23 Jul '13, 4pm
Paul Krugman Is As Wrong About China As He Was About Singapore
Back in 1994, Krugman similarly assessed the Singapore economy. “…Singapore is an economic twin of the growth of Stalin’s Soviet Union,” he wrote in Foreign Affairs (November/December, The Myth of Asia’s Miracle). In 1994, remember, the Soviet Union shone chiefly as a massively failed economic experiment. Krugman simultaneously offered duplicate reasoning on the other fast growing Asian economies, Taiwan, Hong Kong and South Korea. The Krugman argument, nearly a generation ago, on the Asian Tigers closely parallels his current reasoning on China. They had expended or were on the verge of consuming their entire available capital and labor resources, he contended, and lacked any signs of future productivity improvement. He wrote that they had already achieved most of their potential, and for Singapore, he wondered only how fast it would fall.