Below is the summary of an article titled “The Myth of Asia’s Miracle” published in Foreign Affairs (November/December 1994) by Paul Krugman.
Pundits point to the awesome growth of East Asia's economies and fret that the West cannot compete. But there is nothing miraculous about the successes of Asia's "tigers." Their rise was fueled by mobilizing resources - increasing inputs of machinery, infrastructure, and education - just like that of the now-derided Soviet economy. Indeed, Singapore's boom is the virtual economic twin of Stalin's U.S.S.R. The growth rates of the newly industrialized countries of East Asia will also slow down. The lesson here for Western policymakers is that sustained growth requires efficiency gains, which come from making painful choices.
(a) Through what mechanism does Krugman predict that the growth of newly industrialized countries in East Asia will slow down? Be sure to explicitly mention to, what Krugman considered, the driving force of reducing growth rates of East Asian countries and explain how that works.
(b) This article attracted second wave of attention in 1997-98 when East Asian economies experienced sharp contraction in the economy hit by economic crisis. Some even praised that Krugman had predicted the crisis. Do you agree with this evaluation or not? Discuss.
(c) Krugman compares the Asian situation to the Soviet experience and argues that “Singapore's boom is the virtual economic twin of Stalin's U.S.S.R.”. Do you agree with this argument or not? Discuss.
The question in Economics is about an article written by Paul Krugman. The article in question here is “The Myth of Asia’s Miracle”. The article speaks about the reasons behind the sudden growth in Asian countries and their economies. The author of the article is sceptic whether or not the development or growth shown by the economies can be sustained into the future or not.
Total Word Count 588
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