Technological catch-up and economic growth in East Asia and the Pacific

Abstract

This paper examines factors contributing to the faster economic growth in East Asia relative to other APEC economies. A simple but popular model is applied using purchasing power parity income estimates. Contrary to the view recently advanced by Krugman, we find that productivity improvement was an important factor contributing to the rapid East Asian growth. For many East Asian economies such as Japan, Korea, Taiwan and Hong Kong, a large proportion of higher than average growth is attributable to technological progress.