtiar Mamun

Abstract

The Asian growth miracle is often attributed to factor accumulation under the implicit assumption that savings, broadly defined, have been high and increasing due to exogenous forces. Using data for India, Indonesia, Korea, Singapore and Taiwan over the period 1870--2011 this article examines the causal relationship between growth and saving. The response of growth to savings is first estimated using instruments to generate exogenous variation in savings rates. The residual variation in growth that is not driven by savings is then used as an instrument to estimate the effect of growth on savings. The estimates show that the spectacular saving rates in the Asian miracle economies have been fuelled by growth, and not the other way around.

Suggested Citation

  • Jakob B. Madsen & Iqtiar Mamun, 2016. "Has the capital accumulation in the Asian miracle economies been fuelled by growth?," Applied Economics, Taylor & Francis Journals, vol. 48(34), pages 3175-3194, July.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:34:p:3175-3194
    DOI: 10.1080/00036846.2015.1136398
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    References listed on IDEAS

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    1. Ichiro Sugimoto, 2011. "Economic Growth of Singapore in the Twentieth Century:Historical GDP Estimates and Empirical Investigations," World Scientific Books, World Scientific Publishing Co. Pte. Ltd., number 7858, January.
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    Cited by:

    1. Kelly B. Olds, 2018. "The Taiwan tea boom—a financial glut," Economic History Review, Economic History Society, vol. 71(4), pages 1227-1248, November.

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