The Asian miracle and modern growth theory

The article argues that the rapid growth in a number of Asian economies tha t occurred between 1960 and 1996 was accompanied by a major change in the s tructure of their economies including shifts in the size of firms and the s ectors of specialisation. These changes were a fundamental component of the growth process. While capital accumulation was an important source of grow th, its productive assimilation was a critical component of the success of these economies. Estimates of the contribution of total factor productivity to aggregate growth that neglect these phenomena may lead to erroneous est imates.