Recent growth accounting studies of Hong Kong, Singapore, Taiwan and South Korea have found that the Solow residuals in these economies were relatively small. Given the high capital contributions, these results are often interpreted as evidence that factor accumulation, savings and investment...

Recent growth accounting studies of Hong Kong, Singapore, Taiwan and South Korea have found that the Solow residuals in these economies were relatively small. Given the high capital contributions, these results are often interpreted as evidence that factor accumulation, savings and investment...

This paper develops a method for interpreting growth accounting studies in terms of the neoclassical growth model. In particular it shows that the growth accounting contribution of capital reflects the distance of the economy from its steady state income level. The method is applied to studies...