IDEAS home Printed from https://ideas.repec.org/p/nst/samfok/2202.html
   My bibliography  Save this paper

International spillovers, productivity growth and openness in Thailand: An intertemporal general equilibrium analysis

Author

Listed:
  • Hildegunn Ekroll Stokke

    () (Department of Economics, Norwegian University of Science and Technology)

  • Jørn Rattsø

    () (Department of Economics, Norwegian University of Science and Technology)

  • Xinshen Diao

    (International Food Policy Research Institute, Washington DC)

Abstract

Thailand has experienced economic growth well above world averages for about 40 years. It is a challenge to understand the sources of this high growth path, and in particular why growth has not slowed down with assumed decreasing returns to capital. We develop an intertemporal general equilbrium model separating between agriculture and industry, and with open capital market and endogenous productivity growth to analyze the underlying adjustment mechanisms. Foreign technology spillover embodied in trade is assumed to be the driving force of the productivity growth, consistent with available econometric evidence. The high growth experience is understood as a transition path with interaction between productivity growth, openness and capital investment. Counterfactual analysis shows how protection may have had serious detrimental effect on growth rate due to productivity and investment slowdown. The role of relative prices in constraining growth is investigated, inspired by the Acemoglu-Ventura hypothesis of growth slowdown due to terms of trade effect. In our setting, low elasticity between domestic and exports goods in supply leads to large relative price shifts for domestic goods, but promotes investment and growth during transition.

Suggested Citation

  • Hildegunn Ekroll Stokke & Jørn Rattsø & Xinshen Diao, 2001. "International spillovers, productivity growth and openness in Thailand: An intertemporal general equilibrium analysis," Working Paper Series 2202, Department of Economics, Norwegian University of Science and Technology.
  • Handle: RePEc:nst:samfok:2202
    as

    Download full text from publisher

    File URL: http://www.svt.ntnu.no/iso/WP/2002/22xdjrhsjde.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eaton, Jonathan & Kortum, Samuel, 2001. "Trade in capital goods," European Economic Review, Elsevier, vol. 45(7), pages 1195-1235.
    2. Susanto Basu & David N. Weil, 1998. "Appropriate Technology and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1025-1054.
    3. Baldwin, Richard & Seghezza, Elena, 1996. "Trade-induced Investment-led Growth," CEPR Discussion Papers 1420, C.E.P.R. Discussion Papers.
    4. Young, Alwyn, 1994. "Lessons from the East Asian NICS: A contrarian view," European Economic Review, Elsevier, vol. 38(3-4), pages 964-973, April.
    5. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 563-606.
    6. Rauch, James E., 1997. "Balanced and unbalanced growth," Journal of Development Economics, Elsevier, vol. 53(1), pages 41-66, June.
    7. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    8. Daron Acemoglu & Jaume Ventura, 2002. "The World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 659-694.
    9. Edwards, Sebastian, 1998. "Openness, Productivity and Growth: What Do We Really Know?," Economic Journal, Royal Economic Society, vol. 108(447), pages 383-398, March.
    10. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    11. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation for Research in Economics, Yale University.
    12. Jaume Ventura, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 57-84.
    13. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    14. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    15. Seghezza, Elena & Baldwin, Richard E., 2008. "Testing for Trade-Induced Investment-Led Growth," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 61(2-3), pages 507-537.
    16. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
    17. Diao, Xinshen & Roe, Terry & Yeldan, Erinc, 1999. "Strategic policies and growth: an applied model of R&D-driven endogenous growth," Journal of Development Economics, Elsevier, vol. 60(2), pages 343-380, December.
    18. Oulton,Nicholas & O'Mahony,Mary, 1994. "Productivity and Growth," Cambridge Books, Cambridge University Press, number 9780521453455, May.
    19. Hildegunn Stokke, 2004. "Technology adoption and multiple growth paths: An intertemporal general equilibrium analysis of the catch-up process in Thailand," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(1), pages 80-109, March.
    20. Erik Offerdal & Kalpana Kochhar & Louis Dicks-Mireaux & Jianping Zhou & Mauro Mecagni & Balázs Horváth, 1996. "Thailand; The Road to Sustained Growth," IMF Occasional Papers 146, International Monetary Fund.
    21. Charles R. Hulten, 2001. "Total Factor Productivity: A Short Biography," NBER Chapters,in: New Developments in Productivity Analysis, pages 1-54 National Bureau of Economic Research, Inc.
    22. Parente, Stephen L & Prescott, Edward C, 1994. "Barriers to Technology Adoption and Development," Journal of Political Economy, University of Chicago Press, vol. 102(2), pages 298-321, April.
    23. Peter Klenow & Andrés Rodríguez-Clare, 1997. "The Neoclassical Revival in Growth Economics: Has It Gone Too Far?," NBER Chapters,in: NBER Macroeconomics Annual 1997, Volume 12, pages 73-114 National Bureau of Economic Research, Inc.
    24. Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
    25. Greenaway, David & Morgan, Wyn & Wright, Peter, 2002. "Trade liberalisation and growth in developing countries," Journal of Development Economics, Elsevier, vol. 67(1), pages 229-244, February.
    26. 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.
    27. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-570, August.
    28. Atkinson, Anthony B & Stiglitz, Joseph E, 1969. "A New View of Technological Change," Economic Journal, Royal Economic Society, vol. 79(315), pages 573-578, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    intertemporal growth modeling; endogenous productivity growth; foreign technology spillover; trade and growth; Thailand;

    JEL classification:

    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nst:samfok:2202. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hilde Saxi Gildberg). General contact details of provider: http://edirc.repec.org/data/isontno.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.