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Real GDP in Pre-War East Asia: A 1934-36 Benchmark Purchasing Power Parity Comparison with the U.S


  • Kyoji Fukao
  • Debin Ma
  • Tangjun Yuan


This article provides estimates of purchasing power parity (PPP) converters for expenditure side GDP of Japan/China and Japan/U.S through a detailed matching of prices for more than 50 types of goods and services in private consumption and about 20 items or sectors for investment and government expenditure. Based on our finding and linking with the earlier studies on the relative price levels of Taiwan and Korea, we derive the mid-1930s benchmark PPP adjusted per capita income of Japan, China, Taiwan and Korea at 31%, 10%, 23%, and 12% of the U.S. level respectively for the mid-1930s. These estimates corrected the consistent downward bias in East Asian income levels based on market exchange rate conversions. While confirming Angus Maddison's estimates for China and Taiwan based on the 1990 benchmark back-projection method, they do point to a 23% and 85% overestimate in his comparable figures for Japan and Korea respectively for the mid-1930s period. This article develops a preliminary theoretical and empirical framework to demonstrate the possible source of the biases in the back-projection method. We briefly discuss the implications of our findings on the initial conditions and long-term growth dynamics in East Asia and beyond.

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  • Kyoji Fukao & Debin Ma & Tangjun Yuan, 2006. "Real GDP in Pre-War East Asia: A 1934-36 Benchmark Purchasing Power Parity Comparison with the U.S," Hi-Stat Discussion Paper Series d05-132, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hst:hstdps:d05-132

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    References listed on IDEAS

    1. Godo, Yoshihisa & Hayami, Yujiro, 2002. "Catching Up in Education in the Economic Catch-Up of Japan with the United States, 1890-1990," Economic Development and Cultural Change, University of Chicago Press, vol. 50(4), pages 961-978, July.
    2. Yuan, Tangjun & Fukao, Kyoji, 2002. "The Purchasing Power Parity of Japan, Korea and Taiwan in the 1930s―An International Comparison of Real Consumption―," Economic Review, Hitotsubashi University, vol. 53(4), pages 322-336, January.
    3. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
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    Cited by:

    1. Jean-Pascal Bassino & Kyoji Fukao & Ralph Paprzycki & Tokihiko Settsu & Tangjun Yuan, 2010. "Regional Inequality and Industrial Structures in Pre-War Japan: An Analysis Based on New Prefectural GDP Estimates," Global COE Hi-Stat Discussion Paper Series gd10-138, Institute of Economic Research, Hitotsubashi University.
    2. Kyoji Fukao & Harry X. Wu & Tangjun Yuan, 2008. "Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach," Global COE Hi-Stat Discussion Paper Series gd08-018, Institute of Economic Research, Hitotsubashi University.
    3. Baten, Joerg & Ma, Debin & Morgan, Stephen & Wang, Qing, 2010. "Evolution of living standards and human capital in China in the 18-20th centuries: Evidences from real wages, age-heaping, and anthropometrics," Explorations in Economic History, Elsevier, vol. 47(3), pages 347-359, July.
    4. Baten, Joerg & Ma, Debin & Morgan, Stephen & Wang, Qing, 2009. "Evolution of living standards and human capital in China in 18-20th century: evidences from real wage and anthropometrics," Economic History Working Papers 27870, London School of Economics and Political Science, Department of Economic History.
    5. Myung Soo Cha, 2012. "Wage Convergence and Divergence in East Asia, 1900-39," Global COE Hi-Stat Discussion Paper Series gd12-253, Institute of Economic Research, Hitotsubashi University.
    6. repec:dgr:rugggd:gd-113 is not listed on IDEAS
    7. Michael Artis & Toshihiro Okubo, 2011. "Does International Trade Really Lead To Business Cycle Synchronization?—A Panel Data Approach," Manchester School, University of Manchester, vol. 79(2), pages 318-332, March.
    8. Lee, Hun-Chang, 2007. "When and how did Japan catch up with Korea?: A comparative study of the pre-industrial economies of Korea and Japan," CEI Working Paper Series 2006-15, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    9. Ward, Marianne & Devereux, John, 2012. "The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective," The Journal of Economic History, Cambridge University Press, vol. 72(01), pages 104-132, March.
    10. Baten, Joerg & Pelger, Ines & Twrdek, Linda, 2009. "The anthropometric history of Argentina, Brazil and Peru during the 19th and early 20th century," Economics & Human Biology, Elsevier, vol. 7(3), pages 319-333, December.
    11. Yuan, Tangjun & Fukao, Kyoji & Wu, Harry X., 2010. "Comparative output and labor productivity in manufacturing between China, Japan, Korea and the United States for ca. 1935 - A production-side PPP approach," Explorations in Economic History, Elsevier, vol. 47(3), pages 325-346, July.
    12. repec:dgr:rugggd:gd-140 is not listed on IDEAS
    13. MA, Ye & JONG, Herman de, 2016. "Unfolding the Turbulent Century: A Reconstruction of China's Economic Development, 1840-1912," Discussion paper series HIAS-E-29, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    14. Broadberry, Stephen & Fukao, Kyoji & Zammit, Nick, 2015. "How Did Japan Catch-up On The West? A Sectoral Analysis Of Anglo-Japanese Productivity Differences, 1885-2000," CAGE Online Working Paper Series 231, Competitive Advantage in the Global Economy (CAGE).
    15. Woltjer, P. & Smits, Jan-Pieter & Frankema, Ewout, 2010. "Comparing Productivity in the Netherlands, France, UK and US, ca. 1910:A new PPP benchmark and its implications for changing economic leadership," GGDC Research Memorandum GD-113, Groningen Growth and Development Centre, University of Groningen.

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