The Growth Comeback in Developing Economies: A New Hope or Back to the Future?

50 Pages Posted: 18 Jun 2013

See all articles by John C. Bluedorn

John C. Bluedorn

International Monetary Fund (IMF) - Research Department

Rupa Duttagupta

International Monetary Fund (IMF)

Jaime Guajardo

International Monetary Fund (IMF)

Nkunde Mwase

International Monetary Fund (IMF)

Date Written: May 2013

Abstract

Growth takeoffs in developing economies have rebounded in the past two decades. Although recent takeoffs have lasted longer than takeoffs before the 1990s, a key question is whether they could unravel like some did in the past. This paper finds that recent takeoffs are associated with stronger economic conditions, such as lower post-takeoff debt and inflation levels; more competitive real exchange rates; and better structural reforms and institutions. The chances of starting a takeoff in the 2000s was triple that before the 1990s, with domestic conditions accounting for most of the increase. The findings suggest that if today’s dynamic developing economies sustain their improved policies; they are more likely to stay on course compared to many of their predecessors.

Keywords: Economic growth, Low-income developing countries, Brazil, Korea, Republic of, Indonesia, Mozambique, Cambodia, Development, Cross country analysis, Economic models, growth, takeoff, development, low-income countries, convergence, export growth, balance of payments, trade openness, regulatory barriers, economic cooperation, current account deficit, commodity prices, preferential access, current account balance, domestic demand, prudential supervision, export diversification, import substitution, external shocks, trade integration, domestic market, oil shock, domestic shocks, global trade, trade classification, international trade, export price, trade flow, trade growth, preferential access to

JEL Classification: E32, E60, F40, O11, O42

Suggested Citation

Bluedorn, John C. and Duttagupta, Rupa and Guajardo, Jaime and Mwase, Nkunde, The Growth Comeback in Developing Economies: A New Hope or Back to the Future? (May 2013). IMF Working Paper No. 13/132. Available at SSRN: https://ssrn.com/abstract=2280638

John C. Bluedorn (Contact Author)

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Rupa Duttagupta

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8583 (Phone)
202-589-8583 (Fax)

Jaime Guajardo

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Nkunde Mwase

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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