New growth theory has emphasized the role of human Capital and economies of scale in promoting sustained growth. This paper discusses the sources of rapid growth in Asian newly industrializing countries (NICs) in recent times by applying some econometric tests of new growth theory. The Korean economy is considered as an example of the successful NICs in Asia, where three types of empirical tests are applied based on the modern theory of cointegration, the dominal role of demand and the existence of significant scale economies due to human capital. The empirical growth profile of Korea in recent times seems to vindicate the broad tenets of the new growth theory.
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Sengupta et al. (1994) studied this question.
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