Physical capital accumulation in Asia 12: Past trends and future projections

► In this paper, we investigate sources of the fast capital accumulation in Asia and make projections for the future. ► Our approach is an estimation of a “convergence” equation for physical capital per capita. ► Our estimation is based on an open economy growth model. ► We find that the initially capital-poor Asian economies have benefited from the convergence effects. ► But other factors such as a low rule of law score and high investment goods prices have worked against them.