3 Paul Krugman, an American economist and the winner of the Nobel Prize in Economics, wrote a famous paper in the 1990s

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3 Paul Krugman An American Economist And The Winner Of The Nobel Prize In Economics Wrote A Famous Paper In The 1990s 1 (56.15 KiB) Viewed 44 times

3 Paul Krugman, an American economist and the winner of the Nobel Prize in Economics, wrote a famous paper in the 1990s outlining the myths surrounding the Asian miracle of the 20th century, Rather than it being a miracle, Paul Krugman presented a less dazzling critique of Asia's economic success and suggested a slowing down pace of Asia's growth. In this paper, he proposed a dichotomy of inspiration- perspiration growth. The perspiration economic growth implies that the economy is driven mainly by the accumulation of production factors (such as physical capital accumulation), while the inspiration economic growth implies that the economy is driven mainly by productivity growth and technical efficiency. (Total 15') (1) Use Solow Model to explain the inspiration-perspiration dichotomy (7") (2) This Figure shows the productivity index of China and Former Soviet Union (FSU). Use Inspiration- perspiration dichotomy to discuss economic growth of these two countries (6) (3) What factors may contribute to differences of productivity index between two countries? (2') 2.5 2 FSU China 1.5 üren 1 0.5 0 1950 1960 1970 1975 1965 1980 1955 1990 2000 1985 1995 2005 2010 (15.09)