Below is the instructions to improve/edit the essay – Assignment 2 document (See uploaded file):
1. Start by discussing the 3 functions that make up the SGM Production function, Savings/investment function and Breakeven investment function, which gives the steady-state (Just give one diagram in Supplementary PowerPoint slide 16 (Refer to uploaded file), which shows all 3 functions and steady-state). There is no need to derive the functions and show any mathematics. Instead just state the final equations for each function and discuss the significance (Assumptions are not necessary).
The feedback given from the marker was that the mathematics in this section reads like it was cut and paste from some source without any understanding of what the mathematics means. It is not even the model that we presented in class. The mathematics and figure 2 are unnecessary and it just reads like cut and pasted from somewhere with no understanding nor analysis.
2. Diminishing Marginal productivity of capital prediction (Present diagram on slide 9 of Supplementary Slides). The marker feedback that the current essay makes no sense in the theory that those countries cannot keep growing by adding more and more capital, and also implies the concept of convergence developing countries will grow faster and one day will catch up with developed countries.
THUS, please present and discuss the following
– Economic growth graph for Singapore (GDP growth are best drawn as a 2D column graph so you can years of high, low or negative growth good). For example: Higher growth in 1970 and 1980s and slower growth now.
– Present and discuss the share of investment/consumption/government spending/net exports to GDP in Singapore.
– The contribution of investment to GDP is lower now compared to the 1970s and 1980s when Singapore was accumulating infrastructure capital.
– Present capital productivity, labour productivity and TFP (from APO productivity database 2020) in Singapore (Answer the following question: Did you see any changes in capital productivity for Singapore? (Refer to the PDF Document Slide 4 for reference).
Figures 4 and 5 in essay: what do they mean? Your discussion reads like cut and paste and does not demonstrate your understanding.
3. Show two other key predictions of SGM. Eg: The impact of changes in saving rates (present diagram on supplementary slide 29) & answer the question: what is the application to Singapores economic growth experience?
– You can present Singapores national saving rate here (calculate and present saving rates from 2014 to 2018 from Singapore Figures in 2019) and discuss the current debate on GST increase, fiscal surpluses and the use of Singapores reserves which is essentially past savings.
4. Impact of change in population growth rates: What is the application to Singapores economic growth experience with regards to the 10 million population debate? Any evidence of capital dilution and falling GDP per capita in the late 2000s?
5. And the last prediction is key to the SGM the impact of change in total factor productivity A, only sustainable way to grow but not determined exogenously in the SGM which is the key limitation of the model, leading to endogenous growth models (present diagram on slide 37). Present and discuss the TFP, the contribution of capital and labour input to economic growth in relation to the Singapore economic growth experience what does the negative TFP for certain years mean?
6. After a short section on the key limitation of the SGM (summarize from PowerPoint slides is sufficient), discuss each endogenous growth theory, then follow up with the evidence for Singapore. Eg: Romers R&D is one key component that drives technological progress then present the Global Innovation Index diagram and how the Singapore government supports R&D previously and now. Other interesting endogenous growth theories openness to trade/FDI, industrial policy, education/training, protection of property rights/governance/corruption etc. Discuss key interesting periods in Singapores economic growth experience, why it happened and what government policies were in place then for each endogenous growth theory.
Organise your discussion on the Singapore growth experience based on the endogenous theories you discuss.
7. Provide an update on the impact of Covid-19 on Singapores economic growth experience in the last 2 years. This is an important part of the essay so please do allocate sufficient word count to this section (Refer to slide 4 of PDF Document)
The essay as a whole needs a major re-organisation: less on the theory and equations for the Solow model and more on its applications as well as Endogenous growth theories. Show evidence for Singapore needs to be structured and discussed according to predictions of SGM & endogenous growth theories in the essay.
