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Real Gdp In Pre‐War East Asia: A 1934–36 Benchmark Purchasing Power Parity Comparison With The U.S

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  • Kyoji Fukao
  • Debin Ma
  • Tangjun Yuan
Abstract
This article provides estimates of purchasing power parity (PPP) converters for expenditure side GDP of Japan/China, Japan/U.S. and China/U.S. in 1934–36 through a detailed matching of prices for more than 50 types of goods and services in private consumption and about 20 items or sectors for investment and government expenditure. Linking with the earlier studies on the price levels of Taiwan and Korea relative to Japan, we derive the mid‐1930s benchmark PPP adjusted per capita income of Japan, China, Taiwan and Korea at 32, 11, 23, and 12 percent of the U.S. level respectively. These estimates correct the consistent downward bias in East Asian income levels based on market exchange rate conversions. Compared with Angus Maddison's estimates based on the 1990 benchmark back‐projection, our current‐price based result are 18 and 44 percent lower for Japan and Korea, and 4 and 10 percent higher for Taiwan and China respectively in the mid‐1930s. We develop a preliminary theoretical and empirical framework to examine the possible source of the biases in the back‐projection method. The article ends with a discussion on historical implications of our findings on the initial conditions and long‐term growth dynamics in East Asia.

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  • Kyoji Fukao & Debin Ma & Tangjun Yuan, 2007. "Real Gdp In Pre‐War East Asia: A 1934–36 Benchmark Purchasing Power Parity Comparison With The U.S," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 53(3), pages 503-537, September.
    • Handle: RePEc:bla:revinw:v:53:y:2007:i:3:p:503-537
    DOI: 10.1111/j.1475-4991.2007.00243.x
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    Cited by:

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    3. Marianne Ward & John Devereux, 2021. "New Income Comparisons for the late Nineteenth and Early Twentieth Century," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 222-247, March.
    4. Ma, Debin, 2021. "Ideology and the Contours of Economic Changes in Modern China during 1850-1950," CEPR Discussion Papers 15835, C.E.P.R. Discussion Papers.
    5. Yuan, Tangjun & Fukao, Kyoji & Wu, Harry X., 2010. "Comparative output and labor productivity in manufacturing between China, Japan, Korea and the United States for ca. 1935 - A production-side PPP approach," Explorations in Economic History, Elsevier, vol. 47(3), pages 325-346, July.
    6. Baomin Dong & Jiong Gong & Kaixiang Peng & Zhongxiu Zhao, 2015. "Little Divergence: Evidence from Cotton Textiles in Japan and China 1868–1930," Review of Development Economics, Wiley Blackwell, vol. 19(4), pages 776-796, November.
    7. Kyoji Fukao & Harry X. Wu & Tangjun Yuan, 2008. "Comparative Output and Labour Productivity in Manufacturing for China, Japan, Korea and the United States in Circa 1935 by a Production PPP Approach," Global COE Hi-Stat Discussion Paper Series gd08-018, Institute of Economic Research, Hitotsubashi University.
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    9. Baten, Joerg & Ma, Debin & Morgan, Stephen & Wang, Qing, 2010. "Evolution of living standards and human capital in China in the 18-20th centuries: Evidences from real wages, age-heaping, and anthropometrics," Explorations in Economic History, Elsevier, vol. 47(3), pages 347-359, July.
    10. Lisha Mengge, 2024. "Foreign trade and economic performance in China, 1860–1911," French Stata Users' Group Meetings 2024 14, Stata Users Group.
    11. Baten, Joerg & Ma, Debin & Morgan, Stephen & Wang, Qing, 2009. "Evolution of living standards and human capital in China in 18-20th century: evidences from real wage and anthropometrics," Economic History Working Papers 27870, London School of Economics and Political Science, Department of Economic History.
    12. MA, Ye & JONG, Herman de, 2016. "Unfolding the Turbulent Century: A Reconstruction of China's Economic Development, 1840-1912," Discussion paper series HIAS-E-29, Hitotsubashi Institute for Advanced Study, Hitotsubashi University.
    13. Broadberry, Stephen & Fukao, Kyoji & Zammit, Nick, 2015. "How Did Japan Catch-up On The West? A Sectoral Analysis Of Anglo-Japanese Productivity Differences, 1885-2000," CAGE Online Working Paper Series 231, Competitive Advantage in the Global Economy (CAGE).
    14. Myung Soo Cha, 2012. "Wage Convergence and Divergence in East Asia, 1900-39," Global COE Hi-Stat Discussion Paper Series gd12-253, Institute of Economic Research, Hitotsubashi University.
    15. Michael Artis & Toshihiro Okubo, 2011. "Does International Trade Really Lead To Business Cycle Synchronization?—A Panel Data Approach," Manchester School, University of Manchester, vol. 79(2), pages 318-332, March.
    16. Woltjer, P. & Smits, Jan-Pieter & Frankema, Ewout, 2010. "Comparing Productivity in the Netherlands, France, UK and US, ca. 1910:A new PPP benchmark and its implications for changing economic leadership," GGDC Research Memorandum GD-113, Groningen Growth and Development Centre, University of Groningen.
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    18. Lee, Hun-Chang & 李, 憲昶, 2007. "When and how did Japan catch up with Korea?: A comparative study of the pre-industrial economies of Korea and Japan," CEI Working Paper Series 2006-15, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    19. Ward, Marianne & Devereux, John, 2012. "The Road Not Taken: Pre-Revolutionary Cuban Living Standards in Comparative Perspective," The Journal of Economic History, Cambridge University Press, vol. 72(1), pages 104-132, March.
    20. Baten, Joerg & Pelger, Ines & Twrdek, Linda, 2009. "The anthropometric history of Argentina, Brazil and Peru during the 19th and early 20th century," Economics & Human Biology, Elsevier, vol. 7(3), pages 319-333, December.

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