Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited
The author's 1982 article on the fallacy of composition questioned the feasibility of generalizing the "G4" (Hong Kong (China), the Republic of Korea, Singapore, and Taiwan (China)) growth model based on rapid growth of exports, on g...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/366231468146085416/Exports-of-manufactures-and-economic-growth-the-fallacy-of-composition-revisited http://hdl.handle.net/10986/28031 |
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okr-10986-28031 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ABSOLUTE VALUE ACCOUNTING ADJUSTMENT COSTS AGRICULTURE ANNUAL GROWTH ASSET PRICE BASE YEAR BENCHMARK BENCHMARKS BENEFITS OF TRADE CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS COMMODITY CONSTANT DOLLARS CONSUMER PRICE INDEX COUNTRY MARKETS CURRENCY APPRECIATIONS CURRENCY MARKETS CURRENCY REALIGNMENT CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT IMBALANCE CURRENT ACCOUNT POSITIONS DEBT CRISIS DEMAND GROWTH DEPRECIATION DEVALUATIONS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT STRATEGY DOLLAR VALUES DOMESTIC CONSUMPTION DOMESTIC DEMAND DOMESTIC MARKETS DOMESTIC PRODUCTION ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIES OF SCALE ELASTICITY OF EXPORT EMERGING MARKET EMERGING MARKET ECONOMIES EQUILIBRIUM EQUIPMENT EXCHANGE MARKETS EXCHANGE RATE INTERVENTION EXCHANGE RATE NEEDS EXPANSION OF EXPORTS EXPORT DEMAND EXPORT EARNINGS EXPORT GROWTH EXPORT GROWTH RATE EXPORT GROWTH RATES EXPORT STRUCTURE EXPORT VOLUMES EXPORTERS EXTERNAL DEBT EXTERNAL DEFICIT EXTERNAL DEMAND EXTERNAL POSITION FEDERAL RESERVE FINANCIAL CAPITAL FINANCIAL CRISIS FISCAL POLICIES FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RATES FOREIGN RESERVES GDP GDP PER CAPITA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL MARKETS GROSS NATIONAL INCOME GROWTH MODELS GROWTH RATE GROWTH RATES IMBALANCE IMBALANCES IMPORT IMPORT GROWTH IMPORT-SUBSTITUTING INDUSTRIALIZATION IMPORTS INCOME ELASTICITY INDUSTRIAL COUNTRIES INDUSTRIAL COUNTRY INFLATION INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL ECONOMY INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL MARKET INTERNATIONAL STANDARD LEVELS OF IMPORT LOSS OF CONFIDENCE MACROECONOMIC ANALYSIS MARKET EXCHANGE RATES MARKET FORCES MARKET PENETRATION MARKET PRICE MARKET PRICES MARKET SHARE MERCANTILISM MONETARY FUND MULTILATERAL TRADE MULTILATERAL TRADE NEGOTIATIONS NATURAL RESOURCES NET EXPORTS NEWLY INDUSTRIALIZED COUNTRIES OIL EXPORTER OIL IMPORTER OIL PRICES OIL RESOURCES OUTPUT PENSION PER CAPITA INCOME POVERTY REDUCTION PRICE INDEX PRICE OF EXPORTS PROTECTIONIST PURCHASING POWER PURCHASING POWER PARITY RAPID EXPANSION RAPID EXPORT GROWTH RAPID GROWTH REAL APPRECIATION REAL APPRECIATIONS REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL EXPORTS REAL GDP REAL GROWTH RATE REAL GROWTH RATES REAL IMPORT RECESSION RELATIVE PRICES RETURN SOURCING SURPLUS LABOR TERMS OF TRADE TERMS OF TRADE EFFECT TOTAL EXPORTS TRADE BALANCE TRADE DEFICIT TRADE GROWTH TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICY TRADE STRATEGY TRADE STRUCTURE TRADE SURPLUS TRADE SURPLUSES TRADING TRADING PARTNER TRADING PARTNERS UPWARD PRESSURE URUGUAY ROUND VALUATION VALUATION CHANGES VALUE ADDED WARRANTS WORLD MARKETS WTO |
| spellingShingle |
