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Drivers of Economic Catch up in Asia: A Study of ASEAN Countries with Comparative Views of China and India
Drivers of Economic Catch up in Asia: A Study of ASEAN Countries with Comparative Views of China and India
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Date
2022
Authors
Khuong Vu
Hieu Nguyen
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Research Projects
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Abstract
This paper conducts a comprehensive examination of the sources of economic growth and catch-up of ASEAN countries since the Asian financial crisis, with comparative views of China and India. The study employs different decomposition frameworks to gain insights into the drivers of ASEAN economic performance over 1997-2017. Three findings are most notable. First, ASEAN countries, except for Brunei, recorded a strong catch-up performance, with labour productivity being the leading driver in most countries. Second, the drivers of labour productivity catch-up exhibit some distinctive patterns among countries, which depend on the level of income and economic structure. Third, in all decomposition analyses, ASEAN countries are well below China and India across sources of growth, which tends to suggest that ASEAN countries could improve their performance by enhancing market integration and policy coordination. Although the long-term prospect of ASEAN is bright, the COVID-19 pandemic and the recent military coup in Myanmar have indicated that the road to future prosperity of the region is expected to unexpectedly face formidable challenges.
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Keywords
Economic growth,
Structural change,
Productivi