Rapid Growth and Macroeconomic Stability

In 1993, World Bank defined Hong Kong, Indonesia, Malaysia, Singapore, South Korea, Taiwan, Thailand as HPAEs (High-Performing Asian Economies). World Bank admired their high growth. In this paper, we evaluate the result of total package of their policy, Rapid Growth and Macroeconomic Stability. We can scientifically measure the potential gain from stabilization policy following Lucas(1987) and utilize this measure for evaluation of their performance. Our conclusion is that, compared to G7 countries, high growth of HPAEs is generally accompanied with higher variance and their average deviation rate of risk free growth rate to original growth rate is relatively larger. It means that their high growth is supported by policies with higher risks. Our natural inference leads to that their high growth needs more prudent risk management policy, if they keep the current growth enhancement policy.