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

NBER Working Paper No. 16919

Issued in March 2011

NBER Program(s):International Finance and Macroeconomics



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.

Acknowledgments

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Document Object Identifier (DOI): 10.3386/w16919

Published: 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

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