Growth Accounting, an Empirical Application to Several Countries of the World and Latin America

Abstract

Through this research, we will do an economic growth accounting exercise for the following countries: United States, and Southeast Asian countries, Singapore, South Korea, Taiwan, China. We also included Chile, Argentina, Colombia, Ecuador, and Bolivia in the measurement.

We conclude that Singapore, South Korea, and Taiwan stand out for the accelerated evolution in the dynamics of the variables, which has allowed Latin American countries to be left behind for a long time. China, in terms of GDP per worker, only at the beginning of the 21st century has been able to leave Bolivia behind, and in very recent years Ecuador. If China is a monster in terms of total GDP, it is not in terms of GDP per worker.

Based on mathematical analysis, we conclude that the countries of Southeast Asia, in the 1970s and 1980s, based their growth on productivity improvements, from then on growth reverts in favor of accumulation of factors. China has based its growth on the accumulation of physical capital.

The United States is the only country of those analyzed whose growth based on productivity does not end.

The Latin American countries, when compared to all of the above, show a "dim" glow. The only exception is Chile, one of the few that appears in first place in many economic rankings, and which bases its growth dynamics on the accumulation of physical capital, but at rates lower than those of Asia.