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Revisiting the Growth of Hong Kong, Singapore, South Korea, and Taiwan, 1978-2006, from the Perspective of a Neoclassical Model
Conference paper

Revisiting the Growth of Hong Kong, Singapore, South Korea, and Taiwan, 1978-2006, from the Perspective of a Neoclassical Model

Shu-shiuan Lu
2009 Annual Congress of the European Economic Association and the Econometric Society European meeting (EEA-ESEM) 2009 Annual Congress of the European Economic Association and the Econometric Society European meeting (EEA-ESEM)
2009

Abstract

Sources of Growth;East Asian NICs;Neoclassical;Productivity
This paper studies the sources of growth for the East Asian NewlyIndustrializingCountries (NICs) – Hong Kong, Singapore, South Korea and Taiwan (1978 – 2006) – using a diagnostic procedure, similar to Business CycleAccounting, which has recently been developed in the business cycle literature.This diagnostic procedure provides a complete characterization of agents' interactions within these NICs from a neoclassical perspective and sheds light on why these NICs quickly accumulated capital and labor, and experienced rapid growth. The growth dynamics show that total factor productivity (TFP) improvement is crucial to the capital boom and output growth in Taiwan and South Korea. Moreover, the country-specific, time-varying capital market conditions induce the growth of output in Singapore and Hong Kong, and the capital and labor boom in all of the NICs. Therefore, the long-term growth is mainly attributable to the combined effect of productivity improvement and changes in capital market conditions

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