Total factor productivity of Singapore : the road to sustainable growth.

Two decades ago, in the early 1990s, academics have been so mesmerised by the rapid growth of the East Asian Economies; they coined it “The East Asian Miracle”. They cogitated about the unprecedented phenomenon and initiated an intellectually stimulating debate on the cause. Voluminous amounts of empirical papers poured into academic journals and two main groups emerged. One group can be identified as the fundamentalist who suggested that there was “no miracle” and the growth had been mainly input driven. They can be represented by (Young, 1992, 1994a, 1994b; Kim and Lau, 1994; Krugman, 1994; Collins and Bosworth, 1997). The other group was the assimilationist (Dahlman and Westphal, 1981; Dahlman et al, 1987; Hobday, 1994a, 1994b, 1994c, 1995; Romer, 1993a, 1993b), who disagreed with the “input driven” argument and suggested that the commonality among the achieving East Asian Countries was the acquisition and mastery of foreign technology. Singapore was one of the countries, which was covered in the debate. The question was whether Singapore can continue to grow through capital accumulation, given the negative productivity growth measured by Young (1992). The debate gradually quieted down and the episode concluded without a consensus. However in 2010, the Singapore government embarked on an ambitious campaign in 2010 to bring Singapore government back on path to achieve productivity growth of 2-3% annually over the course of the next 10 years. With the void in productivity growth estimates since 1990, this paper aims to address whether Singapore has moved on from the negative productivity growth in the 1970 to 1990. Further, the result after 1990 was evaluated to analyse the sources of growth. Lastly, based on our results, future implications were discussed.Bachelor of Art