Asia’s Miracle: They Think It’s All Over – It Need Not Be Yet

Author: Crafts N.

Source: Economic Outlook, Volume 23, Number 1, November 1998 , pp. 11-21(11)

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Abstract:

In this article Nicholas Crafts reports that the crisis in East Asia is essentially a financial crisis and, as such, reflects failures of regulation and macroeconomic policy rather than a slowdown in underlying growth potential. In the past the Tigers have been very good at factor accumulation but less strong in the effective use of investment and in productivity growth. GDP/hour worked is still well below European levels. Accordingly there remains considerable scope for strong growth based on further catch up provided that the financial crises are resolved satisfactorily. History suggests that this is quite likely. Nevertheless, the leading tigers will need to improve their productivity performance if they are to sustain rapid growth and the example of Japan shows that this is not automatic and may not be easy.

Language: English

Document Type: Research article

Affiliations: 1: London School of Economics and Political Science

Publication date: 1998-11-01