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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 22, No. 1, pp.29-54
ISSN: 1225-0279 (Print)
Print publication date 28 Feb 2009
Received 23 Nov 2008 Revised 15 Feb 2009

Krugman and Young Revisited: A Survey of the Sources of Productivity Growth in a World with Less Constraints

Robin C. Sickles ; Burcu Cigerli
Professor, Reginald Henry Hargrove Chair in Economics, Department of Economics, Rice University, Texas, USA 77005, Tel: +1-713-348-3322, Fax: +1-713-348-5278 rsickles@rice.edu
Graduate Student, Department of Economics, Rice University, Texas, USA 77005, Tel: +1-713-348-8411, Fax: +1-713-348-5278 burcu.cigerli@rice.edu

JEL Classification: C5, C8, O2, O3, O5, O11

Abstract

Young (1994) and Kim and Lau (1994), among others, argue that the “Asian Miracle” of relatively high growth was largely due to increases in factor inputs. Productivity growth would eventually slow because of diminishing returns to factors. Thus total factor productivity growth was not the reason for the Asian Miracle. Krugman (1994) summarized this research, comparing the growth experience of Singapore, among the other Asian Tigers, to that of the Soviet Union and argued that there was reason to expect a similar outcome, namely a collapse of the political institutions due to economic stagnation. Interestingly, Krugman consistently refers to efficiency growth and technical progress as equivalent terms. In this paper and survey we discuss alternative explanations for economic growth in Asia as well as elsewhere in the world in the post WWII years. The alternative explanation is explicit in Krugman's treatise. It is economic growth due to a world with less constraints.

Keywords:

Total factor productivity growth, East Asia, Efficiency change

Acknowledgments

This paper was prepared for the 16thSJE-KERI-KIF International Symposium on “Productivity, Growth and Trade in East Asia,” November 27, 2008, Seoul National University, Korea. The authors would like to thank Byung Sam Yoo and Keunkwan Ryu for their constructive comments on the survey and Hak K. Pyo for his support and interest in our research. The usual caveat applies.

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