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Growth of Real GDP and Total Factor Productivity in Asia with an Emphasis on Malaysian Growth

  • Sibabrata DasEmail author
  • Mukti Upadhyay
Article

Abstract

This paper estimates growth models for a panel of 15 Asian countries during 40-plus years from the early 1970s to 2014. The focus then shifts to Malaysia for which an annual time-series model is also estimated for the same time period. Both types of models indicate significant influence of human capital either directly on output growth or on growth through total factor productivity. We find that the lower the development level of a country (i.e., a greater income gap), the greater the total factor productivity growth which therefore permits faster income convergence. There is some evidence of interaction between human capital and the income gap as well which leads to an even bigger impact of human capital on total factor productivity growth. The interaction between human capital and openness produces a greater effect on growth in Malaysia based on the time-series model than its effect based on the panel model. Our results suggest that, barring large external shocks, a continued focus on human capital development should help to prevent growth slowdown in Malaysia over the next 15 years.

Keywords

Real GDP growth Total factor productivity Panel data model Time series model Malaysia 

JEL Codes

O47 O53 

Notes

Disclaimer

The views expressed in the paper are those of the authors alone and not those of the International Monetary Fund or Eastern Illinois University.

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Copyright information

© International Atlantic Economic Society 2020

Authors and Affiliations

  1. 1.Strategy, Policy, and Review Department, International Monetary FundWashingtonUSA
  2. 2.Department of Economics, Eastern Illinois UniversityCharlestonUSA

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