Macroeconomic Stability of HPAE Countries
In the past forty years, specific countries in East Asia have presented a sustained economic growth in comparison to others globally. These eight countries are Japan, Singapore, Hong Kong, South Korea, Taiwan, Indonesia, Malaysia, and Thailand. They are referred to as the high performing Asian economies (HPAEs) because of their miraculous growth in the past several decades (World Bank, 1993). Macroeconomic stability is one of the factors that contribute to their success. According to the World Bank (1993), macroeconomic stability was defined as keeping inflation under control, managing external debt well, and resolving macroeconomic crises quickly. How such stability is manifested in these countries is discussed in this paper. Their focus on education was the driving force of the HPAEs’ success.
Reasons for growth
The fast growth of the above-mentioned countries have been attributed to implemented policies and specific conditions in Asia. According to (Radelet, Sachs and Lee, 1997), there are four main reasons that these countries experienced fast growth compared to other nations in the world. The first is that each of the HPAEs had “substantial potential for catching up.” In the 1960s, they were still having low incomes. However, there was already an emphasis on education, thus they were already producing highly-educated workers. The second is that their “geographical and structural characteristics” were very much favorable to their development. All these countries have also been affected by the Second World War and the changes that followed in terms of demography also favored faster growth. The third reason is their strategies and policies being conducive to economic growth. The final reason is that these countries’ recognize the role that “labor-intensive” manufactured exports” has in the world economy. The leaders were aware that to be able to participate in the global economy there was a need to implement...
Please join StudyMode to read the full document