Potential Growth in Asia and Its Determinants: An Empirical Investigation

This paper contributes to the literature on growth in Asia in several respects. I provide estimates of potential growth for 21 Asian economies using an aggregate supply model with time-varying parameters and a Kalman filtering methodology. My estimates indicate that the actual growth slowdown experi...

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Autor principal:	Matteo Lanzafame
Formato:	article
Lenguaje:	EN
Publicado:	World Scientific Publishing 2016
Materias:	Asian economies Kalman filter potential growth Social sciences and state - Asia (Asian studies only) H53
Acceso en línea:	https://doaj.org/article/a235756f2cf54bb2af6e1cbbc1000a1f
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spelling	oai:doaj.org-article:a235756f2cf54bb2af6e1cbbc1000a1f2021-12-02T12:20:35ZPotential Growth in Asia and Its Determinants: An Empirical Investigation0116-11051996-724110.1162/ADEV_a_00070https://doaj.org/article/a235756f2cf54bb2af6e1cbbc1000a1f2016-09-01T00:00:00Zhttps://www.mitpressjournals.org/doi/pdf/10.1162/ADEV_a_00070https://doaj.org/toc/0116-1105https://doaj.org/toc/1996-7241This paper contributes to the literature on growth in Asia in several respects. I provide estimates of potential growth for 21 Asian economies using an aggregate supply model with time-varying parameters and a Kalman filtering methodology. My estimates indicate that the actual growth slowdown experienced by many of these economies in the 2000s is associated with a falling trajectory in potential growth. Relying on Bayesian model averaging, I select robust determinants of potential growth and find that the latter is driven by the technology gap, trade, tertiary education, and institutional quality, as well as by working-age population growth. Effective reforms in these areas can help counterbalance declines in potential growth in Asia. I also investigate the relationship between business cycle features and potential growth, finding that higher volatility in actual growth has significantly negative effects on potential growth. Thus, stabilization policies can have beneficial effects on Asian economies’ long-term growth performance.Matteo LanzafameWorld Scientific PublishingarticleAsian economiesKalman filterpotential growthSocial sciences and state - Asia (Asian studies only)H53ENAsian Development Review, Vol 33, Iss 2, Pp 1-27 (2016)
institution	DOAJ
collection	DOAJ
language	EN
topic	Asian economies Kalman filter potential growth Social sciences and state - Asia (Asian studies only) H53
spellingShingle	Asian economies Kalman filter potential growth Social sciences and state - Asia (Asian studies only) H53 Matteo Lanzafame Potential Growth in Asia and Its Determinants: An Empirical Investigation
description	This paper contributes to the literature on growth in Asia in several respects. I provide estimates of potential growth for 21 Asian economies using an aggregate supply model with time-varying parameters and a Kalman filtering methodology. My estimates indicate that the actual growth slowdown experienced by many of these economies in the 2000s is associated with a falling trajectory in potential growth. Relying on Bayesian model averaging, I select robust determinants of potential growth and find that the latter is driven by the technology gap, trade, tertiary education, and institutional quality, as well as by working-age population growth. Effective reforms in these areas can help counterbalance declines in potential growth in Asia. I also investigate the relationship between business cycle features and potential growth, finding that higher volatility in actual growth has significantly negative effects on potential growth. Thus, stabilization policies can have beneficial effects on Asian economies’ long-term growth performance.
format	article
author	Matteo Lanzafame
author_facet	Matteo Lanzafame
author_sort	Matteo Lanzafame
title	Potential Growth in Asia and Its Determinants: An Empirical Investigation
title_short	Potential Growth in Asia and Its Determinants: An Empirical Investigation
title_full	Potential Growth in Asia and Its Determinants: An Empirical Investigation
title_fullStr	Potential Growth in Asia and Its Determinants: An Empirical Investigation
title_full_unstemmed	Potential Growth in Asia and Its Determinants: An Empirical Investigation
title_sort	potential growth in asia and its determinants: an empirical investigation
publisher	World Scientific Publishing
publishDate	2016
url	https://doaj.org/article/a235756f2cf54bb2af6e1cbbc1000a1f
work_keys_str_mv	AT matteolanzafame potentialgrowthinasiaanditsdeterminantsanempiricalinvestigation
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Potential Growth in Asia and Its Determinants: An Empirical Investigation

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