Alwyn Young 1995 studying the growth performance of Asian Ti

Alwyn Young (1995) studying the growth performance of Asian Tigers finds that while productivity growth played a large role in the growth of Hong Kong’s income Singapore’s income growth was almost entirely driven by factor accumulation. He interprets this result as a bad news for Singapore. Why?

Solution

Ans

This is bad news in the sense that steady state growth rate will not increase. Study state growth rate will increase only due to technological change and productivity growth. This Leds to continuous growth.