| Budget Amount *help |
¥1,800,000 (Direct Cost: ¥1,800,000)
Fiscal Year 1995: ¥400,000 (Direct Cost: ¥400,000)
Fiscal Year 1994: ¥1,400,000 (Direct Cost: ¥1,400,000)
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| Research Abstract |
In order to substantiate the flying-geese pattern of development for East Asian countries in the postwar period, we have constructed a link CGE (Computable General Equilibrium) model of 9 industries covering 10 countries including Japan and the U.S., and applied it to both static and dynamic simulations. Theory describes the flying-geese pattern as an evolutionary process of comparative advantages caused by the change in technology and industry from labor intensive to capital intensive one which occurs in accordance with the rise in the wage-rental ratio. Our simulation results indicate, however, that the dominant factor which causes the change in comparative advantage or the flying-geese pattern of development is not the change in the nature of technology and industry but the overall improvement in productivity, i.e., TFP.In this sense, the hypothesis of "zero TFP growth" in "The Myth of Asia's Miracle" by Paul Krugman must be investigated in more detail and deeply on the basis of the
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CGE framework. The result was presented at international conferences held at University of California and Bologna University. [See] (1) .
In parallel with the link CGE,we planned to analyze the inflation problem in China by using a country CGE model for China. But we found in the process a new method of analyzing sectoral price changes based on IO tables, so that we changed our original plan and applied the new method to the 1987 and 1990 IO tables of China to analyze inflation in the 1987-90 period on the sectoral basis. According to our analysis, two-digit increases in output price during this period are half explained by the wage increase, but the remaining half is due mostly to the "deterioration" of TFP,which is caused by the inefficiency in intermediate and capital inputs but not labor. Again, the Krugman's hypothesis must be investigated in more detail also for China. [See] (2) .
(1) M.Ezaki and S.Ito, "The Flying-Geese Pattern of Development in East Asia : A General Equilibrium Approach, " Discussion Paper No.31, GSID Nagoya University, July 1995.
(2) M.Ezaki, S.Ito, M.Wang and K.Itakura, "Inflation and Price Competitiveness in China, " Discussion Paper No.41, GSID Nagoya University, March 1996. Less
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