TY - JOUR
T1 - Service Sector Productivity and Economic Growth in Asia
AU - McKibbin, Warwick
AU - Jong-Wha, Lee
PY - 2018
Y1 - 2018
N2 - The paper explores the historical experience of productivity growth in the Asian economies over recent decades, with a focus on the service sector. Based on this historical experience, the paper then evaluates the impact of more rapid growth in labor productivity in the service sector in Asia using an empirical general equilibrium model that allows for goods and capital movements across sectors and economies, and consumption and investment dynamics. We find that faster productivity growth in the service sector in Asia contributes to sustained and balanced growth of Asian economies, but the dynamic adjustment is different across economies. In particular, during the adjustment to higher services productivity growth, there is a significant expansion of the durable manufacturing sector that is required to provide the capital stock that accompanies higher economic growth.
AB - The paper explores the historical experience of productivity growth in the Asian economies over recent decades, with a focus on the service sector. Based on this historical experience, the paper then evaluates the impact of more rapid growth in labor productivity in the service sector in Asia using an empirical general equilibrium model that allows for goods and capital movements across sectors and economies, and consumption and investment dynamics. We find that faster productivity growth in the service sector in Asia contributes to sustained and balanced growth of Asian economies, but the dynamic adjustment is different across economies. In particular, during the adjustment to higher services productivity growth, there is a significant expansion of the durable manufacturing sector that is required to provide the capital stock that accompanies higher economic growth.
U2 - 10.1016/j.econmod.2018.05.018
DO - 10.1016/j.econmod.2018.05.018
M3 - Article
SN - 0264-9993
VL - 74
SP - 247
EP - 263
JO - Economic Modelling
JF - Economic Modelling
ER -