ABSOLUTE VALUE ACCOUNTING ADJUSTMENT COSTS AGRICULTURE ANNUAL GROWTH ASSET PRICE BASE YEAR BENCHMARK BENCHMARKS BENEFITS OF TRADE CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS COMMODITY CONSTANT DOLLARS CONSUMER PRICE INDEX COUNTRY MARKETS CURRENCY APPRECIATIONS CURRENCY MARKETS CURRENCY REALIGNMENT CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT IMBALANCE CURRENT ACCOUNT POSITIONS DEBT CRISIS DEMAND GROWTH DEPRECIATION DEVALUATIONS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT STRATEGY DOLLAR VALUES DOMESTIC CONSUMPTION DOMESTIC DEMAND DOMESTIC MARKETS DOMESTIC PRODUCTION ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIES OF SCALE ELASTICITY OF EXPORT EMERGING MARKET EMERGING MARKET ECONOMIES EQUILIBRIUM EQUIPMENT EXCHANGE MARKETS EXCHANGE RATE INTERVENTION EXCHANGE RATE NEEDS EXPANSION OF EXPORTS EXPORT DEMAND EXPORT EARNINGS EXPORT GROWTH EXPORT GROWTH RATE EXPORT GROWTH RATES EXPORT STRUCTURE EXPORT VOLUMES EXPORTERS EXTERNAL DEBT EXTERNAL DEFICIT EXTERNAL DEMAND EXTERNAL POSITION FEDERAL RESERVE FINANCIAL CAPITAL FINANCIAL CRISIS FISCAL POLICIES FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RATES FOREIGN RESERVES GDP GDP PER CAPITA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL MARKETS GROSS NATIONAL INCOME GROWTH MODELS GROWTH RATE GROWTH RATES IMBALANCE IMBALANCES IMPORT IMPORT GROWTH IMPORT-SUBSTITUTING INDUSTRIALIZATION IMPORTS INCOME ELASTICITY INDUSTRIAL COUNTRIES INDUSTRIAL COUNTRY INFLATION INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL ECONOMY INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL MARKET INTERNATIONAL STANDARD LEVELS OF IMPORT LOSS OF CONFIDENCE MACROECONOMIC ANALYSIS MARKET EXCHANGE RATES MARKET FORCES MARKET PENETRATION MARKET PRICE MARKET PRICES MARKET SHARE MERCANTILISM MONETARY FUND MULTILATERAL TRADE MULTILATERAL TRADE NEGOTIATIONS NATURAL RESOURCES NET EXPORTS NEWLY INDUSTRIALIZED COUNTRIES OIL EXPORTER OIL IMPORTER OIL PRICES OIL RESOURCES OUTPUT PENSION PER CAPITA INCOME POVERTY REDUCTION PRICE INDEX PRICE OF EXPORTS PROTECTIONIST PURCHASING POWER PURCHASING POWER PARITY RAPID EXPANSION RAPID EXPORT GROWTH RAPID GROWTH REAL APPRECIATION REAL APPRECIATIONS REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL EXPORTS REAL GDP REAL GROWTH RATE REAL GROWTH RATES REAL IMPORT RECESSION RELATIVE PRICES RETURN SOURCING SURPLUS LABOR TERMS OF TRADE TERMS OF TRADE EFFECT TOTAL EXPORTS TRADE BALANCE TRADE DEFICIT TRADE GROWTH TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICY TRADE STRATEGY TRADE STRUCTURE TRADE SURPLUS TRADE SURPLUSES TRADING TRADING PARTNER TRADING PARTNERS UPWARD PRESSURE URUGUAY ROUND VALUATION VALUATION CHANGES VALUE ADDED WARRANTS WORLD MARKETS WTO Cline, William R. Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| geographic_facet |
China China, Hong Kong SAR Korea, Republic of Singapore Taiwan, China |
| relation |
Commission on Growth and Development Working Paper;No. 36 |
| description |
The author's 1982 article on the fallacy
of composition questioned the feasibility of generalizing
the "G4" (Hong Kong (China), the Republic of
Korea, Singapore, and Taiwan (China)) growth model based on
rapid growth of exports, on grounds that if all developing
economies pursued it, their combined manufactured exports
would eventually trigger protection in industrial countries.
