英國南安普敦大學(xué)碩士畢業(yè)dissertation：經(jīng)濟(jì)增長中的韓國內(nèi)外部原因探究Economic growth in South Korea

英國南安普敦大學(xué)留學(xué)生畢業(yè)dissertation：經(jīng)濟(jì)增長中的韓國內(nèi)部及外部原因探究

UNIVERSITY OF SOUTHAMPTON 2008
SCHOOL OF SOCIAL SCIENCES
ECONOMICS
ECONOMIC GROWTH IN SOUTH KOREA:
CONTRIBUTORY FACTORS AND EXTERNAL RELEVANCE
Matthew Wale (21023743)
Prese
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nted for B.Sc. (Social Sciences) Accounting and Economics
June 2008
I declare that this dissertation is my own work, and that where material is obtained from published or unpublished work, this has been fully acknowledged in the references.
Signed: .............................................................2
Acknowledgments
I would like to thank my family and friends for the help and advice they have given me in completing this paper. I also wish to thank mysupervisor, Xavier Mateos-Planas for his guidance and assistance.
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Contents
1.0 Introduction p4
1.1
A Few Words On Korea乫s Growth p5
2.0 Economic Growth Theories p7
2.1
Introduction p7
2.2
Old Growth/Neoclassical Theory p7
2.3
New Growth Theory p10
2.4
Thoughts & Conclusions p12
3.0 How did South Korea Grow So Fast? p14
3.1
Introduction p14
3.2
What made Korea grow? p15
Points 1,2,3 Outward Orientation p16
Point 4 Investment p17
Point 5 Shifting Sectors p18
Points 6,7 Technology & Human Capital p19
3.3
New Growth Theory and Korea p21
3.4
Thoughts & Conclusions p23
4.0 Is South Korea a suitable Blueprint for other nations to follow? P25
4.1
Introduction p25
4.2
Issues with Korea乫s progress p25
4.3
Is Korea a suitable Blueprint, and can it be followed? P30
5.0 Concluding Remarks p34
6.0
Word Count p36
7.0
Bibliography p37
8.0
Appendix I .Library Skills Report p42
9.0
Appendix II . Interim Report p56
4
1.0 - Introduction
Economic growth is a vital field of research; it is the vehicle of development that allows poorer nations to become rich. In the simplest terms, if an economy doesnt grow, it cannot get richer; the population within cannot get richer, and their standard of living cannot improve. Understanding economic growth can help us to make decisions and take actions that can help countries to get richer, and contribute towards the improvement of quality of life.Such an interesting and important topic demands further attention. This paper however, will not bestrictly written about economic growth theory, nor will it become preoccupied with the vast and complex mathematical models seen with growth theory. This papers purpose is to look at distinct economic growth theories, and the determinants of economic growth within them, in the context of a particular growth issue. The rapid growth of the so-called Tigereconomies of East Asia (being Singapore, Hong Kong, Taiwan and South Korea) has been described by some economists as miracle growth (World Bank 2003). These economies made a huge leap in income levels over the latter half of the 20th century, and are now near the levels of the worlds richest (Stiglitz 2001). .#p#分頁標(biāo)題#e#
The three key aims of this paper are as follows:
.
To look at the two distinct forms of economic growth theory, and identify what drives growth under each theory
.
To analyse the main forces behind Koreas growth; how did Korea utilise these forces, and how does this link to the growth theories to explain Koreas experience
.
To build on these points to discuss whether or not the Korean development Blueprint is suitable for other nations to follow.
5
South Korea is not intended as a proxy for the other three original Tigers, but rather to take it as a classic example. There are key similarities between the four Tigers, primarily regarding the drive to become involved in the world economy through increased trade, as well as state intervention in the development process (Krueger 1995). However, the differences are vast and well documented, so it is prudent to focus on one in this paper.
1.1 - A Few Words On South Korea乫s Growth
From the mid to late 1960乫s until the financial crisis of 1997, South Korea乫s economic growth was nothing short of staggering. South Korea became a quintessential Developmental State, that is, the goal of the state is to promote sustained development, and economic growth (Fine, 2006). The details of South Koreas drive for growth shall be discussed later, but in essence, the state maintained economic growth as a top priority (Hookon Park, 2000).
From the 1960s until the mid 1990s, Korea enjoyed almost unprecedented growth of GDP, and GDP per capita, as can be seen in Figure 1:
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Figure 1: Growth rates (%) of GDP per capita in Korea, 1965-1995
英國南安普敦大學(xué)留學(xué)生畢業(yè)dissertationSource: Authors calculations based on World Development Indicators, World Bank (2007)
In itself, these figures are staggering; even more so, when compared with inferior performance of industrialised countries including the United States and UK (OECD 2004). However, South Koreas economic ascendency came to a grinding halt, albeit temporarily, with the 1997 financial crisis which gripped vast swathes of eastern Asia. The OECD reports GDP per capita in South Korea shrinking by 7.6% in the subsequent year, having grown at between 4% and 8.1% in the preceding years of the 1990s.
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2.0 - Economic Growth Theories
2.1 - Introduction
This purpose of this chapter is to introduce the basic premise of two types of growth theory; Neoclassical or Old Growth Theory (OGT) and New Growth Theory (NGT), and provide a discussion of the results they provide. That is, to establish what factors contribute to the growth of a countries output. If it can be shown that particular theories go some way to explaining Korea乫s growth, then this can further help the understanding of actions required to assist the development of other nations (see 乬Blueprint乭 chapter 4).
What this chapter does not intend to provide is a rigorous analysis of models, with tedious mathematical derivation and interpretation.
2.2 - Old Growth/Neoclassical Theory#p#分頁標(biāo)題#e#
Neoclassical growth models have attempted to explain economic growth in terms of factor inputs and subsequent outputs, but without internalising the driving force of growth; that is, the rate of growth is determined exogenously of the model (something that came to be one of the biggest criticisms of the theory). Robert Solow (1956, 1957) provided something of a benchmark model, the Solow Model. Jones (2002) provides a useful adaptation of this model. The basic form, with technology;
Y = K兛(AL)1-兛
This equates the inputs of capital (K), and labour (L), with diminishing returns to each input (K and L, with 0 < 兛 < 1), with 乪technology乫 (A), used as a loose proxy for many variables in an economy that drive productivity. This very basic model has many derivations (see Jones
8
2002), a significant one being that the economy grows at an exogenous rate, g, the growth rate of technological progress 乪A乫. The finer points of the model aside, the implication is that the economy errs toward a 乪steady state乫; where investment in new capital is enough to replenish depleted or depreciated capital stock, and provide new capital for an increasing population, and increasing technological progress1. The model suggests that, as technology is taken as an external factor, institutions cannot affect growth rates of the economy (though presumably any government could aid the progress of technology outside the model, through various means). Only level effects can occur, via an increase in investment and factor accumulation which therefore accelerates the rate of economic growth before converging, again, to a steady state. A further adaptation of the Solow model can be written:
Y = Where B is a term used for growth accounting; it captures the residual extra output after accounting for the capital and labour inputs. The extra variable B can be interpreted as total factor productivity (TFP; the residual of economic growth that cannot be explained by increased inputs of factors like physical capital, human capital or labour) (Jones 2002). TFP is interpreted as increases in productivity that arises from spill overs (explained below), and advances in technology.
The Solow model takes exogenous technology as given. Fine (2006) expands that OGT does not attempt to explain productivity growth over time it only explains different levels of output (i.e., more inputs, more investment = higher output in an economy). However, it should be noted that despite leaving technology variables as exogenous, neoclassical theories do take technological change seriously, acknowledging that it is a key driving force of growth
1 Here, on a 乪balanced growth path乫 at the steady state, output per worker grows at the rate 乪g乫 (Jones, 2002)
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(Grossman & Helpman 1994), it simply doesn乫t attempt to explain how that technical change happens.
