Factor Accumulation Without Diminishing Returns: The Case of East Asia

14 Pages Posted: 8 May 2006

See all articles by Peter Marcel Debaere

Peter Marcel Debaere

University of Virginia - Darden School of Business; Centre for Economic Policy Research (CEPR)

Ufuk Demiroglu

United States Congressional Budget Office (CBO)

Abstract

We investigate the similarity of the country endowments of the newly industrialized East Asian countries (NICs) and their major developed trading partners since the 1960s. In particular, we analyze their factor endowments in the years 1965, 1977, and 1990, using the lens condition of Deardorff (1994). Because of the similarity of endowments of the NICs and their developed-country trading partners, we cannot reject the hypothesis that these countries are diversified economies, able to produce the same set of goods since the 1960s. This empirical evidence supports the theoretical analyses of the East Asian growth miracle of Mankiw (1995) and Ventura (1997) in an environment in which factor accumulation did not imply decreasing returns to capital.

Suggested Citation

Debaere, Peter Marcel and Demiroglu, Ufuk, Factor Accumulation Without Diminishing Returns: The Case of East Asia. Review of International Economics, Vol. 14, No. 1, pp. 16-29, February 2006, Available at SSRN: https://ssrn.com/abstract=875927 or http://dx.doi.org/10.1111/j.1467-9396.2006.00558.x

Peter Marcel Debaere (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

HOME PAGE: http://www.darden.virginia.edu/html/direc_detail.aspx?styleid=2&id=5794

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Ufuk Demiroglu

United States Congressional Budget Office (CBO) ( email )

Ford House Office Building
2nd & D Streets, SW
Washington, DC 20515-6925
United States

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