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Capital accumulation and economic growth : the Korean paradigm (English)

The purpose of this paper is to reaffirm certain notions that have provided the foundations of development economics, but which now are coming increasingly under attack: that growth in such pacesetters as the Republic of Korea, Japan and Brazil has principally arisen from capital accumulation; and that investment during the important initial phase of their industrialization was often only distantly related to market forces. The discussion is opened with a brief description of the turmoil sweeping economics and specifically, development economics. Drawing upon this, the paper discusses models derived from the neoclassical paradigm, and compares and contrasts this paradigm of development with the experience of Latin American countries and Japan. In this context, the paper moves to two more eclectic models which are very much in the spirit of development economics. One is the so-called bureaucratic authoritarian model, and the other, a model of Japanese development. In the final section, the study narrows our focus to Korea and show how these models can illuminate Korea's investment policies during the sixties and the seventies. The paper concludes that a simple neoclassical paradigm is not sufficient to explain Korea's successful economic development.

Details

  • Author

    Yusuf, S. Peters, R.

  • Document Date

    1985/02/28

  • Document Type

    Staff Working Paper

  • Report Number

    SWP712

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    Korea, Republic of

  • Region

    East Asia and Pacific,

  • Disclosure Date

    2010/07/01

  • Doc Name

    Capital accumulation and economic growth : the Korean paradigm

  • Keywords

    capital accumulation;rise and fall;modern economic growth;foreign trade regime;efficient allocation of resource;efficiency of resource use;high growth rate;gross domestic investment;political activities;price mechanism;total labor force;mature market economy;balance of power;contribution of investment;supply of capital;absence of market;effective exchange rate;engine of growth;free trade policy;effective protection rates;shortage of capital;number of scholars;construction of infrastructure;continuity of policy;mobilization of capital;rate of growth;undervalued exchange rate;access to capital;incidence of market;domestic resource mobilization;international trading system;structure of incentive;philosophy of science;per capita income;public sector investment;channels of communication;output per worker;supply of labor;import substitution;Industrial Policies;import substitute;export market;explanatory variable;export promotion;market force;industrial growth;rational expectation;Industrial Policy;International Trade;investment policy;research program;financial system;capital formation;neoclassical school;government intervention;price distortion;sector model;import control;economic history;market failure;administrative guidance;foreign market;domestic sources;political science;Exchange Rates;business sector;

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Citation

Yusuf, S. Peters, R.

Capital accumulation and economic growth : the Korean paradigm (English). Staff working paper ; no. SWP 712 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/820461468758389409/Capital-accumulation-and-economic-growth-the-Korean-paradigm