TY  - JOUR
AU  - Hulten,Charles R.
AU  - Srinivasan,Sylaja
TI  - Indian Manufacturing Industry:  Elephant or Tiger?  New Evidence on the Asian Miracle
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7441
PY  - 1999
Y2  - December 1999
UR  - http://www.nber.org/papers/w7441
L1  - http://www.nber.org/papers/w7441.pdf
N1  - Author contact info:
Charles R. Hulten
Department of Economics
University of Maryland
Room 3105, Tydings Hall
College Park, MD 20742
Tel: 301/405-3549
Fax: 301/405-3542
E-Mail: hulten@econ.umd.edu

Sylaja Srinivasan
Bank of England
Threadneedle Street
London EC2R 8AH
ENGLAND
E-Mail: Sally.Srinivasan@bankofengland.co.uk
AB  - We estimate the rate of total factor productivity growth in Indian manufacturing industry for the period 1973-1992, and compare the results to those obtained by Young for the East Asian Tigers.  We then interpret our results in light of Krugman's hypothesis that, because the Asian Miracle was driven by capital formation under diminishing marginal returns, it is not sustainable.  We suggest a reinterpretation of the sustainability problem that recognizes the true role of TFP as a motive force in output growth.  Past studies have compared the TFP residual to the growth rate of output and used this ratio as a measure of the importance of TFP as a source of growth.  We argue that this is an erroneous way of assessing the role of TFP, because it ignores the additional capital formation made possible by an increase in productivity and therefore understates productivity's true importance.  Our estimates suggest that the understatement may be quite large, and that one might better ask if the growth rate of TFP, rather than capital growth, is sustainable.
ER  -