One implication of OGT was the idea of 乪convergence乫, an economy growing faster the further below its 乪steady state乫 it is. Barro and Sala-i-Martin (1995) have data that shows conditional convergence occurs in many countries (that is, an inverse relationship between growth rates and initial per capita income, if we assume countries may have different steady states.). It can be seen that, due to OGT乫s diminishing returns to capital, the less capital an economy has, the more its returns will be at first. Therefore it grows faster the further below its optimum amount of capital it is, hence it initially catches up until reaching its steady state, a process which can be aided by technology advances (increases of in the model). Evidence from Jones (2002) suggests that when looking at countries own steady states, conditional convergence and thus Solows predictions hold well. Solows models provide a good platform on which to build, as shown by the Mankiw et al. (1992) model which adds human capital (H) to the neoclassical model;#p#分頁標(biāo)題#e#
They find that it performs very well indeed; on top of predications of higher investment yielding growth, so too can better provision of human capital (such as education) in an economy2. The authors state, It appears that the augmented Solow model provides an almost complete explanation of why some countries are rich and other countries are poor once differences in levels of human capital are accounted for.
2 Its assumed that < 1, to retain diminishing returns to all capital.
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2.3 - New Growth Theory
The new take on economic growth was kick started by Paul Romer in the 1980s. Again, this paper will present the basic aspects of the topic. NGT disposed of the insistence of diminishing returns, justifying constant or increasing returns to scale with the positive externalities that come from other factors in growth (i.e. human capital development) (Thirlwell, 2006). These externalities or spill overs are indirect benefits derived from an input. For example, an individuals education allows them to engage in more technical employment, but benefits the wider economy by bringing that technical process into the economy. Similarly, innovation leads to externalities; once an idea is out there, people can build on it to make several modified ideas.
Within NGT literature, Martin & Sunley (1998) concisely define three typesof model; those that simply show capital investment asgenerating externalities [type A], those that emphasize human capital andlearning by doing and knowledge spill overs [type B]... [and] endogenous innovation growth theory, [which] emphasizes the returns to technological improvements arising from innovation by producers [type C]. Thus NGT attempts to explain technological growth and residual TFP.
Type A: Romers (1986) paper introduced a model in which per capita output can grow without bound, where there is no need for convergence or reliance upon exogenous growth of technology. Romer states that what is crucial for all of these results is a departure from the usual assumption of diminishing returns, that is diminishing returns to individual inputs. The inclusion of knowledge in the production function means that in aggregate the model displays increasing returns to capital, thus the economic growth in the model is endogenous. Barro and Sala-i-Martin (1995) state that Romers model uses a learning-by-doing framework which generates a positive effect of experience on productivity. As a result, investment in
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new capital can lead to externalities as workers become more skilled with using said capital, i.e. a type [A], model as defined by Martin & Sunley.
Type B: The classic example of the human capital endogenous model (type [B]) came from Lucas (1988), where investment in human capital (education and job based training) yield externality effects, reflected in greater returns to capital and labour. People educate themselves to earn better wages, and their heightened abilities lead to spill overs in the wider economy that benefits from their ideas and efforts (Martin & Sunley 1998).#p#分頁標(biāo)題#e#
Type C: Romers (1990) model looked at technological change as being based on research & development (R&D) efforts in an economy, internalising growth by acknowledging that technological advances arise from firms seeking profits through better or diverse products (Jones, 2002). Adapted from Jones (1995a);
Y = K
The model allows endogenous growth by allowing control over A, as A here represents a stock of ideas in the economy. As A= can be shown to be increasing, at any time by L, where L is the number of researchers, and is the rate at which they discover new ideas, essentially their effectiveness (Jones 1995a). Here, Romer has made g endogenous to his model. If with the constants > 0, then as the amount of ideas, A, increases, so too does effectiveness of researchers, due to knowledge spill overs. As A depends on , and the number of researchers, L, policies that increase the number of researchers, or indeed their rate of effectiveness, can increase the growth rate. Type [C] models in general are justified by the assumption that technological progress requires intentional investment by profit seeking firms (Grossman & Helpman 1994).
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This is the basic premise of NGT; growth can be endogenously driven by factors which have externality effects. In this way, an economy isnt restricted to diminishing returns and differences in growth rates can be seen as a reflection as different levels of human capital, R&D and technology. Problems persist, however, notably with questions over the assumption that returns to capital dont diminish, and the abstract nature of NGT which relies heavily on rigid models, insensitive to subtleties of development. (Martin and Sunley 1998). The ability to accurately measure and model such spill overs has also been doubted (Mankiw et al 1992).
2.4 - Thoughts & Conclusions
Neoclassical theories cater for factor accumulation as increasing an economy乫s output. Investment in physical capital, human capital, labour inputs and, exogenously, technology explain increases in economic growth. NGT tries to make sense of the unexplained; spill overs and externalities from investment, training and innovation that increase productivity, and thus TFP. In this way, it attempts to explain economic growth where neoclassical explanations provide few answers.
The merits of the Solow model as a sound basis of growth theory are not in doubt. Indeed, the findings of Barro (1991) and Mankiw et al. (1992) are reported by Thirlwell (2006), both showing good support for Solow models augmented with human capital variables, and their conditional convergence predictions. NGT, and the concept of externalities resulting from certain actives in an economy which can lead to 乪more than the sum of the parts乫 growth, certainly presents a logical basis for exploring what drives growth and productivity over and above the rate of input accumulation.
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This paper shall focus on the broad categories of level versus rate factors identified in this chapter; was Korea乫s growth a case of more inputs and investment raising the level of output per capita (OGT), or did NGT factors discussed here (human capital, innovation) play a role in perpetual growth advances?#p#分頁標(biāo)題#e#
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3.0 - How did South Korea Grow So Fast?
3.1 - Introduction
South Korea (from now, referred to as Korea) emerged from the Second World War as a bruised nation. Japanese occupation and the split with the North Korea ravaged the nation further, the latter being particularly damaging as most of Korea乫s manufacturing and power facilities were situated North of the border (Kreuger 1995). Subsequently, Korea had to start almost from scratch. By 1960, Korea was still a 乬poor developing country乧 heavily dependent on foreign aid乭 (Collins 1990).
The economic performance that followed, however, is startling. Korea乫s economic growth outstripped growth performance in all other regions in the world, including industrialised nations.
Table 1: Averaged annual growth of GDP per capita, 1965-1995
Region
GDP per capita growth (average annual %)
Korea
6.6414
Latin America & Caribbean
1.602
High Income Countries
2.650
Source: Authors calculations based on World Development Indicators (World Bank 2007)
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This paper seeks to analyse the predominant causes of Koreas growth. As outlined in the introduction, this summary approach will allow two things; to suggest how previously discussed growth theories tie in with Koreas experience, and, in the next chapter, to help discuss whether or not Korea is a suitable blueprint for other developing nations to follow.
3.2 - What made Korea grow?
This paper identifies seven key reasons that go some way to explaining the rapid economic growth enjoyed by South Korea, predominantly within a 1960s to mid-1990s timeframe. Below, each reason will be analysed in turn, in terms of how it applied to Korea, and how it contributed to economic growth. What should not be in doubt, is that Koreas growth arose from strong government interventions, and subsequent exposure of industries to world markets that forced competitive discipline (OHearn 1999). The issues at hand here are the key aspects of the governments drive for growth, and the relation to growth theories outlined in chapter 3. The seven broad and often overlapping points are;
1.
The shift from Import Substitution to Export Promotion
2.
State control of the financial sector and currency
3.
Export incentives for Korean firms
4.
Increasing investment
5.
Shifting sectors
6.
New technology
7.
