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ECN 171 Economy of East Asia

Homework 2

1. Download the data for the Penn World Table (now maintained by UC Davis and the University of Groningen) in Excel format at www.rug.nl/ggdc/productivity/pwt .  You should obtain a file called ‘pwt1001.xlsx’.  

a.  Compute real GDP per capita for China (mainland), Hong Kong, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Thailand, and Vietnam by dividing rgdpo by pop. Chart them on one graph. Which entity has the highest and lowest recorded GDP per capita in 1960? In 2019?

b.  Look at household consumption (csh_c) and investment (csh_i) as a share of gdp.  

i. Compare the average of I/Y in these countries with that of the US between 1960 and 2019. Who invested more than the US as a fraction of GDP?  Who invested less?

ii. Create a bar chart with the averages for I/Y that you computed above and the average of C/Y in these countries over the same time period (1960-2019). Do you see a pattern between the ranking of investment-to-GDP ratios versus the ranking of consumption-to-GDP ratios? What is the implication of high investment rates for consumption?  Can you explain this using the national accounting identity (Y = C + I + G + NX, assume for simplicity that there is a closed economy).

iii. Have consumption-to-GDP ratios changed much 2000-2019 compared to 1960-1969 (or for Vietnam, 1970-79 due to missing earlier data)? Which two countries have the lowest average consumption ratio 2000-2019? What are the ratios?

From Asia Rising:

1.  What role did the Korean war play in Japan’s industrial development?

2. What role do you think the emergence of a middle class played in fueling growth in Japan?

3.  What investments in human capital do you see in Japan and South Korea in the film?

4.  What examples of a focus on heavy industry did you see in the film?

5.  Where did Park Chung Hee get the funds to finance the construction of the first large steel mill in South Korea?