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Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis


  • Gregory C. Chow

    (Princeton University)


This paper provides a statistical summary of aggregate economic growth in Taiwan and mainland China using the standard national income accounting framework by decomposing aggregate growth into components due to growths in capital, labor and total factor productivity. For Taiwan, new series of capital stock and of human capital are constructed. The major findings include (a) the stability of input coefficients (under the assumption of constant returns) and of the rate of increase in TFP for the entire period 1951-1999, (b) a labor exponent of about 0.7 and a rate of annual increase in TFP of about 0.03, and (c) a slower exponential rate of growth of real gdp since 1987 to about 0.065 from the 1951-1999 average of 0.081 mainly as a result of the large reduction in the growth rate of labor input to half. For mainland China, a capital stock series of Chow (1993) was extended to 1998. The major findings include (a) the stability of the relative input coefficients for the entire period 1952-1998 but TFP did not increase until 1979, (b) a labor exponent of about 0.35 and a rate of increase in TFP of about 0.027 after 1979, and (c) the absence of equally large reduction in the rate of increase in labor input as in Taiwan and the smaller exponent of labor leading to a prospect of only a moderate reduction in future growth rate.

Suggested Citation

  • Gregory C. Chow, 2003. "Accounting for Economic Growth in Taiwan and Mainland China: A Comparative Analysis," GE, Growth, Math methods 0306003, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpge:0306003
    Note: 26 pages.

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    References listed on IDEAS

    1. Kim Jong-Il & Lau Lawrence J., 1994. "The Sources of Economic Growth of the East Asian Newly Industrialized Countries," Journal of the Japanese and International Economies, Elsevier, vol. 8(3), pages 235-271, September.
    2. Gregory C. Chow, 1993. "Capital Formation and Economic Growth in China," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 809-842.
    3. Alwyn Young, 1995. "The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 641-680.
    4. 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.
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    Cited by:

    1. WHALLEY, John & XIN, Xian, 2010. "China's FDI and non-FDI economies and the sustainability of future high Chinese growth," China Economic Review, Elsevier, vol. 21(1), pages 123-135, March.

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    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • D5 - Microeconomics - - General Equilibrium and Disequilibrium
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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