Human Capital
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Points 1,2,3 - Export Promotion, Financial Control & Export Incentives: Outward Orientation
Korea乫s switch from import substitution, the protection of domestic industries to ensure they can compete with imports (Perkins et. al 2001) to export promotion (actively assisting export-producing industries) was a conscious decision upheld by successive governments from the 1960乫s onwards. It should be noted that Korea maintained many import barriers, but now focused growth through exports. Hookon Park (2000) documents how the Korean government, guided Korea into export promotion in the mid 1960s after strengthening bureaucratic bodies that controlled the economy. Upon normalising diplomatic relations with Japan, inflows of investment from the Japanese, and access to Japanese technology was gained (see also point six).#p#分頁標(biāo)題#e#
With regards to points two and three, Nam (1995) describes the first of many five year economic plans in Korea, starting in the 1960s. Initially, the plan made crucial changes to the financial sector which allowed the government to control interest rates, the currency (devaluing the Won), and crucially provide a host of export incentives (low taxes on export profits, to direct subsidies). It was these incentives that, combined with a cheaper Won, allowed Korean manufacturers to take a prominent position in world markets, and earn huge incomes from exports which were now cheaper to foreign customers. The Korean government began in the 196s to use a system of preferential credit and tax systems as part of these incentives, the extent of which varied slightly over the following years (Dornbusch & Park, 1987).
Points one to three overlap somewhat to form what is known as outward orientation of the Korean economy. The switch to export promotion, and supporting exporting firms with preferential loans (below market interest rates) and other export incentives allowed Korean
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firms to grow at tremendous speed, often into what became known as Chaebol (large corporations with government influence due to strict controls on loans and activities) The Chaebol absorbed lots of labour and investment (O乫Hearn 1999), their growth amounting to an increase in inputs, that is, in the context of earlier neo-classical growth models, an increase in K (capital), L (labour)., and of course technology (A), albeit slightly behind the 乪frontier乫, (see O乫Hearn乫s (1999) example in point six, 乪New technology乫). This also links with the neo-classical assumption of technological progress being exogenous, as Korea followed Japan乫s lead.
In keeping with Moon乫s (1998) assertion that export growth itself does not cause growth, it is worth mentioning explicitly that outward orientation itself is not the driving force of growth, but rather what it allows. In Korea乫s case, it is apparent that outward orientation allowed the economy to take advantage of its labour force, and use investment, capital accumulation and externally sourced technologies to provide for this labour. . i.e. outward orientation is not sufficient without these complimentary factors.
Point 4 . Investment
Investment plays a vital role in economic growth, especially at the huge rates seen in Korea; Nam (1995) details high and increasing investment rates in Korea (from 12.8% of GNP in 1962 to 39.4% of GNP in 1991), helped by foreign investment 乬filling the domestic investment and savings gap乭 whilst domestic savings rates got up to speed.
The increasing investment rates seen in Korea over the decades link intuitively to neoclassical growth theory. Kreuger (1995) presents interpretations of Levine and Renelt乫s (1992) study growth regressions, finding investment rates positively and robustly correlating with growth rates in Korea. Korea乫s high investment rates led to accumulation of physical
18
and human capital, and is consistently cited as a key reason behind its economic growth (Krueger 1995); investment in human capital are key compliments to factor accumulation (Perkins et. al 2001) (see point seven).#p#分頁標(biāo)題#e#
5 . Shifting Sectors
The Korean government accommodated shifts to outward orientation by a concerted decrease in agricultural activities, and a subsequent transfer of labour and resources to the manufacturing sector, which drove exports (Schwartz 2000). The strategy promoted greater use of industries that could create value added manufactured output with a high global demand (Kim et al. 1985).
Nam (1995) provides interpretation of Kim & Parks (1985) growth accounting study which sought to identify sources of Koreas growth. The findings show shifting sectors contributing to growth by taking labour from low productivity agriculture to high productivity non-agricultural sectors; labour inputs (accumulation of factors, in neoclassical terms) played a large role in explaining Koreas growth, according to their findings. Nam (1995) notes that the labour market remained at near full employment since 1973 due to labour intensive production processes, and large shifts of labour from agriculture to industry.
In addition, a key characteristic of Koreas labour market was the governments ability, sometimes by force, to keep wages relatively low, something Dornbusch and Park (1987) cite as crucial in maintaining Korea乫s international competitiveness, until at least the late 1980乫s and 1990乫s.
Points 6, 7 . Technology & Human Capital
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Discussion on how Koreas export promoting strategy led to technology advances is offered by OHearn (1999), with an analogy of geese flying in a formation. His analogy explains that Japan flies at the tip of the V as the regional technological leader, and other East Asian states, notably Korea, follow suit. OHearn suggests that Japan shed the next-lower echelon of activities and technologies to the East Asian countries in its wake. In this way, Korea was very much catching upwith industrialised nations as it acquired technology exogenously (Pack 1992). This aspect of Koreas growth lead many, such as Krugman (1994) to dispel the idea of an East Asian miracle; he asserts there is startlingly little evidence of improvements in efficiency before suggesting that the Tigers and thus Koreas, internal (i.e. innovative) technological advances are not bringing it any closer to industrialised states. Again, this backs up the neoclassical accumulation argument of Korean growth; growth stemmed from increasing factor inputs, not innovation of technology.
Human capital accumulation played a crucial role in Koreas rapid growth. This includes both on the job training as well as formal education. Kim et al. (1995) point to the vital government intervention to promote education, and particularly on the job training, as a key factor in keeping Korea乫s labour force efficient and capable of more value added activities. When technology is received by the methods described by O乫Hearn (1999), Grossman & Helpman (1994) assert that nations need certain levels of education and training to enable its workforce to work with new and absorb new technology.#p#分頁標(biāo)題#e#
Human capital (education and training) are factors to be accumulated, like physical capital and labour; they are inputs to an economy, and their direct benefits fall under the remit of neoclassical factor accumulation. Growth accounting studies concerning Korea all suggest high direct effects from education and human capital on the economy乫s growth. Collins & Bosworth乫s (1996) growth accounting model returns figures of between 0.6% and 0.9% contribution of education to growth, per annum, matched only by Taiwan, and significantly
20
higher than elsewhere . thus its accumulation explains a large chunk of Korea乫s growth. Young乫s (1995) growth accounting study shows education to have contributed significantly to growth; the accumulation of human capital factors 乬chip away乭 total factor productivity in Korea. Improving education levels is a theoretically fundamental factor to aid economic growth (Perkins et al. 2001). Table 2 documents the rising education attainment enjoyed by Korea from the 1960乫s onwards, its period of supreme growth, catching up with industrialised nations, and leaving other middle income nations in its wake.
Table 2: Educational Enrolment Levels, 1960 and 1983
Secondary Education % of age group
Higher Education % of age group
Country
1960
1983
1960
1983
Middle Upper Income Countries
20
55
4
14
Industrialised Countries
64
85
16
37
Korea
27
89
5
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Source: Dornbusch and Park (1987) As such, Korea乫s education and technology experiences over the 1960-1990乫s period again point heavily to neoclassical growth explanations of factor accumulation and catch up. However, this is not quite the whole picture.
3.3 - New Growth Theory and Korea
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Technology and human capital accumulation can allude to NGT interpretations seen in chapter 2 due to the spill overs that can be obtained from each. Thus, following is a discussion of how NGT ideas could be used despite the strength of neoclassical theory in Korea乫s experience.
The growth accounting studies discussed above (Young; Collins and Bosworth) tend to suggest the neoclassical theories are sufficient for Korea. In mathematical terms, they asserted that increasing inputs caused the increasing outputs . a conclusion reached in this section with applied focus on the sources of Korea乫s growth - with economy-wide TFP gains being relatively modest. .
Table 3: Sources of Growth, by Region 1964-90, Percentage points per year
Region
Growth of Output per Worker
Contribution of Total factor Productivity
Korea
5.7
1.5
Latin America
1.5
0.2
Industrialised Countries (not USA)
2.9
1.1
Source: Collins and Bosworth (1996)
Of Korea乫s startling growth figures, TFP does not make up a spectacular proportion (Table 3). Jones (2002) cites other several other countries where TFP has been higher than Korea乫s, but economic growth has been lower. But, it is not low, and therefore requires some discussion. Collins & Bosworth (1996) raise concerns with the lack of high TFP that should#p#分頁標(biāo)題#e#
22
arise, if externalities from education inputs were present. As stated above, however, Korea乫s TFP in absolute terms was good, as indeed it was in other Tigers乫 economies; the gripe is due to low TFP relative to total economic growth. But the mere presence of TFP implies extra productivity must have come from somewhere.
