Problem Set 1

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ECN171 Economy of East Asia
Problem Set 1

The data for this problem set is posted on SmartSite in the Resources folder. It was downloaded from the Penn World Tables version 7.1, which is publicly available at http://pwt.sas.upenn.edu/php_site/pwt_index.php .

1. Graph the GDP [per capita] of the East Asian countries in PS1_data.xls on one graph. Which East Asian country is the largest [richest] in 1960? In 2010? When did the switch occur? 2. Calculate the growth rates (log difference, using natural logs) of GDP for each country in each year. Calculate the mean and standard deviation of these growth rates over the entire period for which data is available for each country. Which 3 countries grew the fastest? Which country experienced the most volatile growth rate (highest standard deviation of the growth rate)? 3. Examine the growth rates for Japan and South Korea. Have their growth rates changed over time? When did they have the highest periods of growth? The lowest? 4. Compare the growth rates observe in Y per capita (in US constant dollars) in #2 above with that of the US. Who has grown faster than the US (on average) since 1950? Who has grown more slowly? 6. The series `ki’ in the dataset is investment as a percentage of GDP (I/Y). Compare the average of I/Y in the Asian countries with that of the US between 1960 and 2010. Who invests more than the US as a fraction of GDP? Who invests less?

From the Introduction in Schuman, “The Miracle”:
7. Describe economic conditions across East Asia in 1960. How did they compare economically to other developing nations at the time, like Zimbabwe and Iraq?
8. Why does Schuman argue that the rapid economic growth in East Asian nations since 1960 is “the single most important trend in world history since the end of World War II—with a longer lasting and deeper impact than either the fall of Communism or the war on terror?” 9. How did Asia’s economic status compare to Western Europe’s in 1600? How did the Industrial...
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