The Productivity Debate of East Asia Revisited: A Stochastic Frontier Approach

This paper applies a stochastic frontier production model to the data from Penn World Table’s 49 countries over the period 1965-1990, to decompose total factor productivity growth into technical change and technical efficiency change. Empirical results show East Asian countries led the whole world in productivity growth, mainly because their technical efficiency gain was so much faster than that of other countries. East Asian countries also registered rapid technical change, which was comparable to that of the G6 countries after the late 1980s. The results provide evidence that negate the hypothesis that East Asian growth was mostly input-driven and unsustainable.East Asian Growth, stochastic frontier production model, total factor productivity, technical progress, technical efficiency

Endogenous Income Distribution with Product Obsolescence

Wage inequality in U. S. and UK has increased over the past 25 years. Paradoxically, skilled labor supply has also increased in both countries. This paper develops the dynamic general equilibrium model of product innovation with product obsolescence. We develop a model to provide an explanation of inequality phenomena between skilled and unskilled labor by the channel of innovation and market structure. This paper builds on the dynamic general equilibrium model of product innovation and incorporates overhead cost of the production of intermediate goods to capture endogenous growth rate of innovation, hazard rate, product life cycle and inequality.wage inequality, skilled and unskilled labor, product innovation, general equilibrium

COMPETITION AND GROWTH: A TIME SERIES ANALYSIS FOR SOUTH KOREA

By utilising South Korea’s annual data from 1986 to 2004, the regression results are found to be consistent with the hypothesis that more intense competition makes a substantial contribution to real per capita income growth rate. It is also evident in the structural change analysis that competition has intensified due to the regulatory reform over the period 1999 to 2004, which in turn enhanced the real per capita income growth rate. It has been observed that competition is highly sensitive to real per capita income growth rate. Therefore, the choice of South Korea’s policy instruments should be based upon the intensity of competition through the market monitoring mechanism of large companies (e.g., private lawsuits for damage compensation in antitrust cases) as well as regulatory reform.Competition, Real Per Capita Income Growth Rate, Structural Break Analysis, Market Monitoring Mechanism