To link explicitly to NGT models outlined in chapter two, Korea乫s experience suggests models which propose business investments as having externalities (type [A]) can be used to help explain growth. Nam (1995) points to improved business organisation and production technique as having a contribution to growth in Korea from the 1960乫s to 1990乫s. Thus, capital investment in new industries generated externalities in Korea; Kim et al (1995) point to technology and knowledge spill overs which stemmed from Korea乫s investment into export industries, and the perpetual on the job learning resulting from this diversification. This links closely with type [B] models of human capital accumulation, as capital investment is complemented by on the job training. On top of all the direct returns from education and training in Korea, there would certainly have been spill overs from this; benefits to the wider economy of having a better workforce that cannot be modelled as a factor input. Lucas (1993) suggests 乬learning on the job seems to be by far the most central乭 aspect of human capital growth, and was especially important in Korea. As a result of the way Korea acquired technology, as opposed to utilising internal innovation, type [C] models which emphasise innovation as driving forward technology seem mostly irrelevant for Korea, internally at least. As nation following the technological lead of others, chunks of Korea乫s TFP are doubtless the result of technology acquired from abroad, again linking to neoclassical theory (and increase in 乪A乫 in the Solow model). However, as Martin and Sunley (1998) suggest, type [C] models of innovation can be used to explain technology transfer from country to country.
23
Stiglitz (2001) claims debate over TFP in East Asia and Korea may be slightly higher than studies (such as those discussed above) have reported, and debate over TFP may be missing the point3. He says 乬Those who argue for little TFP are not denying the decrease in the technology gap, but only that the technological gains were 乪purchased乫... It may be reassuring that technology can be acquired at a price. But money alone will not do the trick, or many other countries would have narrowed the technology gap as well乭. Stiglitz remarks that governments in some Asian countries thus provided complimentary policies that stimulated growth. Korea乫s government certainly did this, from its pursuit of outward orientation to its insistence on industrialisation and human capital accumulation. Indeed, Korea must look to move to a more knowledge based economy, focusing on innovation as indefinite acquisition of factor inputs is unfeasible (Baek and Jones 2006), and hence NGT (specifically type [C]) will have more say in Korea乫s future growth.#p#分頁標(biāo)題#e#
3.4 - Thoughts & Conclusions
Korea乫s tendency to follow the technological lead of other nations dents NGT ideas of technological progress being endogenously engineered to perpetuate growth. Young (1995) points to increased labour participation rates, intersectoral labour transfers from agriculture to industry, and investment in the human capital of labour as being key to factor inputs rising dramatically. But this leaves less room for TFP, NGT and a miracle; as Krugman pointed out, more inputs leading to more output is hardly miraculous. Mankiw (1995) suggests that, 乬for
3 This paper would mostly agree . the vast complexities of economic growth mean accounting for growth will never be perfect, and spill overs will never be simple to quantify. The important thing, in Korea乫s case, is that strong factor accumulation drove growth, and externalities and greater efficiencies will logically follow in some capacity
24
understanding these [East Asian] growth miracles, endogenous growth theory appears unnecessary乭. High investment also led to rapid capital accumulation which generated Korea乫s burgeoning output. Importantly, all this stemmed from government policies in one way or another.
That said, there is room for more NGT ideas in Korea乫s experience than has been previously suggested, as learning by doing, education, economies of scale and increasing use of internal innovation generate increased efficiencies, just not on an overly significant scale relative to total growth. The unexplained TFP residual after other inputs are taken into account can therefore have light shed on it by NGT. However, it is the view of this paper that NGT has less to say, relative to neoclassical theory, about the startling growth in Korea from the 1960乫s towards the 1990乫s.
25
4.0 - Is South Korea a suitable Blueprint for other nations to follow?
4.1 - Introduction
Discussing the factors that helped Korea to grow so rapidly, and how they could link in with economic growth theory is a redundant exercise unless it is followed by a critique of the validity of the country乫s progress for 乪following乫 countries. For much the same reason as studies of East Asia乫s 乪miracle乫 dried up in the late 1990乫s, this paper has focussed so far on the 1960乫s to 1990乫s, thus postponing discussion of the Asian Financial Crisis of the late 1990乫s. This chapter discusses some negative aspects of Korea乫s experience, and, balanced against what we have seen in previous chapters about its growth, decide whether or not the Korean model is a good Blueprint.
4.2 - Issues with Korea乫s progress
The outward orientation policies pursued by Korea, however successful they were in facilitating economic growth, came with some sizeable burdens. One such burden was the government乫s push for expansion into Heavy & Chemical Industries (HCI) in the 1970乫s. The policy was aimed at maintaining Korea乫s international competitiveness, and diversifying away from light electrical goods it had been producing following Japan乫s lead (Nam 1995). However, the sheer size of investments required for the fixed costs of steel, shipbuilding and chemical industries forced Korea to borrow heavily from abroad. Foreign borrowing was also necessitated by low domestic savings at the time; Hookon Park (2000) points out that interest rates were kept low to encourage investment, thus demand for capital was high, and inflation followed. He concludes that 乬domestic savings were discouraged乭 due to lack of incentives to save when price levels were rising. High foreign borrowing, combined with Korea乫s reliance#p#分頁標(biāo)題#e#
26
on export markets left it vulnerable to external shocks, especially those of the scale of the Oil Shocks of the late 1970乫s. Due to the plan generating 乬excess capacity in unprofitable industries乭, some HCI investments began 乬to produce failures乭 by the end of the 1970乫s. This combination of negative factors saw Korea enduring negative economic growth in 1980 (Nam 1995).
As seen in chapter three, Korea乫s history of active involvement in the economy doubtlessly helped growth, but the lesson here is that limitations should be imposed. Powell (2005) describes the 乬knowledge problem乭 facing development planners; how could the Korean government know better than free market forces, in selecting the correct industries to promote? Evidently, the government was successful in 乪picking winners乫 some of the time, as some export industries grew on the back of first Japanese, then other foreign technology. Follower countries would have to ask if they had the knowledge to promote the right industries in this way, and indeed if they would be able to avoid some of the failures Korea produced. Allocative inefficiencies were a manifestation of Korea乫s interventionist policy; preferential loans (one of the export incentives described in chapter four) were often given to 乬favoured companies乭 by state controlled banks, not necessarily those firms whose investments would yield the highest return, thus potential rewards were lost (Hookon Park 2000). This type of intervention should be avoided, so says Mankiw (1995), unless policymakers are certain that their priorities will lead to the best returns.
Korea乫s mistakes with resource allocation would have impeded investment乫s effects on growth. The rate of factor accumulation, and neoclassical growth seen in chapter three, could have been even more spectacular if the government had avoided any policy mistakes in this field.
27
Thus, any country wishing to follow this Korean Blueprint would need to be aware that, as pointed out by Amsden (1989), intervention by the government was key. As discussed in chapter three, Korea grew through rapid factor accumulation facilitated by the state. Amsden points to the protection and promotion of key industries in Korea, as well as the emphasis on training and education that allowed the workforce to keep up with new technology. Thus as a Blueprint, Korea乫s example is a tough one to follow, requiring hard work and good decisions on the part of the state, not to mention extensive funding for investments and education.
A criticism that has been levelled at Korea乫s growth concerns its technological progress, or rather lack thereof. Krugman (1994) delivered a scathing criticism of East Asia乫s lack of technological innovation; the lack of TFP presented by studies discussed in chapter 3 are evidence of this. Korea乫s growth was primarily a result of rapid factor accumulation, including direct human capital gains from education and on-the-job training to cope with new technology. This is not necessarily a bad things and affords an economy a way around the fixed costs and secrecy that goes with advanced R&D. Therefore this paper would suggest that, as a Blueprint for others, this is certainly a sensible route; indeed, as reported by Wade (2004) technology in certain industries was starting to benefit from greater domestic innovation toward the 1990乫s. He does note, however, that this was the result of large government investment. Hence any other developing nation would need to be willing to bear heavy costs for any industry it may have successfully 乪picked乫. As outlined by Mitchell (1997), the Korean government has pushed for more innovation within the economy. For a developing state wishing to follow in Korea乫s footsteps, this path to growth is a viable option which would allow the country to catch up with other nations using current technologies, whilst gaining the expertise to innovate independently through education and knowledge transfers. A potential amendment to the Blueprint could see nations following Korea invest in R&D sooner, and better enforce intellectual property rights to protect and encourage#p#分頁標(biāo)題#e#
28
innovations, something Korea failed to do well enough (OECD 2000). In this way, NGT effects of type [C] models (as defined in chapter two) would not have been significant in the grand scheme of Korea乫s economic path.
