Over the past decade, the exceptional growth of the four largest emerging market economies—Brazil, Russia, India, and China (the BRICs)—has reshaped the global economic landscape. Empirical studies have shown that long-term economic growth is mostly driven by several sources, including capital and labor accumulation as well as technological/efficiency progress. However, world economic history has repeatedly proven that economic growth based exclusively on factor accumulation rather than on productivity improvement is inevitably subject to diminishing returns, and therefore the initial rapid economic growth is not sustained for long. The goal of this paper is to examine and compare the growth performance of these four countries over the past twenty years to find out the driving forces behind their output change, hoping to shed light on whether the high growth rates in the BRICs seen in the last decade will be sustainable.
Growth in the BRICs: Past Trends and Future Prospects
Wednesday, July 20, 2011