When Fast-Growing Economies Slow Down: International Evidence and Implications for China
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- 1 January 2012
- journal article
- Published by MIT Press in Asian Economic Papers
- Vol. 11 (1), 42-87
- https://doi.org/10.1162/asep_a_00118
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 US$ 17,000 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.Keywords
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