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CHAPTER 1 - Coggle Diagram
CHAPTER 1
HPAEs' 8 characteristics
1. Rapid & sustained Eco growth
Average 5.5% annual per capita real income growth
Japan + 4 Tigers: rapid growth
Indo, Malay, Thai :arrow_upper_right: over time
2. :arrow_down: income inequality and poverty
HPAEs: :arrow_down_small: + :arrow_down: inequality
:arrow_down: poverty
:arrow_up: life expectancy (>70 years)
:star: 3. Agriculture growth :arrow_upper_right:
share of agri in GDP + employment :arrow_down:
agri output + productivity :Arrow_up:
Reasons
Land reform
Agri research and extensive services
Public investments in infrastructure
Low tax (direct & indirect)
=> :arrow_upper_right: industrialization in the early stage
4. Manufacturing exports :arrow_upper_right:
Flying geese pattern
Japan: early manufacturer + leading exporter in 1960s
labor extensive export industries then shifted to 4 Tigers
Then shifted to SEA NIEs
Japan + 4 Tigers relocated to SEA
Reasons:
domestic wage :arrow_upper_right:
land cost :arrow_upper_right:
environment :arrow_upper_right:
Japan relocated here through FDI
Geography + policy factors
SEA & 4 Tigers adopted favors to induce FDI
=> openess :arrow_up:: network, ideas, tech...
=> productivity :arrow_up:
5. :fast_forward: demographic transition
:fast_forward: To low birth rate (opportunity cost :arrow_up:)
:arrow_down: population growth rate
:fast_forward: To low death rate (:+1: health care)
=> :+1: condition for eco growth
:check::arrow_up_small: share of productive age population
:green_cross:population dividend disappear over longer term
6. :arrow_up_small: + :arrow_upper_right: Investment + saving rate
Investment (Public - Private)
Part of GDP
neither consumed nor used up in the production of other goods
Sources
Closed eco: domestic savings
Open eco: domestics saving, foreign borrowings, FDI
7. :arrow_up: Human capital
Per-capita income :arrow_up: => School enrollment rate :arrow_up:
Focus of education shifted over time
Primary :arrow_right: secondary
Reasons:
:+1: public policies
Culture
Measures of educational quality: Expenditures/student :arrow_upper_right:
8. Productivity :arrow_upper_right:
Labor productivity (GDP/input) :arrow_upper_right: => Per capita GDP :arrow_upper_right:
Reasons:
:star: Physical capital/worker :arrow_upper_right:
(capital goods :arrow_upper_right: + workers become more productive
Human capital :arrow_upper_right:
Tech, organization, specialization, innovation :arrow_upper_right:
Overall efficiency (TFP) :arrow_upper_right:
(cannot be measured by increase in total productivity)
Variables affecting growth rate
Dependent variable: per capita GNP
Key independent variables
Physical investment
Education
=> eco growth
Lower initial income level
=> higher + faster eco growth rate
:star:
Advantage of late-comers
Easier to catch up with productivity
Cheaper in acquiring tech + learning
Avoid mistakes
Easier inter-sectoral reallocation of labor from agri to industry (:sparkles: when investment in industry :arrow_upper_right:)
Sources of economic growth
Accumulation
Physical capital (based on high investment rate)
Human capital
:arrow_upper_right: labor productivity => :arrow_upper_right: per-capita GDP
2/3 of the GDP growth
Allocative Efficiency
Allocation of resources among competing ends :twisted_rightwards_arrows: overall productivity
Effective allocation => :arrow_upper_right: TFP
1/3 of the growth (mostly)
in labor intensive industry, from agriculture
Technical efficiency
Produce more output with given amount of inputs (allocated for the same use)
advanced countries:
technological progress
developing countries:
better incentive system, organization... to catch up with tech
1/3 - partly