Lecture 8: 1950-today

Question 1

What made up the “Gold Ages”?

Answer 1

Period of rapid economic growth throughout the industrialized world:

1. Rise of social-democratic policies
2. Keynesianism
3. growing living standards
4. fixed exchange rates and stability
5. European integration (EEC)
   → Catch up to the economic leader USA

Question 2

Why did Japan rise so much?

Answer 2

1. Strong wartime amour industry forced to adapt new technology
2. Efficient copying and improvement of US technology
3. Strong competition within country, but close to the outside
4. Pro-cycle policies
5. Strong human capital through life-time employment

Question 3

Why did China rise so much during and after the Mao period?

Answer 3

Great Leap (1959-1961) and Cultural Revolution (mid-1960s) expanded industrial and technological capabilities, education and public health but at cost of million deaths

After Mao’s death (1976): Rural liberalization, expansion of foreign trade and investment
→ very strong growth (8% 1980-95)

Question 4

Why did the Asian tigers rise so much?

Answer 4

Singapore, Hong Kong, South Korea and Taiwan: Rapid catch-up to developed countries from 1960s (7% growth/y)


→ through a lot of human capital investment, export oriented policies and strong state-led pushes to industrialize

Specialization:
Hong Kong/Singapore: Global financial centers
South Korea and Taiwan: Manufacturing electronics

Question 5

What did India miss to rise as much as China?

Answer 5

1. Too little public investment in infrastructure
2. Not making use of labour intensive industries