Measurements of TFP indicate that the East Asian success story is based on
A)a significantly different economic model from the one followed in the West.
B)unusually large amounts of innovation.
C)rapid increases in the education of the work force.
D)high amounts of savings and investment.

Question

Quizplus · Accepted Answer

Measurements of Total Factor Productivity (TFP) suggest that the East Asian success story is based on high amounts of savings and investment. East Asian economies were able to maintain high levels of investment in physical capital and technological upgrading, which allowed for sustained economic growth. This investment was supported by high levels of domestic saving, which allowed for the accumulation of capital and technology. While education levels and innovation were also important factors, they alone are not sufficient to explain the East Asian success story.

Measurements of TFP Indicate That the East Asian Success Story