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Growth Accounts of the Asian Economies

Growth Accounts of the Asian Economies

Copyright: © 2014 |Pages: 43
ISBN13: 9781466658486|ISBN10: 1466658487|EISBN13: 9781466658493
DOI: 10.4018/978-1-4666-5848-6.ch006
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MLA

Rup Singh. "Growth Accounts of the Asian Economies." Bridging the Gap Between Growth Theory and Policy in Asia: An Extension of the Solow Growth Model, IGI Global, 2014, pp.142-184. https://doi.org/10.4018/978-1-4666-5848-6.ch006

APA

R. Singh (2014). Growth Accounts of the Asian Economies. IGI Global. https://doi.org/10.4018/978-1-4666-5848-6.ch006

Chicago

Rup Singh. "Growth Accounts of the Asian Economies." In Bridging the Gap Between Growth Theory and Policy in Asia: An Extension of the Solow Growth Model. Hershey, PA: IGI Global, 2014. https://doi.org/10.4018/978-1-4666-5848-6.ch006

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Abstract

This chapter develops the growth accounts of sampled Asian countries and confirms that high rates of output growth in these countries are input driven. The analysis shows that the role of productivity growth has been minimal, accounting for at most 30% of the average rate of growth. For China, the contribution of productivity is slightly higher. These estimates reflect two important conclusions: (1) there is a need to better estimate TFP growth rates, and (2) despite the higher TFP's contribution, the hypothesis that growth in these economies are input driven cannot be rejected. Like Senhadji (2000), estimated TFPs were used to investigate deeper into sources of growth, and it was found that for China, India, and the Philippines, government spending seems to have been important. For most of the countries, it was hard to find a unilateral support for financial deepening. Alternative measures of openness to trade, however, seem to be positively associated with growth in China, Malaysia, Singapore, and India. Except for Thailand, Indonesia, and Taiwan, investment seems to have either negligible or negative growth effects. These results are not unexpected and could be due to a number of reasons: (1) some variables may only have short-run effects, (2) there could be possible multi-colinearity among the included variables, and (3) it cannot be argued that these are proper proxies of the hypothesized determinants. Further, for the short-run, neither the direction nor the magnitude of these effects can be generalized. Such issues are taken-up more seriously in the following chapters.

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