The1984 book of author identified a safe speed limit of
about 10-15 percent annually for growth of developing
country exports of manufactures, well below the 25-35
percent rate of Korea and Taiwan, China in the 1960s and
1970s. This study revisits this question in the light of a
quarter-century of experience. It finds that developing
countries' aggregate manufactured exports grew at about
10 percent annually, a robust pace but within the speed
limits he had envisioned. Even so, in key sectors such as
apparel, import penetration levels have exceeded thresholds
that his earlier estimates would have suggested would
provoke protection, suggesting the importance of increased
World Trade Organization (WTO) discipline. The base of
manufactured exports from poor countries remains small
relative to that of China and the original G4, so there
should be considerable room for export growth from these
newcomers. However, a new macroeconomic version of the
fallacy of composition problem could arise: the growing
tendency of China and some other major emerging market
economies to pursue rapidly rising trade surpluses that have
their counterpart in an increasingly unsustainable U.S.
current account deficit. |
| format |
Working Paper |
| author |
Cline, William R. |
| author_facet |
Cline, William R. |
| author_sort |
Cline, William R. |
| title |
Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| title_short |
Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| title_full |
Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| title_fullStr |
Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| title_full_unstemmed |
Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited |
| title_sort |
exports of manufactures and economic growth : the fallacy of composition revisited |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/366231468146085416/Exports-of-manufactures-and-economic-growth-the-fallacy-of-composition-revisited http://hdl.handle.net/10986/28031 |
| _version_ |
1764465996211421184 |
| spelling |
okr-10986-280312021-04-23T14:04:46Z Exports of Manufactures and Economic Growth : The Fallacy of Composition Revisited Cline, William R. ABSOLUTE VALUE ACCOUNTING ADJUSTMENT COSTS AGRICULTURE ANNUAL GROWTH ASSET PRICE BASE YEAR BENCHMARK BENCHMARKS BENEFITS OF TRADE CAPITAL FLOWS CAPITAL GOODS CAPITAL INFLOWS COMMODITY CONSTANT DOLLARS CONSUMER PRICE INDEX COUNTRY MARKETS CURRENCY APPRECIATIONS CURRENCY MARKETS CURRENCY REALIGNMENT CURRENT ACCOUNT CURRENT ACCOUNT DEFICIT CURRENT ACCOUNT DEFICITS CURRENT ACCOUNT IMBALANCE CURRENT ACCOUNT POSITIONS DEBT CRISIS DEMAND GROWTH DEPRECIATION DEVALUATIONS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING ECONOMIES DEVELOPMENT STRATEGY DOLLAR VALUES DOMESTIC CONSUMPTION DOMESTIC DEMAND DOMESTIC MARKETS DOMESTIC PRODUCTION ECONOMIC GROWTH ECONOMIC POLICIES ECONOMIES OF SCALE ELASTICITY OF EXPORT EMERGING MARKET EMERGING MARKET ECONOMIES EQUILIBRIUM EQUIPMENT EXCHANGE MARKETS EXCHANGE RATE INTERVENTION EXCHANGE RATE NEEDS EXPANSION OF EXPORTS EXPORT DEMAND EXPORT EARNINGS EXPORT GROWTH EXPORT GROWTH RATE EXPORT GROWTH RATES EXPORT STRUCTURE EXPORT VOLUMES EXPORTERS EXTERNAL DEBT EXTERNAL DEFICIT EXTERNAL DEMAND EXTERNAL POSITION FEDERAL RESERVE FINANCIAL CAPITAL FINANCIAL CRISIS FISCAL POLICIES FOREIGN CURRENCIES FOREIGN CURRENCY FOREIGN EXCHANGE FOREIGN EXCHANGE RATES FOREIGN RESERVES GDP GDP PER CAPITA GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL CAPITAL GLOBAL CAPITAL FLOWS GLOBAL MARKETS GROSS NATIONAL