Question

Discuss in detail long-term implications for economic growth in East Asian economics systems.

Answer 1

Long term implications for economic growth in East Asian Economic System:

The east asian countries include Taiwan province of China, Hong kong, Singapore and Korea has a spectacular growth over the past 30 years which has amazed economics profession. The reason behind their success they are patiently worked hard to fulfill their hunger for success. They have followed the Confucian philosophy which means respecting their elders in China and its provinces to maintain the pattern of success. These East Asian countries are known as Four Tigers has grown over the past generations but nobody seems to agree how and why. So we will discuss below how and why such huge success in these countries,

The success of these countries are based on growth accounting which deals with three elements used for the production of goods and services are Labour, Capital, and Technology.

Labour and Capital:

Labour and Capital collectively known as ' Factors of production' labour being the workforce and capital includes capital goods that are the investment of vehicle, machine and buildings which are used by the workforce to manufacturing goods and services.

Technology:

Technology refers to the methods used or implied by labour and capital for the effective and efficient production of goods and services.

Although most of the economists denied the above factors being only reason for such successful growth.

Like for example in the Study of Solow model according his studies he found that accumulation of capital and increase in workforce have minor effect on the growth whereas increase in the use of technology has increased the rate of output.Further studies have confirmed the same.

Based on these arguments it concludes that the East Asian economies uses high rate of technology to increase and maintain the growth rate in the long. These economies have succeeded because they learned to use technology faster and more efficiently than their competitors did.

The East Asian countries focuses on small markets which provide daily essential goods and trade them all over the world except their rival countries. They focus on small gains with patient and hard work.