According to Krugman’s article on Myth of Asian Miracle, what is the most important factor leads to the miracle in Asia’s exceptionally high economic growth rates?

In his article "The Myth of Asia's Miracle", Paul Krugman argues that the primary factor contributing to Asia's high economic growth rates is not so much innovation or increased efficiency, but rather extensive growth, particularly in the form of capital and labor input.

Here are the steps to understand this:

1. Krugman first distinguishes between two types of economic growth: extensive and intensive. Extensive growth is achieved by adding more inputs to the production process, such as labor and capital. Intensive growth, on the other hand, is achieved by increasing the efficiency with which these inputs are used.

2. He then points out that much of Asia's economic growth has been extensive rather than intensive. This means that it has been driven by the mobilization of resources - getting more people to work, and equipping them with better machinery and equipment - rather than by increases in efficiency or innovation.

3. Krugman supports this argument with data showing that the growth rates of total factor productivity (a measure of efficiency) in Asian countries have not been exceptionally high. Instead, these countries have achieved high growth rates by investing heavily in physical capital and increasing their labor force.

4. Therefore, according to Krugman, the "miracle" of Asia's high economic growth rates is not due to some unique Asian approach to economic management or to the superior efficiency of Asian businesses. Rather, it is largely a result of extensive growth strategies.

5. However, Krugman also warns that this type of growth is inherently limited. Once a country has fully mobilized its resources, further growth can only come from increases in efficiency - that is, from intensive growth. This is why he refers to the idea of an Asian economic "miracle" as a myth.