From 1992, the paper is here note by the way an interesting written comment from Paul Krugman at the end. The basic story was that Hong Kong and Singapore had obtained their prosperity by two different paths. Hong Kong had made real productivity gains, but Singapore grew just by throwing more factors of production at the problem of economic growth, including a massive dose of savings and investment, including foreign investment. The share of investment in Singapore’s gdp rose from 9% in 1960 to 43% in 1984, while Hong Kong’s remained roughly steady at about 20%. If you back this out from national income statistics, you can measure that Singapore had very low levels of total factor productivity growth.But should we believe that story, which by now is twenty years old? After all, these days, Singapore is extremely interested in cutting-edge science and on the frontier in the biosciences and with satellite launches, among other areas. Hong Kong has done fine, but as a finance center and entrepot for the China trade. Not many people look to them as ideas leaders. Maybe both countries somehow turned on the proverbial dime, but I don’t believe the initial Young result for a few reasons:

via Marginal Revolution — Small steps toward a much better world..