Analysis of Korea as a Blueprint for growth requires some discussion of the financial crisis of 1997. Krugman and Obstfeld (2006) suggest something this paper has already discussed; lack of productivity and rising wages, as a reason behind the crisis. Foreign observers came to realise that rapid growth was a result of, predominantly, rapid factor accumulation. There was no 乪miracle乫 in East Asia, as Krugman put it, and foreign observers were beginning to realise this. East Asian economies, and South Korea, had some glaring faults. As Korea liberalised financially in the 1980乫s and 1990乫s, the Chaebol took advantage to 乬binge乭 on foreign borrowing (Hookon Park 2000) which caused debt-equity ratios in Korean firms to skyrocket. Under the weight of high debt levels, corporate Korea looked ever more shaky and some bankruptcies emerged as a result (Smith 1998), thus testing the banking frailties (outdated, insufficiently supervised financial institutions) in the economy. Smith continues to mention Korea乫s lack of competitiveness that stemmed from rising wages, and particularly the economies increasing reliance on short term loans (up to three times the value of its foreign reserves) by the mid 1990乫s as contributory factors to the impending crisis.
Whilst the weakening Yen making Japanese exports relatively cheaper (Smith 1998) was an unavoidable factor, the episode casts doubt on the validity of the Korean growth Blueprint. To follow in Korea乫s footsteps of long term causes, such as the weakness of banking, would be folly. The well documented 乪cosy乫 relationships between politicians and business failed to nurture corporate discipline, and this could be seen as a direct consequence of the long standing protection and influence the government exercised in the economy. The growth of huge Chaebol that came to dominate the Korean economy was fostered by government
29
initiatives such as the HCI plan, and protection to exploit economies of scale; those same Chaebol even came to purchase stakes of banking institutions in the 1980乫s when privatisation was introduced (Hookon Park 2000). Thus Korea sowed the seeds of crisis by allowing the economy to become too distorted. A few huge companies had too much power, and were allowed to borrow recklessly in the 1990乫s from Western banks who asked little questions, assuming defaults would be covered by the regional governments (Putzel 2002). Government supervision was minimal, being as they were more interested in 乬kickbacks乭 they could get from said corporations (Hookon Park 2000). This deep rooted fault in Korea乫s Blueprint is one which should certainly provide a warning to nations looking to follow Korea乫s progress. Economies must provide sufficient transparency in relations between government and business, and implement proper regulatory bodies to keep business in check, to ensure government intervention doesn乫t obscure its duty to discipline business. Kwon (2001) repeatedly cites government failure to handle large corporations efficiently as a root of the crisis. The immediate effects of the crisis were summarised by Barro (2001) who finds steep reductions in growth of GDP per capita in Korea (-8%), along with falls in investment and stock market prices.#p#分頁標(biāo)題#e#
Again, these distortions created by the crisis, and indeed its earlier causes, would have had a detrimental effect on the factor accumulation in the economy, as resources were channelled into the wrong projects, with risky loans.
Korea recovered well from the mini recession in 1980, and the crisis of 1997. Collins (1990) cites the continuous inflow of capital from abroad that afforded Korea乫s government 乬breathing space乭 to make policy changes and 乬sustain growth乭 thereafter in the 1980乫s. These policy changes, including trade liberalisation, reduction of government involvement in exports and un-pegging the Won from the dollar, represents a shift towards neoliberal 乪hands-off乫 economic policies, and 乬yielded favourable results乭 (Ariff and Khalid 2000), although
30
the privatisation and lack of state regulation in a freer market was a deep cause of the 1997 crisis, as discussed above. The recovery from the 1997 crisis was strong, with growth of real GDP per capita 9.87% and 7.77% in 1999 and 2000 respectively, after a post-1997 slump of -9.02% in 1998 (Heston et al 2006), but the same data shows these high figures tailing off, averaging under 4% growth per annum for 2001 to 2004. This is a reflection of Korea乫s difficulties coming to terms with free market reforms and trying to correct the previously discussed reckless power of the Chaebol (Kwon 2001). The turbulence from the 1997 crisis is a telling lesson to remind others of the pitfalls of reforming without adequate safeguards, and allowing state protected firms to get too big and powerful once the reigns were let go.
4.3 - Is Korea a suitable Blueprint, and can it be followed?
These are difficult questions to answer. The facts speak for themselves; Korea乫s growth up until the mid 1990乫s was spectacular. Equitable rises in living standards for citizens is widely acknowledged, but suggestions that welfare of the citizens was a secondary priority to growth have been levelled (Wade 1990). Glaring faults in Korea乫s Blueprint have been analysed, from the HCI failures to the roots of the 1997 crisis. In this context, this paper concludes that Korea offers a good outline, if not a rigorous Blueprint to follow exactly. Whilst perhaps not directly creating Korea乫s rapid growth, trade and outward orientation, combined with the government乫s initial protection, and subsequent promotion of certain export industries certainly facilitated growth as discussed in chapter three. The increased industrial employment, high investment, better education and newer technologies certainly drove growth. It is doubtful whether Korea would have been able to utilise its workforce and access newer technology and processes without promoting domestic industries for export success .
31
and given Korea乫s lack of natural resources, their path to economic growth was certainly suitable. This concept is at least something for followers to emulate.
Young (1995) remarked that realising that factor accumulation from investment, labour transfers better education and training are the keys to Korea乫s success 乬should be heartening to economists and policy-makers alike乭. It suggests no miracle in East Asia and Korea, just accumulation of inputs, and thus something others can and should follow. Neoclassical growth theory乫s explanation of Korea乫s growth through factor accumulation implies it should be possible for others to do; there were few tricks involved4, and any spill overs and TFP advances come as a package with Korea乫s development Blueprint, even if they aren乫t relatively big. The findings of Sachs & Warner (1997), reinforcing the assertion that open economies grow faster, is further endorsement of Korea乫s outward orientation.#p#分頁標(biāo)題#e#
Complications arise, however. Firstly, as suggested above, there are several negative aspects of Korea乫s development, generally concerning failure by the government to either realise when it was interfering too much, or when it was not doing enough to regulate business, in relation to the HCI plan in the 1970乫s, and the lack of control over business in the run up to the 1997 crisis.
But can other nations follow this Blueprint, or 乪outline乫? With regards to Korea乫s much maligned technological progress, or lack thereof, Wang (2005) predicts 乬few late industrialising countries are able to afford the South Korean model乭, based as it is on 乬the state乫s almost unlimited support of a few national champions, even at the expense of high
4 As Stiglitz (2001) pointed out, this is not to dismiss Korea乫s growth as being simple, but it is clearer than looking at an economy whose growth was predominantly TFP that went unexplained by conventional theories, or relied on vague NGT spill overs.
32
external debt and massive foreign borrowing乭. Bridging the technology gap to industrialised nations is complex and expensive, and follower countries need the resources, and willing technological leaders to do so; would others have a Japan to follow, as Korea did?
These questions are premature, however, if a potential follower country does not have some basic infrastructure prior embarking on a journey of growth. For instance, even before expansive growth began in the 1960乫s, Korea had controversial foundations upon which to build, in the shape of the Japanese colonialism which rid the country of class structure, enhanced the power of the state, shifted Korea toward manufacturing industries and controlled labour (Kohli 1999). In later years this infrastructure was built upon, as per the methods discussed in chapter 3. Korea, as a Blueprint, could be rendered somewhat useless if follower countries don乫t have a similar foundation, unless these foundations themselves are included in the Blueprint.
