Has the capital accumulation in the Asian miracle economies been fuelled by growth?

Jakob B. Madsen, Iqtiar Uddin Md Mamun

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1 Citation (Scopus)


The Asian growth miracle is often attributed to factor accumulation under the implicit assumption that savings, broadly defined, have been high and increasing due to exogenous forces. Using data for India, Indonesia, Korea, Singapore and Taiwan over the period 1870–2011 this article examines the causal relationship between growth and saving. The response of growth to savings is first estimated using instruments to generate exogenous variation in savings rates. The residual variation in growth that is not driven by savings is then used as an instrument to estimate the effect of growth on savings. The estimates show that the spectacular saving rates in the Asian miracle economies have been fuelled by growth, and not the other way around.
Original languageEnglish
Pages (from-to)3175-3194
Number of pages20
JournalApplied Economics
Issue number34
Publication statusPublished - 20 Jul 2016


  • Asian miracle economies
  • factor accumulation
  • growth
  • Saving
  • schooling

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