When Fast Growing Economies Slow Down: International Evidence and Implications for China
Using international data starting in 1957, we construct a sample of cases where fast-growing economies slow down. The evidence suggests that rapidly growing economies slow down significantly, in the sense that the growth rate downshifts by at least 2 percentage points, when their per capita incomes reach around $17,000 US in year-2005 constant international prices, a level that China should achieve by or soon after 2015. Among our more provocative findings is that growth slowdowns are more likely in countries that maintain undervalued real exchange rates.
This paper, prepared for the spring meeting of the Asian Economic Panel (24-5 March), draws on joint work with Dwight Perkins, whose input we acknowledge with thanks. We thank Hiro Ito for help with data and the ADB for financial support. We also thank Myoung-Jae Lee for helpful discussion and Gayoung Ko and Ji-Soo Kim for their excellent research assistance. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Barry Eichengreen & Donghyun Park & Kwanho Shin, 2012. "When Fast-Growing Economies Slow Down: International Evidence and Implications for China," Asian Economic Papers, MIT Press, vol. 11(1), pages 42-87, February. citation courtesy of