INCOME GROWTH MODELS GROWTH RATE GROWTH RATES IMBALANCE IMBALANCES IMPORT IMPORT GROWTH IMPORT-SUBSTITUTING INDUSTRIALIZATION IMPORTS INCOME ELASTICITY INDUSTRIAL COUNTRIES INDUSTRIAL COUNTRY INFLATION INTEREST RATES INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL ECONOMIES INTERNATIONAL ECONOMY INTERNATIONAL INVESTMENT INTERNATIONAL INVESTORS INTERNATIONAL MARKET INTERNATIONAL STANDARD LEVELS OF IMPORT LOSS OF CONFIDENCE MACROECONOMIC ANALYSIS MARKET EXCHANGE RATES MARKET FORCES MARKET PENETRATION MARKET PRICE MARKET PRICES MARKET SHARE MERCANTILISM MONETARY FUND MULTILATERAL TRADE MULTILATERAL TRADE NEGOTIATIONS NATURAL RESOURCES NET EXPORTS NEWLY INDUSTRIALIZED COUNTRIES OIL EXPORTER OIL IMPORTER OIL PRICES OIL RESOURCES OUTPUT PENSION PER CAPITA INCOME POVERTY REDUCTION PRICE INDEX PRICE OF EXPORTS PROTECTIONIST PURCHASING POWER PURCHASING POWER PARITY RAPID EXPANSION RAPID EXPORT GROWTH RAPID GROWTH REAL APPRECIATION REAL APPRECIATIONS REAL EFFECTIVE EXCHANGE RATES REAL EXCHANGE RATE REAL EXPORTS REAL GDP REAL GROWTH RATE REAL GROWTH RATES REAL IMPORT RECESSION RELATIVE PRICES RETURN SOURCING SURPLUS LABOR TERMS OF TRADE TERMS OF TRADE EFFECT TOTAL EXPORTS TRADE BALANCE TRADE DEFICIT TRADE GROWTH TRADE LIBERALIZATION TRADE NEGOTIATIONS TRADE POLICY TRADE STRATEGY TRADE STRUCTURE TRADE SURPLUS TRADE SURPLUSES TRADING TRADING PARTNER TRADING PARTNERS UPWARD PRESSURE URUGUAY ROUND VALUATION VALUATION CHANGES VALUE ADDED WARRANTS WORLD MARKETS WTO The author's 1982 article on the fallacy of composition questioned the feasibility of generalizing the "G4" (Hong Kong (China), the Republic of Korea, Singapore, and Taiwan (China)) growth model based on rapid growth of exports, on grounds that if all developing economies pursued it, their combined manufactured exports would eventually trigger protection in industrial countries. The1984 book of author identified a safe speed limit of about 10-15 percent annually for growth of developing country exports of manufactures, well below the 25-35 percent rate of Korea and Taiwan, China in the 1960s and 1970s. This study revisits this question in the light of a quarter-century of experience. It finds that developing countries' aggregate manufactured exports grew at about 10 percent annually, a robust pace but within the speed limits he had envisioned. Even so, in key sectors such as apparel, import penetration levels have exceeded thresholds that his earlier estimates would have suggested would provoke protection, suggesting the importance of increased World Trade Organization (WTO) discipline. The base of manufactured exports from poor countries remains small relative to that of China and the original G4, so there should be considerable room for export growth from these newcomers. However, a new macroeconomic version of the fallacy of composition problem could arise: the growing tendency of China and some other major emerging market economies to pursue rapidly rising trade surpluses that have their counterpart in an increasingly unsustainable U.S. current account deficit. 2017-08-28T19:59:42Z 2017-08-28T19:59:42Z 2008 Working Paper http://documents.worldbank.org/curated/en/366231468146085416/Exports-of-manufactures-and-economic-growth-the-fallacy-of-composition-revisited http://hdl.handle.net/10986/28031 English en_US Commission on Growth and Development Working Paper;No. 36 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research China China, Hong Kong SAR Korea, Republic of Singapore Taiwan, China |