Accounting for Growth: Comparing China and India

33 Pages Posted: 13 Mar 2007 Last revised: 24 Mar 2007

See all articles by Barry Bosworth

Barry Bosworth

Brookings Institution - Economic Studies Program

Susan M. Collins

Brookings Institution - Economic Studies Program; Georgetown University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2007

Abstract

We compare the recent economic performances of China and India using a simple growth accounting framework that produces estimates of the contribution of labor, capital, education, and total factor productivity for the three sectors of agriculture, industry, and services as well as for the aggregate economy. Our analysis incorporates recent data revisions in both countries and includes extensive discussion of the underlying data series. The growth accounts show a roughly equal division in each country between the contributions of capital accumulation and TFP to growth in output per worker over the period 1978-2004, and an acceleration of growth when the period is divided at 1993. However, the magnitude of output growth in China is roughly double that of India at the aggregate level, and also higher in each of the three sectors in both sub-periods. In China the post-1993 acceleration was concentrated mostly in industry, which contributed nearly 60 percent of China's aggregate productivity growth. In contrast, 45 percent of the growth in India in the second sub-period came in services. Reallocation of workers from agriculture to industry and services has contributed 1.2 percentage points to productivity growth in each country.

Suggested Citation

Bosworth, Barry and Collins, Susan Margaret1, Accounting for Growth: Comparing China and India (February 2007). NBER Working Paper No. w12943, Available at SSRN: https://ssrn.com/abstract=969950

Barry Bosworth (Contact Author)

Brookings Institution - Economic Studies Program ( email )

1775 Massachusetts Avenue, NW
Washington, DC 20036
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202-797-6000 (Phone)
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Susan Margaret1 Collins

Brookings Institution - Economic Studies Program ( email )

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

Georgetown University - Department of Economics ( email )

Washington, DC 20057
United States

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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