Asian Miracles, or Not

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Asian Miracles, or Not?

• J.D. Han

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1. Criticisms of Asian Miracles

• Paul Krugman
• Growth is due to increased factor intensity,
  or increases in K, and L input, and Not much due
  to Technical Innovation According to
  Neoclassical Theory, there will be convergence,
  and the East Asian growth is not sustainable.
• Of course Krugman does not think much of Social
  Captial, or Human Capital as a separate factor
  for growth

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Evidence

• Growth Accounting applied to East Asia does not
  show Technology as an Important Factor
• Refer to my note on Growth Accounting
• In the East Asian setting but GA is limited and
  incomplete.
• Yes, in Neo-classical model, growth slows down
  without technical innovation.
• However, in Endogenous Growth Model, even if
  technology is not an important factor, it does
  not mean that the growth will slow down.

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2) Asian (Financial) Crisis

• Corruption at all levels of society
• Lack of Transparency - Opaqueness of Governance
• Vulnerable to Herding

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Reflection

• Opaqueness also exists in Western Economies
• Transparency may not be the only way to
  Information Efficiency
• Dominicans and Jews Need not Apply in Cents
  and Non-Senses by J. Carr
• Transparency may not be culturally possible
• Zen(?) From Heart to Heart(????)

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3) Japan Long Term Recession

• What were the causes of the Japanese Economic
  Recession since the 1990s?
• -Liquidity Trap(Krugman), or simply Hollowing
  of the Domestic Economy(?? ???)?
• -Both are due to Grim Prospect of the Economy
  and thus the lack of investment despite a high
  saving.
• -What are the causes for Hollowing?
• There is always a possibility of hollowing in
  East Asia.
• Will she be able to rise again so that her
  economic growth picks up?

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4) Flying Geese Model and Problems

• (i) What is Flying Geese (??) Model?
• Japan as the leader
• Korea and Other LDCs
• China

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• (ii) Its bad implications Northeast Asian
  Supply Chain
• Flying Geese Model and Processing Economy in
  East Asia 'Northeast Asian Supply Chain'

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2. East Asian Recovery and

• East Asian Miracles live on declared by the
  recent reports by the World Bank
• And there is another really Big Miracle happening
  in
• China,
• which is the most baffling and complex