A recent study comparing China and India’s economic performance – which uses a simple growth accounting exercise to produce estimates of contributions of education, labor, and capital in agriculture, industry and services sectors – results in interesting perspectives on the sources of economic growth in these two huge countries. The study looks at economic experiences in each country from 1978-2004 and though the nature of the report is to examine significant developments over the past quarter century, the analysis pretty much stops at 2004. Considerable shifts and changes have taken place in each respective country since 2004 so this report, though in-depth, is – at best – a historical reflection which does not suggest direct implications for present-day or future projections of China or India’s growth patterns.
For a modern-historical perspective, the paper is certainly worth reading.
Accounting for Growth: Comparing China and India by Barry Bosworth and Susan M. Collins (Brookings Institution), a working paper of the National Bureau of Economic Research (NBER), Washington DC. No. 12943, February 2007.
The paper can be downloaded for free at: http://www.nber.org/papers/w12943.