1 East Asian Growth in View of West European Experience

This paper extends Wan (2004) and regards the East Asian economies as success cases for catching-up in a globalized environment, where America has succeeded Britain as the leader in technology. Statistics show that over the last 60 years, West European economies, within the Western societies and East Asian economies, among the Non-Western societies are the only two groups which have generally managed to reduce their per capita real GDP gap versus America. In contrast, most of the other economies have lost ground. This validates the thesis of Kuznets (1982) on development, where trade and investment form channels of technology transmission. We believe that the ubiquitous, recalcitrant steady-state gap vs. the US is a litmus test for explaining growth and development. Our model of interdependent growth explains both the observation of Lucas that “the mid-income countries grow the fastest, next the high-income countries, with the low-income countries growing the slowest ” and the twin-peak distribution found by Quah.