File spoon-archives/marxism-thaxis.archive/marxism-thaxis_1998/marxism-thaxis.9801, message 253


Date: 	Mon, 12 Jan 1998 15:54:44 -0800
From: bhandari-AT-phoenix.Princeton.EDU (Rakesh Bhandari)
Subject: M-TH: Krugman


Recalling Krugman's defense in the New York Times last summer of
Indonesia's export industrialization program for its poverty reducing
effects (though raising the poverty line a mere 10% would have, I believed,
almost tripled the number of those in poverty even before the current
crisis), I mistakenly gave the impression that Krugman saw no problems in
the Asian growth miracle. Of course a few years back he published in
Foreign Affairs  a skeptical analysis of the Asian growth miracle, arguing
that as growth had been driven, as in the Soviet Union, by capital
accumulation rather than pure productivity gains, the marginal productivity
of capital would be likely to decline as the capital stock deepened-- that
is, as capital per worker in the Asian economies rises to the level of
Western economies. Couched as such analysis is in the capital theory of
neo-classical economics (what the hell is the marginal productivity of
capital?), I don't really get it. Just want to correct any false impression
I may have given.
Rakesh




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