So following Korea乫s success requires deep foundations, heavy investment and accumulation of physical capital, human capital and labour shifts - and a bit of luck. Contrary to the World Bank乫s (1993) views, it would also require proactive policy intervention from the government to try to shape the path of development, an observation stressed by Kwon (2001). But every country is different; cultures, ethics, attitudes of government, attributes and weaknesses, geographical features and different positions in the world economy. Thus it is impossible to answer, with precise certainty, the questions 乬Is Korea a good Blueprint, and can it be followed?乭
This paper concludes that Korea offers some sound general guidance that other governments could follow, and some important lessons for other governments to learn before it is too late.
33
34
Part 5: Concluding Remarks
Having looked at two general approaches to growth theory and determined factors that lead to growth, this paper has concluded that Korea乫s growth is largely the result of spectacular rates of factor accumulation. As has been noted throughout this paper, the accumulation, and in some cases acquisition, of human capital, physical capital, labour and technology were the sources of Korea乫s growth from the 1960乫s to 1990乫s. Several important results follow from this. Firstly, this implies that neoclassical theories are suitable for explaining Korea乫s growth, with NGT playing a lesser, though still relevant role. Second, the prominence of neoclassical theory in explaining Korea乫s growth is encouraging as it suggests the recipe for success for others is simpler than might be thought from the 乪miracle乫 tag given to Korea by some. Finally, this paper concludes that Korea乫s government had a big role in driving growth though interventions; outward orientation, promotion of certain export industries and favourable loans to help said industries, allowed firms in those sectors to expand, invest, and make use of foreign technology. The government was also key in mobilising labour and promoting human capital acquisition.#p#分頁標(biāo)題#e#
However, as chapter four explored, the road to growth has been bumpy, and with certain turns others would not wish to follow; the road itself may not even be accessible for some nations yet, until preconditions to Korea乫s Blueprint are established. Overall, Korea乫s experience provides valuable lessons and examples for other nations to learn and follow respectively.
The issue of Korea as a Blueprint is made simpler by previously discussed results that suggest little TFP, and thus less importance attached to NGT. Following countries wishing to
35
decipher growth made primarily of TFP, and knowledge spill overs, would have had a very vague Blueprint, even before analysing the problems within. However, as touched upon in part three, NGT may play a further role in Korea乫s future growth as moves toward innovation, and indeed higher learning (Baek and Jones 2006), to compensate for the slowing of factor accumulation, and near exhausted labour shifts from agriculture to industry.
Analysing Korea乫s growth is pointless unless it has a subsequent applied analysis, just as discussing Korea as a Blueprint is flawed unless there is preceding detail about its growth. Therefore this paper presents both aspects together, a discussion of growth before a discussion of the external relevance of this growth path for others.
Future research into this topic would benefit from focusing on particular countries, as opposed to analysing several at once, as much of the literature describing growth in East Asia has done. Detailed discussion of particular countries, instead of broad surveys that take into account many different factors, will allow researchers a better idea of how particular countries growth experience can apply to others, instead of finding general correlations across various differing economies. In this respect, Korea乫s future development will provide interesting results crucial for understanding phases of growth; firstly, a long term analysis of how a country restructures and recovers after crisis (in Korea乫s case, the 1997 crisis), and secondly, how a country makes the transition to knowledge based growth (discussed in chapter three) once high rates of factor accumulation are no longer sustainable.
36
6.0 - Word Count
Total inclusive word count for main body of work (Chapters 1-5), excluding title, acknowledgements, contents, bibliography and appendices: 7972
37
7.0 - Bibliography
Amsden, A.H., 1989. Asia乫s Next Giant. 1st ed. Oxford: Oxford University Press
Ariff, M. and Khalid, A.M., 2000. Liberalization, Growth and the Asian Financial Crisis. 1st ed. Cheltenham: Edward Elgar
Baek, Y. and Jones, R.S., 2006. Sustaining High Growth Through Innovation: Reforming The R&D and Education Systems in Korea. Working Paper, OECD Economics Department, No. 470.
Barro, R.J., 1991. Economic Growth in a Cross-Section of Countries. The Quarterly Journal of Economics. Vol. 106 (2), pp407-443
Barro, R.J. and Sala-i-Martin, X., 1995. Economic Growth. 1st ed. New York: McGraw-Hill#p#分頁標(biāo)題#e#
Barro, R.J., 2001. Economic Growth in East Asia Before and After the Financial Crisis. Working Paper, National Bureau of Economic Research, No. 8330.
Collins, S.M., 1990. Lessons from Korean Economic Growth. The American Economic Review, Vol. 80 (2), pp104-107
Collins S.M, and Bosworth, B.P., 1996. Economic Growth in East Asia: Accumulation versus Assimilation. Brookings Papers on Economic Activity, Vol. 1996 (2), pp. 135-203
Dornbusch, R. and Park, Y.C., 1987. Korean Growth Policy. Brookings Papers on Economic Activity, Vol. 1987 (2), pp. 389-454.
Fine, B., 2006. The Developmental State & Political Economy of Development. In: Jomo, K.S. and Fine, B., eds. The New Development Economics. London: Zed Books, 101-122
Grossman, G.M. and Helpman, E., 1994. Endogenous Innovation in the Theory of Growth. The Journal of Economic Perspectives. Vol. 8 (1), pp. 23-44
Heston, A. Et al., 2006. Penn World Table Version 6.2, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, Available from: http://pwt.econ.upenn.edu/php_site/pwt62/pwt62_form.php [Accessed March 2008]
38
Hookon Park, P., 2000. A Reflection on the East Asian Development Model: Comparison of the South Korean and Taiwanese Experiences. In: Richter, F.J., ed. The East Asian Development Model. 1st ed. Basingstoke: Macmillian Press Ltd
Jones, C.I., 2002. Introduction to Economic Growth. 1st ed. New York: W.W. Norton
Jones, C.I., 1995a. R&D-Based Models of Economic Growth. Journal of Political Economy. Vol. 103 (4), pp759-784
Kim, J.K., et al., The Role of the Government in Promoting Industrialisation and Human Capital Accumulation in Korea. In: Ito, T. and Krueger, A.O., eds. Growth Theories in Light of the East Asian Experience. 1st ed. Chicago: University of Chicago Press, 181-200
Kim, K.S, and Park J.K., 1985. Sources of Economic Growth in Korea: 1963-1982. Seoul: Korea Development Institute. pp.xx-217
Kohli, A., 1999. Where Do High Growth Political Economies Come From? The Japanese Lineage of Korea乫s 乬Developmental State乭. In: Woo-Cummings, M. ed., The Developmental State. 1st ed. New York: Cornell University Press, 93-136
Krueger, A.O., 1995. East Asian Experience and Endogenous Growth Theory. In: Ito, T. and Krueger, A.O., eds. Growth Theories in Light of the East Asian Experience. 1st ed. Chicago: University of Chicago Press, 9-36
Krugman, P.R., 1994. The Myth of Asias Miracle. Foreign Affairs. Vol.73 (6), pp. 62-79
Krugman, P.R. and Obstfeld, M., 2006. International Economics, Theory & Policy. 7th Edition. Boston: Pearson
Kwon O.Y., 2001. Paradigm shift in Korean economic policy in the wake of the 1997 financial crisis. In: Chowdhury, A. and Islam, I., Beyond the Asian Crisis. 1st ed. Cheltenham: Edward Elgar
Levine, R. and Renelt, D., 1992. A Sensitivity Analysis of Cross-Country Growth Regressions. American Economic Review. Vol. 82 (4), pp942-63
Lucas Jr, R.E., 1993. Making a Miracle. Econometrica, Vol. 61 (2). pp. 251-272#p#分頁標(biāo)題#e#
Mankiw, N.G. et al., 1992. A Contribution to the Empirics of Economic Growth. The Quarterly Journal of Economics. Vol. 107 (2), pp407-437
39
Mankiw, N.G., 1995. The Growth of Nations. Brookings Papers on Economic Activity. Vol.1995 (1), pp.275-326
Martin, R. and Sunley, P., 1998. Slow Convergence? The New Endogenous Growth Theory and Regional Development. Economic Geography. Vol. 74 (3, pp. 201-227
Mitchell, G.R., 1997. Korea乫s Strategy for Leadership in Research and Development. U.S. Department of Commerce Office of Technology Policy
Moon, B.E., 1998. Exports, Outward-Oriented Development, and Economic Growth. Political Research Quarterly, Vol. 51 (1), pp. 7-36.
