Asian Economic Essay Example | Topics and Well Written Essays - 1750 words

Asiatic Economic - Essay caseThe 1993 World Bank constitution research report (Ryan 802) named The East Asian Miracle, identified eight high-performing Asian economies (HPAEs) (Ryan 802) and classified them into three distinct groups according to the duration of uninterrupted positive real economic crop rates between 1960 and 1990 (Ryan 802). Japan al star occupied the first group. By the 1960s, Japan had already establish matured as an economy by maintaining a remarkably high focus on economic development. Hence it had become a leader with an enviable record showing sustained economic suppuration for thirty consecutive years. The second group consisted of four countries recognized as four Asian tigers namely, Singapore, Hong Kong, mainland China and South Korea. All these four economies had witnessed soaring economic emergence rates consistently since the mid-1960s until the mid 1990s. collar separate countries, Thailand, Malaysia and Indonesia, were referred to as newly i ndustrializing economies (NIEs) (Ryan 802) by the World Bank. These countries that made the third group of HPAEs had been included in the list of the HPAEs in the beginning of 1970s. The outstanding growth rates and economic performances reflected by the eight nations had one thing in common. Excepting Japan, which had been categorized as a developed country by the 1960s, all the other seven countries had adopted strategic macroeconomic policies and implemented them to manage their economic activities, coupled with carefully selected policy interventions by their individual governments. Research reveals that in all these cases, the government played a decisive map in mobilization of resources. Government policies were assisted by foreign direct investment (FDI) and technological rapture from other industrialized nations of the world, particularly Japan and the USA (Ryan 802). Causes of the financial collapse in Asian economies laboured dependence on cheap wear down enter Initial ly, competitive advantage of these countries was founded on their endowment of considerable labor. Since supply of labor was abundant in these countries, labor input was cheap, which created competitive advantage for these countries in adopting labor intensive technologies of production. However, as the knowledge intensity increased in the exports made by these countries they change magnitudely started to avow on highly skilled labor force that was more productive than low skilled laborers and was alike more disciplined. Krugman had made a controversial contention on the phenomenon of economic growth of the Asian economies (65). The historied economist had put that these countries would inevitably face a downfall in their economic growth. Since the lofty growth rates of these countries were achieved principally through incorporation of higher amounts of labor input along with capital input into the production process of these economies. This led to higher output and hence higher GDP, but, did not increase the profits level of productivity. This was a stage when the economies were moving along the revenue curve in the zone of increasing returns. According to Krugman, it could be anticipated that these economies would reach the range of diminishing returns (Krugman 65) that would ultimately