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When Fast Growing Economies Slow Down: International Evidence and Implications for China

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  • Barry Eichengreen
  • Donghyun Park
  • Kwanho Shin

Abstract

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.

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  • Barry Eichengreen & Donghyun Park & Kwanho Shin, 2011. "When Fast Growing Economies Slow Down: International Evidence and Implications for China," NBER Working Papers 16919, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:16919
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    JEL classification:

    • F00 - International Economics - - General - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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