2.3 Source of growth : quantitative
The most popular to measure economic growth originated from two papers by Young
(1994, 1995) which led to a hotly debate about the sources of growth in East Asia. These two
papers was used by Krugman (1994) to suggest that East Asia miracle was not real, but its
rapid growth was attributable to a rapid accumulation of capital goods. The newly industrial
countries which included in this study were Taiwan, Hong Kong, Korea and Singapore. What
Young intended to prove is that total factor productivity (TFP) growth rendered only a small
contribution to total growth. In particular, Singapore, TFP growth had been calculated around
zero. The contribution of TFP to growth in East Asian countries over the period of 1960-85
varied from 2.5 percent in Hong Kong to 0.1 percent in Singapore. The conclusion suggests
that the East Asian miracle growth is mainly due to the rapid growth of inputs only, namely (1) population growth (2) the quality of labour increasing as a result of high investment in
education (3) high rates of saving have enabled a rapid accumulation of capital. While the
contributions of technical progress and efficiency in production has been limited.
2.3 Source of growth : quantitative The most popular to measure economic growth originated from two papers by Young(1994, 1995) which led to a hotly debate about the sources of growth in East Asia. These twopapers was used by Krugman (1994) to suggest that East Asia miracle was not real, but itsrapid growth was attributable to a rapid accumulation of capital goods. The newly industrialcountries which included in this study were Taiwan, Hong Kong, Korea and Singapore. WhatYoung intended to prove is that total factor productivity (TFP) growth rendered only a smallcontribution to total growth. In particular, Singapore, TFP growth had been calculated aroundzero. The contribution of TFP to growth in East Asian countries over the period of 1960-85varied from 2.5 percent in Hong Kong to 0.1 percent in Singapore. The conclusion suggeststhat the East Asian miracle growth is mainly due to the rapid growth of inputs only, namely (1) population growth (2) the quality of labour increasing as a result of high investment ineducation (3) high rates of saving have enabled a rapid accumulation of capital. While thecontributions of technical progress and efficiency in production has been limited.
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