Trends and dynamics of economic growth: empirical analysis of India and Singapore

This paper investigates the multifaceted dynamics of economic growth in India and Singapore over a span of 50 years, utilizing the Solow and Romer models to decompose growth into its core components: total factor productivity (TFP), capital, and labor. Through a detailed growth accounting methodology, we analyze how these elements contribute distinctly to the GDP trajectories of these two contrasting economies. Our analysis reveals that while both labor expansion and capital accumulation play pivotal roles in short-term growth, it is the enhancement of TFP that emerges as the crucial determinant of sustainable economic progress over the long term. In Singapore, a developed economy characterized by its status as one of the Asian Tigers, TFP and labor productivity have been the primary drivers of its more consistent and long-term growth. Conversely, Indias growth has been more influenced by capital accumulation, particularly following economic liberalizations that spurred foreign investment and industrial diversification. The findings underscore the importance of TFP growth in both developing and mature economies, highlighting its significance in policy formulation aimed at stimulating economic development. This study not only charts a historical analysis of growth patterns but also aligns them with theoretical underpinnings that suggest pathways for future economic strategies in similar emerging and developed markets.