Article Critique: The Myth of Asia’s Miracle
This article throws cold water on the enthusiasm about Asia’s economy boom to most economists. There are two aspects should be seriously considered when assessing economic growth: the increase in inputs and increases in the output per unit of input which so called efficiency. The author compares Soviet Union to other Asia countries which infer Asian growth seems to be driven by extraordinary growth in inputs rather than by gains in efficiency. This growth will be slow down at last because the ability to mobilize resources but not use them efficiently and the basis of input-driven are not the real economy prosperity. For this aspect, I totally agree with Mr. Krugman. He is objective instead of following the others. On the other hand, I think the author underestimated the potential of Eastern economies. Although it didn’t show an unusual and impressive rate of growth in the efficiency of the economy, it hardly means that the growth would never happen. Eastern countries are at their first step of development which no doubt need more input such as education, labor resource and capital. After the input being increased to the saturated level, the efficiency may be followed up, too. Take Japan as an example, its science and technology have been dramatically improved. Also, the management level of Japanese companies such as Toyota is now world-leading. The author is so optimistic that he took the gap between Western and Eastern economies for granted.
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