Re: Japan 1973 Re: Concept of a "Growth Equilibrium"

[Ted Schmidt Economics & Finance <SCHMIDTP@xxxxxxxxxxxxxxxxxxxxxx>]

On  6-MAR-1996 22:58:14.39
 G. Kohler responds to Albus:

>On Sun, 3 Mar 1996 JSAlbus@xxxxxxx wrote:

.....Kohler:......> >
> >Japan, productivity growth rates (annual % change in real GDP per worker)
> >
> >1960-68  68-73  73-79  79-90
> >
> >8.5%     7.7%   2.9%   3.0%
> >
> >(Source: The Economist. _Guide to Global Economic Indicators._ New York:
> >John Wiley, 1994. p. 51. Table 4.6)
> >
>
>
> Albus writes:
.......>
> In the 1960 to 1973 time frame, the Japanese investment rate averaged around
> 34% of GDP (approximately double that of the U.S. and about 60% larger than
> the European community).
>
> It would be interesting to know what happened to the Japanese investment rate
> in the post 1973 era.
>
Kohler's response:

>>Kohler, addition:

>>The same source (Economist. Guide....) has the following additional data:

                  Japan, average annual growth rates

                       1960-68 68-73 73-79 79-89
Consumer expenditure     9.0    8.4    3.9   3.1
Real fixed investment   15.2   12.5    1.5   5.3

Real GDP                10.1    8.8    3.6   4.1(=79-90)


>>The 1973 drop in investment growth is from 12.5 to 1.5% per annum.
>>Which theory explains such a drop in investment growth,
>>considering the fact that similar changes occurred throughout OECD?

>>--GK

A response in the form of a quote from the master himself:
"It follows that of two equal communities, having the same technique but
different stocks of capital, the community with the smaller stock of capital
may be able for the time being to enjoy a higher standard of life than the
community with the larger stock; though when the poorer community has caught
up the rich--as, presumably, it eventually will--then both alike will suffer
the fate of Midas."  (GT, ch. 16,  p. 219)

T. Schmidt