Big Data

When Fast Growing Economies Slow Down: International Evidence And Implications For China

Date Added: Mar 2011
Format: PDF

Using international data starting in 1957, the authors 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 the more provocative findings is that growth slowdowns are more likely in countries that maintain undervalued real exchange rates.