Asian Development Review: Volume 33, Number 2
Asia’s future growth prospects are key to the evolution of the world economy. By the middle of this decade, Asia’s contribution to the world’s gross domestic product growth had surpassed 60%.
The spectacular growth performance of the People’s Republic of China and the growth acceleration of India have had significant implications for poverty reduction and shifted the axis of the global economy toward Asia. Studying Asia’s future potential growth—including its determinants, obstacles, and policy influences—is essential to understanding the direction of the world economy.
This special issue of the Asian Development Review presents a series of studies that focus on potential growth and its determinants, which we define as the maximum capacity of an economy, or the growth rate of the labor force plus the growth rate of technical progress (labor productivity).
About the Asian Development Review
The Asian Development Review (ADR) is a professional journal for disseminating the results of economic development research relevant to Asia and the Pacific. ADR is published twice a year, in March and September, by MIT Press.
- Special Issue on Potential Growth and Misallocation in Asia - Guest Editor: Miguel A. León–Ledesma
- Potential Growth in Asia and Its Determinants: An Empirical Investigation - Matteo Lanzafame
- Higher volatility in actual growth has significantly negative effects on potential growth. Thus, stabilization policies can have beneficial effects on Asian economies’ long-term growth performance.
- Potential Output in Asia: Some Forward-Looking Scenarios - Andrew Burns
- Results suggest that in the absence of further capital deepening, and assuming continued total factor productivity growth at recent rates, potential output growth across economies could slow from a median of 4.6% during 2010–2015 to 2.7% between 2035 and 2040.
- Population Aging and Potential Growth in Asia - Keisuke Otsu and Katsuyuki Shibayama
- An increase in the share of the population over 64 years of age will significantly lower output growth through decreased labor participation. Population aging can also reduce economic growth through increased labor income taxes and dampened productivity growth.
- The Role of Structural Change in the Economic Development of Asian Economies - Neil Foster–McGregor and Bart Verspagen
- Results suggest that in most Asian economies labor productivity growth was the dominant source of gains in GDP per capita, with the observed gains in labor productivity often driven by changing labor productivity within sectors rather than by shifts in employment across sectors.
- Misallocation and Productivity: The Case of Vietnamese Manufacturing - Doan Thi Thanh Ha, Kozo Kiyota, and Kenta Yamanouchi
- Viet Nam’s policies may constrain its largest and most efficient producers, and coddle its smallest and least efficient ones.
- Misallocation, Access to Finance, and Public Credit: Firm-Level Evidence - Miguel A. Le´on–Ledesma and Dimitris Christopoulos
- Access-to-finance obstacles and private credit increase the dispersion of distortions. Public credit has a very small effect. For firms that do not face financial obstacles, public credit increases the dispersion of distortions; for firms that face financial obstacles, it slightly decreases dispersion.
- Sectoral Infrastructure Investments in an Unbalanced Growing Economy: The Case of Potential Growth in India - Chetan Ghate, Gerhard Glomm, and Jialu Liu Streeter
- Policy reforms relating to sectoral tax rates, sectoral infrastructure investments, and labor market frictions can have a sizable effect on growth and potential growth in the Indian context.
- The Political Economy of the Middle-Income Trap: Implications for Potential Growth - Yikai Wang
- This paper studies the relationship between growth, policies, institutions, and fundamentals. Understanding the relationship allows for the design of more efficient aid programs to help the growth of middle-income economies, especially in the long run.