Nam, C.H., 1995. The Role of Trade and Exchange Rate Policy in Korea乫s Growth. In: Ito, T. and Krueger, A.O., eds. Growth Theories in Light of the East Asian Experience. 1st ed. Chicago: University of Chicago Press, 153-180
OECD., 2000. Korea and the Knowledge-Based Economy: Making the Transition. Paris : OECD/The World Bank
OECD., 2004. Understanding Economic Growth. 1st ed. Basingstoke: Palgrave Macmillan
O乫Hearn, D., 1999. Tigers and Transnational Corporations: Pathways from the Periphery?. In: Munck, R. and O乫Hearn, D., eds. Critical Development Theory. 1st ed. London: Zed Books
Pack, H., 1992. Technology Gaps between Industrial and Developing
Countries: Are There Dividends for Latecomers? In: Summers, L.H. and Shah, S., eds. Proceedings of the World Bank Annual Conference on Development Economics. Washington: World Bank
Perkins, D.H. et al., 2001. Economics of Development. 5th ed. New York: W.W. Norton & Company
Powell, B., 2005. State Development Planning: Did it Create an East Asian Miracle?. The Review of Austrian Economics, Vol.18 (3/4), pp305.323.
Putzel, J., 2002. Development States and Crony Capitalists. In: Masina, P.P., Rethinking East Asian Development. 1st ed. Richmond: Curzon Press, 161-188
40
Romer, P., 1986. Increasing Returns and Long-Run Growth. The Journal of Politcal Economy. Vol. 94 (5), pp1002-1037
Romer, P., 1990. Endogenous Technological Change. The Journal of Political Economy, Vol. 98 (5), pp. S71-S102.
Sachs, J.D. and Warner, A.M., 1997. Fundamental Sources of Long-Run Growth. The American Economic Review, Vol. 87 (2), pp. 184-188.
Schwartz, H.M, 2000. States versus Markets.2nd ed. Basingstoke: Palgrave,
Smith, H., 1998. Korea. In: McLeod, R.H and Garnaut, R., eds. East Asia In Crisis. 1st ed. London: Routeledge
Solow, R. M., 1956. A Contribution to the Theory of Economic Growth. Quarterly Journal of Economics. Vol. 70 (1), pp65-94
Solow, R.M., 1957. Technical Change and the Aggregate Production Function. Review of Economics and Statistics. Vol. 39 (3), pp312-320
Stiglitz, J.E., 2001, From miracle to crisis to recovery: lesson from four decades of East Asian experience. In. Stiglitz, J.E. and Yusuf, S., eds, Rethinking the East Asian Miracle. 1st ed. New York: World Bank, 509-526#p#分頁標(biāo)題#e#
Thirlwell, A.P., 2006. Growth and Development. 8th ed. Basingstoke: Palgrave.
Van, P.H. et al., 2003. Missing a Miracle: How Aggregate TFP Accounting Overlooks Sectoral Efficiency Gains. The Journal of the Korean Economy, Vol. 4 (1), pp1-28
Wade, R.E., 2004. Governing the Market. 2nd ed. Woodstock: Princeton University Press
Wang, J.H., 2005. From Technological Catch-Up to Innovation-based Economic Growth: South Korea and Taiwan Compared. Journal of Development Studies, Vol. 43 (6), pp1084.1104
World Bank., 1993. The East Asian Miracle. 1st ed. Oxford: Oxford University Press
41
World Bank (2007), World Development Indicators, Available from: http://esds.mcc.ac.uk/WDS_WB/TableViewer/dimView.aspx?ReportId=35 [Accessed April 2008]
Young, A., 1995. The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience. The Quarterly Journal of Economics, Vol. 110 (3), pp. 641-680
42
8.0 . Appendix I . Library Skills Report
Literature Search
(ECON 3023, 2007/08)
You will undertake a pilot literature search on your dissertation topic, develop a successful search strategy and retrieve and cite relevant references. It is an opportunity for you to lay some ground work for your dissertation.
This is a practical exercise which will help you to:
.
Construct a search strategy for your research
.
Select useful search terms for your subject
.
Identify appropriate sources in which to look for material
.
Decide on the relevance and usefulness of what you find
.
Record what you have found in standard Harvard format
Please record your sources, searches and selected references on the template below.
Subject
The subject of your final year dissertation.
43
How to submit your work
You should submit your work as a word processed document, using the template provided on below.
Hand in your document to the Economics Programme Support Office (Murray, rm. 3135), by 3pm on Monday 29th October 2007.
Assessment
In order to gain full marks for the Literature Search, you must complete it to a minimum standard.
To meet the minimum standard you must:
.
Provide the intended title of your dissertation or a sentence describing the research you intend to undertake
.
Select and search at least 6 relevant sources of information (e.g. WebCat, Econlit, relevant websites etc)
.
Carry out at least 10 appropriate searches
..
Appropriate searches will include a range of relevant keywords/search terms and a variety of search techniques (e.g. Boolean & truncation)
.
Identify at least 1 relevant document for each document type (i.e. books, journal articles etc) that is relevant to your research topic. Note that some document types may be inappropriate to your topic. The balance between document types will be determined by your topic.#p#分頁標(biāo)題#e#
.
Record your results (i.e. relevant documents found) in Harvard format
.
Present your work as a clear, word-processed document
44
Award of marks
2% - completion of literature search to minimum standard, as described above
1% - reasonable attempt at literature search but falling short of minimum standard
0 . no or poor attempt at literature search
Harry Gibbs
Economics Librarian
[email protected]
Literature Search
(ECON 3023, 2006/07)
Name
Matthew Wale
ID number
(4) 21023743
Title of your dissertation or a sentence describing your intended research topic.
Economic Growth in East Asian Tiger economies, and their reactions since the crisis of 1997/98. (Rough title)
45
46
BOOKS/BOOK CHAPTERS FOUND
DATABASE SOURCE SEARCHED
SEARCH TERMS USED
BOOKS/BOOK CHAPTERS FOUND
OUR EXAMPLE
EconLit 1969-2001/06
Monetary Union
Find terms: in title
GIORDANO, F. and PERSAUD, S. (1998) The Political Economy of Monetary Union: Towards the Euro, London: Routledge.
YOUR RESULTS
WebCat
WebCat
IBSS (all)
East Asian Miracle
east asian tige$ econom$
east AND asi? AND growth
Chang H乚J., 2006. The East Asian Development Experience : the miracle, the crisis and the future. London: Zed Books.
Lukauskas, A.J., 2001. The political economy of the East Asian crisis and its aftermath: tigers in distress. Cheltenham : Edward Elgar.
Jomo, K.S., 2007. Growth with equity in East Asia. In: Jomo, K.S., Flat world, big gaps: economic liberalization, globalization, poverty and inequality. London : Zed Books.
McLeod, R.H., 1998. East Asia in Crisis: From Being a Miracle to Needing One?
47
Google Scholar
East asian miracle crisis
Oxford : Routeledge.
48
JOURNAL ARTICLES FOUND
DATABASE SOURCE SEARCHED
SEARCH TERMS USED
JOURNAL ARTICLES FOUND
OUR EXAMPLE
Web of Science 1981-2001
TI=Monetary Union
HOSLI, M. (2000) The creation of the European and monetary union (EMU): intergovernmental negotiation and two- level games. Journal of European Public Policy, 7 (5), 744-66.
