Economic Expansion

 Essay about Economic Development

Making a Miracle

Author(s): Robert At the. Lucas, Junior.

Source: Econometrica, Vol. sixty one, No . a couple of (Mar., 1993), pp. 251-272 Published by: The Econometric Society

Stable URL: http://www.jstor.org/stable/2951551

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Econometrica, Vol. 61, No . a couple of (March, 1993), 251-272

PRODUCING A MIRACLE1

BY ROBERT

E. LUCAS, JR.

This kind of lecture research recent types of growth and trade searching for descriptions of technologies which might be consistent with shows of extremely rapid profits growth. Emphasis is placed within the on-the-job piling up of human capital: learning by doing. Possible connections among learning rates and international trade are discussed. KEYWORDS:

Growth, production, on-the-job schooling, learning.

1 ) INTRODUCTION

IN 1960, THE PHILIPPINES AND SOUTH KOREA had comparable standard of living, since measured by their per household GDPs of around $640 U. S. 1975. The two countries were similar in many various other respects. There have been 28 mil people inside the Philippines and 25 , 000, 000 in Korea, with somewhat over 50 % of both masse of operating age. 27 percent of Filippino's lived in Manila, twenty eight percent of South Koreans in Seoul. In both equally countries, most boys of primary institution age had been in school, many all women, but only about a quarter of secondary university age children were in school. Only 5 percent of Koreans in their early twenties were in college, as compared to 13 percent inside the Philippines. 26 percent of Philippine GROSS DOMESTIC PRODUCT was generated in agriculture, and twenty eight percent in industry. In Korea, the comparable quantities were 37 and 20%. Ninety 6 percent of Philippine goods exports contains primary goods and 5 percent of manufactured merchandise. In Korea, primary products made up 86 percent of exports, and manufactured products 14 (of which almost eight were textiles). From 1960 to 1988, GDP per capita inside the Philippines grew at about 1 ) 8 percent per year, about the average for per household incomes in the world as a whole. In Korea, above the same period, per household income grew at 6. 2 percent per year, a rate consistent with the duplicity of living standards just about every 11 years. Korean incomes are now similar to Mexican, Portuguese, or Yugoslavian, about three times incomes in the Philippines, and about one third of incomes in the United States. 2

I do not believe that it is in any way a great exaggeration to relate to this ongoing transformation of Korean world as a miracle, or to apply this term to the much the same transformations which might be occurring in Taiwan, Hong Kong, and Singapore. Never prior to have the lives of lots of people (63 mil in these four areas in 1980) gone through so speedy an improvement more than so long an interval, nor (with the tragic exception of Hong Kong) is...

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