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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    1. Lee, Jong-Wha & Hong, Kiseok, 2012. "Economic growth in Asia: Determinants and prospects," Japan and the World Economy, Elsevier, vol. 24(2), pages 101-113.
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    4. Hausmann, Ricardo & Rodriguez, Francisco & Wagner, Rodrigo, 2006. "Growth Collapses," Working Paper Series rwp06-046, Harvard University, John F. Kennedy School of Government.
    5. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    6. Ben S. Bernanke & Refet S. Gürkaynak, 2002. "Is Growth Exogenous? Taking Mankiw, Romer, and Weil Seriously," NBER Chapters,in: NBER Macroeconomics Annual 2001, Volume 16, pages 11-72 National Bureau of Economic Research, Inc.
    7. Timothy J. Kehoe & Kim J. Ruhl, 2010. "Why Have Economic Reforms in Mexico Not Generated Growth?," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 1005-1027, December.
    8. Robert W. Fogel, 2007. "Capitalism and Democracy in 2040: Forecasts and Speculations," NBER Working Papers 13184, National Bureau of Economic Research, Inc.
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    More about this item

    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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