Growth Econometrics in the Tropics: What Insights for Southeast Asian Economic Development?

Abstract

This paper attempts to distil the key conclusions from the very large literature on the empirics of growth and to apply them to the development record of the five major Southeast Asian economies for which we have reasonably long-term data - Indonesia, Malaysia, The Philippines, Singapore and Thailand. These five display a considerable range of development outcomes, ranging from consistently high growth, to episodes of boom and crisis, and to low average growth. After estimating a series of general empirical models from a large sample of countries, we examine how well these fit the observed outcomes in these particular Southeast Asian countries. Our broad finding is that the average model does reasonably well in explaining outcomes in Singapore and Thailand, but that the residuals for Indonesia, Malaysia and the Philippines are quite large and persistent across different specifications. Show more