Domestically – the Asian countries maintained low inflation rates

Domestically – the Asian countries maintained low inflation rates

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Domestically – the Asian countries maintained low inflation rates, which translated into high interest rates, encouraging long-term investments and individual savings. The Asian countries had one of the highest individual savings rates in the world, which provided capital to banks that could be lent and invested. Money stayed at home and was reinvested in the economy. In terms of microeconomic policy, the state invested in human capital – spent on social services such as education and health care, assisted small businesses, provided housing for workers, engaged in land reform which redistributed rural land. The investment in housing allowed for a successful migration of workers from agriculture to industry as the economies shifted along these lines. Internationally, the Asian countries engaged in export-led growth. The Asian countries developed with foreign markets in mind – they developed export zones in low tech, labor intensive manufacturing with the primary market being foreign, not
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This note was uploaded on 11/25/2011 for the course POLISCI 1003 taught by Professor Olson during the Fall '11 term at GWU.

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