Key papers East asian Path

Roderick 1999 Main point

• explain why did taiwan and south korea grow

Roderick 1999 two main explanations explored

• investment

• exports

Roderick 1999 potential export argument

• import substitution moved to open trade, specialise and gain comparative advantage

Roderick 1999 investment argument

• growth as investment increased as gov reduced barriers to investment

Roderick 1999 arguments against exports

• didnt increase that significantly

• Exports increased without a export profitability of increase

Why taiwan not grow from exports

There was a delay after the export policy in the 1960s, so exports in taiwan followed growth and

why are productivity spillovers from exports also not valid

• no evidence that they could cause such large growth

Roderick 1995 equilibrium agrument for investment

• in open economy as imports rise exports rise to fiance those imports for the balance of payments

• Need foreign currency to pay for those imports

• so rising exports as a share of GDP caused by investment increases

Why were tawian and korea not growing

due to cooardination faliure

What is cooardination failure with example

• good high skilled trained labour force but poor physical capital

• Government put in subsidies and incentives to encourage investment

korea investment policies

• sponsoring risk by agreeing to bail out desriable activities

Taiwan Investment Policies

• subsidies, which were tax incentives for enterprises and reinvestment

is there evidence for policies of investment working

yes significant increase on investment to GDP-ratio

Why were policy successful in taiwan and korea because

• less pressure group politics because of equal wealth and income distribution

• Well educated labour force and low endowment of physical capital

Young 1995 main point

• did factor accumulation cause growth Hong Kong , Singapore , Taiwan and South Korea

Young 1995 Hong Kong

Hong Kong increased GDP ratio to Investment

Young 1995 What happened to human capital accumulation

• secondary education almost tripled but not outlier compared to other parts of the world after WW2

What did Young find Hong Kong

• emphasis on labour and human capital deepeing vs heavy investment

What did Young find Singapore

• strated out with capital input growth in the 1960s then switched to more human capital approach

Collins Bosworth roderick main point

• investment and savings siginificant for east asian miracle growth

• TFP role small

• Factor acuumulation effects were the main points

Collins and Bosworth and Roderick overall finding on policy

• policy explains 1/3 of growth in east Asian and other developing regions

What is Collins, Bosworth and Roderick’s

• Openness and macro policy help growth indirectly by encouraging capital accumulation

• Openess found to correlate with growth

Main methodology Young

Quantitative growth accounting

Main Methodology Roderick 1996

Institutional and macroeconomic Analysis (equillibrium reasoning)

Young 1995 growth accounting steps

• first differenced the production function

• Adjust for labour quality

• Construct capital stock from data

• then split to find how much of total growth was explained by capital and labour

• Residual is TFP