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Growth slowdowns redux

Author

Listed:
  • Eichengreen, Barry
  • Park, Donghyun
  • Shin, Kwanho
Abstract
We analyze the incidence and correlates of growth slowdowns in fast-growing middle-income countries, extending the analysis of an earlier paper (Eichengreen et al., 2012a). We continue to find dispersion in the per capita income at which slowdowns occur. But in contrast to our earlier analysis which pointed to the existence of a single mode at which slowdowns occur, in the neighborhood of $15,000–16,000 2005 purchasing power parity dollars, new data suggest the possibility of two modes, one at $10,000–11,000 and another at $15,000–16,000. A number of countries appear to have experienced two slowdowns, consistent with the existence of multiple modes. We suggest that growth in middle-income countries may slow down in a succession of stages rather than at a single point in time. This implies that a larger group of countries is at risk of a growth slowdown and that middle-income countries may find themselves slowing down at lower income levels than implied by our earlier estimates. We also find that slowdowns are less likely in countries where the population has a relatively high level of secondary and tertiary education and where high-technology products accounts for a relatively large share of exports, consistent with our earlier emphasis of the importance of moving up the technology ladder in order to avoid the middle-income trap.

Suggested Citation

  • Eichengreen, Barry & Park, Donghyun & Shin, Kwanho, 2014. "Growth slowdowns redux," Japan and the World Economy, Elsevier, vol. 32(C), pages 65-84.
    • Handle: RePEc:eee:japwor:v:32:y:2014:i:c:p:65-84
    DOI: 10.1016/j.japwor.2014.07.003
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    References listed on IDEAS

    as
    1. 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, Winter/Sp.
    2. Rodrik, Dani, 1999. "Where Did All the Growth Go? External Shocks, Social Conflict, and Growth Collapses," Journal of Economic Growth, Springer, vol. 4(4), pages 385-412, December.
    3. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    4. Ricardo Hausmann & Lant Pritchett & Dani Rodrik, 2005. "Growth Accelerations," Journal of Economic Growth, Springer, vol. 10(4), pages 303-329, December.
    5. Phillip Arestis & Michelle Baddeley & John S.L. McCombie (ed.), 2007. "Economic Growth," Books, Edward Elgar Publishing, number 3958.
    6. 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.
    7. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
    8. Ki Seong Park, 2007. "Industrial Relations And Economic Growth In Korea," Pacific Economic Review, Wiley Blackwell, vol. 12(5), pages 711-723, December.
    9. Kwabena Gyimah-Brempong & Marva E. Corley, 2005. "Civil Wars and Economic Growth in Sub-Saharan Africa1," Journal of African Economies, Centre for the Study of African Economies, vol. 14(2), pages 270-311, June.
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    More about this item

    Keywords

    Economic growth; Slowdown; Crisis;
    All these keywords.

    JEL classification:

    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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