Measuring Productivity Growth in Asia: Do Market Imperfections Matter?

47 Pages Posted: 24 Nov 2003

See all articles by John G. Fernald

John G. Fernald

Federal Reserve Bank of San Francisco

Brent Neiman

University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)

Date Written: October 7, 2003

Abstract

Recent research reports contradictory estimates of productivity growth for the newly industrialized economies (NIEs) of Asia. In particular, estimates using real factor prices find relatively rapid TFP growth; estimates using quantities of inputs and output find relatively low TFP growth. The difference is particularly notable for Singapore, where the difference is about 2-1/4 percentage-points per year. We show that about 2/3 of that difference reflects differences in estimated capital payments. We argue that these differences reflect economically interesting imperfections in output and capital markets, including sizeable economic profits in Singapore and government-directed credit. We derive a measure of technology growth, corrected for the imperfections that we quantify.

Keywords: Asia, total factor productivity, Singapore, directed credit, growth accounting

JEL Classification: O47, F43, E44

Suggested Citation

Fernald, John G. and Neiman, Brent, Measuring Productivity Growth in Asia: Do Market Imperfections Matter? (October 7, 2003). FRB of Chicago Working Paper No. 2003-15. Available at SSRN: https://ssrn.com/abstract=459701 or http://dx.doi.org/10.2139/ssrn.459701

John G. Fernald (Contact Author)

Federal Reserve Bank of San Francisco ( email )

101 Market Street
San Francisco, CA 94105
United States
415-974-2135 (Phone)

HOME PAGE: http://www.frbsf.org/economics/economists/jfernald.html

Brent Neiman

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

HOME PAGE: http://faculty.chicagobooth.edu/brent.neiman/index.html

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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