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Decomposing and Analyzing Korea’s Declining GDP Growth: Some Cautions and Suggestions


  • Sumner La Croix

    () (Department of Economics, University of Hawaii at Manoa)


Chin Hee Hahn and Sukha Shin (2007) have developed new decompositions of Korean economic growth from 1990 to 2004. They find that Korea’s declining GDP growth has been accompanied by a sharp decline in capital deepening and an increase in total factor productivity. By contrast, Jorgenson and Vu’s (2007) decompositions of Korea’s GDP growth find that total factor productivity decreased over this period. This paper compares the two decompositions; evaluates Hahn and Shin’s hypothesis that competition from Chinese imports may be driving the decline in GDP growth; and briefly presents four other candidates (decline in Korean savings, business cycle effects, weak IT investment, and regulatory and wealth redistribution initiatives) that could be partially responsible for the slowdown in Korean GDP growth.

Suggested Citation

  • Sumner La Croix, 2007. "Decomposing and Analyzing Korea’s Declining GDP Growth: Some Cautions and Suggestions," Working Papers 200721, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:200721

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    References listed on IDEAS

    1. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    2. Susanto Basu & John G. Fernald & Nicholas Oulton & Sylaja Srinivasan, 2003. "The Case of the Missing Productivity Growth: Or, Does Information Technology Explain why Productivity Accelerated in the US but not the UK?," NBER Working Papers 10010, National Bureau of Economic Research, Inc.
    3. Dale W. Jorgenson & Khuong Vu, 2007. "Information Technology and the World Growth Resurgence," German Economic Review, Verein für Socialpolitik, vol. 8, pages 125-145, May.
    4. Susanto Basu & John G. Fernald, 2008. "Information and communications technology as a general purpose technology: evidence from U.S. industry data," Economic Review, Federal Reserve Bank of San Francisco, pages 1-15.
    5. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
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    Cited by:

    1. Kim, Sangho & Lim, Hyunjoon & Park, Donghyun, 2010. "Productivity and Employment in a Developing Country: Some Evidence from Korea," World Development, Elsevier, vol. 38(4), pages 514-522, April.
    2. Ahmad Jafari Samimi & Yosof Essazadeh Roshan, 2012. "The Impact of ICT Shocks on Business Cycle Some Evidence from Iran," Iranian Economic Review, Economics faculty of Tehran university, vol. 17(1), pages 123-145, winter.

    More about this item


    GDP; TFP; China; Korea; capital; labor; decomposition; productivity.;

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