Service sector productivity and economic growth in Asia

Jong-Wha Lee and Warwick McKibbin

Economic Modelling, 2018, vol. 74, issue C, 247-263

Abstract: 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.

Keywords: Growth; Services; Asia; Global model; Dynamics; Structural change (search for similar items in EconPapers)
JEL-codes: J21 O11 O14 O41 O53 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Service Sector Productivity and Economic Growth in Asia (2014)
Working Paper: Service Sector Productivity and Economic Growth in Asia (2014)
Working Paper: Service Sector Productivity and Economic Growth in Asia (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:74:y:2018:i:c:p:247-263

DOI: 10.1016/j.econmod.2018.05.018

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