Potential Growth in Emerging Asia
January 13, 2014
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Summary
Using three distinct approaches—statistical filtering, production function, and multivariate model— this paper estimates potential growth for China, India, and five ASEAN countries (Indonesia, Malaysia, the Philippines, Thailand, and Vietnam) during 1993–2013. The main findings include: (i) both China and India have recently exhibited a slowdown in potential growth, largely reflecting a decline of total factor productivity (TFP) growth; (ii) by contrast, trend growth for the five ASEAN countries has been rather stable and might even have increased marginally, with the notable exception of Vietnam;(iii) over the longer term, demographic factors will be much more supportive in India and some ASEAN economies than in China, where working-age population should start shrinking, with the overall dependency ratio climbing by the end of this decade. Improving or sustaining potential growth calls for broad structural reforms.
Subject: Aging, Capital accumulation, Inflation, Labor, Labor force participation, National accounts, Population and demographics, Prices, Production, Total factor productivity
Keywords: Aging, ASEAN economy, Asia and Pacific, Capital accumulation, China, dependency ratio, economy, emerging Asia, India, Inflation, inflation picture, Labor force participation, non-accelerating inflation rate of unemployment, potential growth, production function, total factor productivity, trend growth, WP
Pages:
26
Volume:
2014
DOI:
Issue:
002
Series:
Working Paper No. 2014/002
Stock No:
WPIEA201402
ISBN:
9781484345726
ISSN:
1018-5941