YOUR RESULTS
IBSS (all)
EconLit (Title only)
EconLit (all)
east AND asi? AND growth
east AND asi? AND crisis
east AND asian AND miracle AND crisis
Leung, H.M., 2007. Two new lessons from the Asian miracle. Journal of the Asia Pacific economy, 12 (1), 1乚16
Barro, R.J. and Lee, J.W., 2003. Growth and Investment in East Asia before and after the crisis. Seoul Journal of Economics. 16 (2), 83乚118.
Ritchie, J., 2004. Accountability in the East Asian Economic Miracle, Crisis and Recovery. Competition and Change. 8 (2), 91乚104.
49
WORKING/RESEARCH PAPERS FOUND
DATABASE SOURCE SEARCHED
SEARCH TERMS USED
WORKING/RESEARCH PAPERS FOUND#p#分頁標(biāo)題#e#
50
OUR EXAMPLE
EconLit 1969-2001/06
Monetary Union
OZKAN, F.G., SUTHERLAND, A. and SIBERT, A.C. (1997) Monetary Union, Entry Conditions and Economic Reform, Discussion paper, Centre for Economic Policy Research, No. 1720.
YOUR RESULTS
EconLit (all)
NBER
east AND asi? AND (crisis OR collapse)
East asian financial crisis
Cordon, M.W., 2007. The Asian Crisis: a perspective after ten years. Working Paper, Australian National University, No. 26
Barro, R.J., 2001. Economic Growth in East Asia Before and After the Financial Crisis. Working Paper, National Bureau of Economic Research, No. 8330.
51
OFFICIAL PUBLICATIONS FOUND
DATABASE SOURCE SEARCHED
SEARCH TERMS USED
OFFICIAL PUBLICATIONS FOUND
OUR EXAMPLE
UKOP
EMU or Monetary Union
DEPARTMENT OF TRADE AND INDUSTRY (1998) EMU: Its Impact on the UK, London: Department of Trade and Industry.
52
YOUR RESULTS
Official Papers I found were not really relevant to my aims.
53
54
OTHER REFERENCES FOUND
This section may include theses, conference proceedings, datasets, material on the Internet or any other types of reference that are RELEVANT to your topic.
DATABASE SOURCE SEARCHED
SEARCH TERMS USED
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英國南安普敦大學(xué)留學(xué)生畢業(yè)dissertationEuropean Monetary Union
STAVE, E.K. (1994) The main aspects of European Monetary Union. Ph.D. Thesis, Herriot-Watt University.
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East asia crisis
Yakoi, M., 2001. Financial crisis detection and containment: a supplemental regional framework? 乚 The case of East Asia. Ph.D. Thesis, Queen Mary and Westfield College.
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9.0 - Appendix II . Interim Report
Interim Dissertation Report
Matthew Wale, (4)21023743
Dissertation Supervisor: Xavier Mateos-Planas
Subject Area: Economic Growth
Using the discipline area 乬Economic growth and international disparities in income乭, I have decided to use my dissertation to investigate the East Asian Tiger economies, and the disparities in economic growth and performance before and after the East Asian Financial Crisis of the late 1990乫s. As such, my working title is;
Economic Growth of the East Asian Tigers before and after the 1997 Financial Crisis.
The main aims of this report will be to look at the growth of the so-called East Asian Tiger economies, or miracle economies, before and after the Financial Crisis of 1997, which was centred in East Asia. The four Tigers (Taiwan, Singapore, South Korea, Hong Kong) enjoyed rapid economic growth from the 1960乫s through to the 1990乫s, achieving unparalleled levels of economic growth, but the crisis emanating from Thailand in 1997 threatened to de-rail this. In 1997, the Thai Baht was allowed to float internationally by the Thai central bank, leading to a huge slide it its value, after the bank had spent the preceding months vainly attempting to prop up the Baht. The fall out from a crash in Thailand乫s currency spread around South East Asia, but not all of the Tigers were severely affected. South Korea and Singapore found themselves more vulnerable to the spread of the crisis than Taiwan and Hong Kong.#p#分頁標(biāo)題#e#
This report intends to look at the economic growth of the four Tigers proceeding the 1997 crisis, and take stock of some of the factors that drove this unique growth pattern. One interesting matter for debate in this field is exactly how these miracle economies grew as fast as they did; was it due to state interference, or did these nations embrace free market principles to achieve such rapid economic prosperity? Whilst not focusing too much on the crisis itself, the report will obviously make reference to, and interpret the 1997 crisis. The
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causes of the growth and its immediate fallout will be looked at, but the role of third parties such as the USA and the International Monetary Fund (IMF) will probably be put to one side.
The primary focus will be on the reactions of the Tiger乫s economies since the crisis, and a look at whether or not the four Tigers have returned to their pre-crisis growth figures. Recovery patterns across the region were different for different countries; given the mighty economy of Japan was left reeling by the ripples of the crisis, it stands to reason that the recovery of the Tigers will be an interesting aspect of this topic. Further to that, the report will attempt to explain the reasons behind the figures, and look into why not all of the Tigers bore the full brunt of the spill over from the crisis. Word count permitting, an interesting issue to investigate may be ask questions such as 乬Where would the Tigers be now, were it not for the crash?乭.
The report will be roughly structured in the following way;
Introduction - explaining my aims and intentions for the project, with some background information about the topic, i.e. brief country profiles for the four Tigers, focusing on the time period in question.
Pre-Crisis . looking into the rapid growth of the Tigers, the reasons behind this growth, and factors affecting the economies, as described above.
The crisis . this will not be the focus of the report, but detail will need to be presented about the crisis, its causes, and fallout.
Post . Crisis . the response of the Tigers乫 economies. Have growth levels returned? How did the crisis affect the Tigers? Is the outlook for the future optimistic? During the course of the project, and depending on findings, this section could follow many different paths.
Conclusion . a summation of my findings, with reference to each of the Tigers in turn. Obviously, I cannot accurately predict the content of this section before embarking on my research proper.
The above structure is of course a rough outline, and liable to change depending on the constraints of word counts, readily available (relevant) information, and the results the information produces.
This report will not require practical data gathering on my part. Key data regarding economic growth (such as GDP per capita, GDP growth,
代寫留學(xué)生英文dissertation提供留學(xué)生英語dissertation代寫服務(wù)，如有需求，請聯(lián)系QQ：949925041，電話：13917206902#p#分頁標(biāo)題#e#
value of exports etc.) are presently available from sources such as the World Bank. The challenge will be to find and interpret the appropriate data, and use it for effective comparisons of 乪before and after乫 trends. Where possible, I will use more basic methods of data analysis and representation in graphical (etc.)
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formats, as my econometrical experience is limited. I will also seek to make use of the currently available literature on what is a fairly contemporary topic.
Preliminary Bibliography
Chang H-J., 2006. The East Asian Development Experience : the miracle, the crisis and the future. London: Zed Books.
Lukauskas, A.J., 2001. The political economy of the East Asian crisis and its aftermath : tigers in distress. Cheltenham : Edward Elgar.
Arndt, H.W. and Hill, H., 1999. Southeast Asia乫s Economic Crisis: Origins, Lessons and the Way Forward. ISEAS : Singapore
Iyanatul, I. and Chowdhury, A. 2000. The Political Economy of East Asia: Post Crisis Debates. Oxford University Press : Oxford.
Leung, H.M., 2007. Two new lessons from the Asian miracle. Journal of the Asia Pacific economy, 12 (1), 1-16
Cordon, M.W., 2007. The Asian Crisis: a perspective after ten years. Working Paper, Australian National University, No. 26
Barro, R.J. and Lee, J.W., 2003. Growth and Investment in East Asia before and after the crisis. Seoul Journal of Economics. 16 (2), 83-118.
Ritchie, J., 2004. Accountability in the East Asian Economic Miracle, Crisis and Recovery. Competition and Change. 8 (2), 91-104.
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McLeod, R.H., 1998. East Asia in Crisis: From Being a Miracle to Needing One? Oxford Routeledge.
Barro, R.J., 2001. Economic Growth in East Asia Before and After the Financial Crisis. Working Paper, National Bureau of Economic Research, No. 8330.
Total Inclusive Word Count: 993.