Takeoffs, Landing, and Economic Growth

33 Pages Posted: 20 Apr 2017

See all articles by Debayan Pakrashi

Debayan Pakrashi

Indian Institute of Technology (IIT), Kanpur

Paul Frijters

Queensland University of Technology - School of Economics and Finance

Date Written: January 19, 2017

Abstract

Economic growth in the East Asian economies was remarkable during the latter part of the 20th century, starting with Japan just after World War II, followed by the East Asian Tigers and “tiger cubs” after that and, most recently, the People’s Republic of China and India. The high, sustained economic growth of these economies during their boom period reduced the disparity between the West and these countries (in terms of standards of living). The source of such extraordinary growth has been a matter of great interest since then, but no attempt has been made so far to model the political economy of takeoffs and landings in the context of economic growth. We empirically define takeoffs and landings, and provide an overlapping generation model with technological change and skill formation to explain the relatively stable growth rates in the Asian economies for decades. The existence of a technology trap, meaning economies cannot afford available advanced technology, may explain why takeoffs are relatively rare, even when many underdeveloped economies are still waiting for their own growth miracle.

Keywords: Takeoff, Landings, Technology Trap, Economic Growth, Economic Miracle, Overlapping Generation Model, Technological Change, Skill Formation

JEL Classification: O31, O43, O57

Suggested Citation

Pakrashi, Debayan and Frijters, Paul, Takeoffs, Landing, and Economic Growth (January 19, 2017). ADBI Working Paper No. 641, Available at SSRN: https://ssrn.com/abstract=2955480 or http://dx.doi.org/10.2139/ssrn.2955480

Debayan Pakrashi (Contact Author)

Indian Institute of Technology (IIT), Kanpur ( email )

Kharagpur
Kanpur, Uttar Pradesh 208016
India

Paul Frijters

Queensland University of Technology - School of Economics and Finance ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia
(07) 3864 9364 (Phone)
(07) 3864 1500 (Fax)

HOME PAGE: http://www.bus.qut.edu.au/paulfrijters/index.jsp

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