Potential output growth generally decelerated after the global financial crisis during 2008–2009. This paper examines the possible determinants of potential output growth using Bayesian Model Averaging and assesses how the determinants can be used to increase the growth of potential output. It finds that the long-term growth of working-age population, the tertiary level gross enrollment ratio, the ...

This paper argues that the single most important factor that explains East Asia’s development success was its fast structural transformation toward industrialization, manufacturing in particular. Workers moved out of agriculture into manufacturing, and the sector diversified and upgraded its structure. Manufacturing activities are subject to increasing returns to scale, and many manufacturing goods ...

During the last few years, the newly coined term middle-income trap has been widely used by policy makers to refer to the middle-income economies that seem to be stuck in the middle-income range. However, there is no accepted definition of the term in the literature. In this paper, we study historical transitions across income groups to see whether there is any evidence that supports the claim that ...

In recent years, some developing Asian countries claim to have started shifting emphasis from export-led to domestic-demand-led growth policies with a view to achieving a more balanced growth strategy. This paper evaluates empirically how far this shift has gone. The evaluation—based on an analysis of five countries—finds no evidence that the period 1993–2003 has been marked by such a shift at the ...

"This paper proposes and analyzes one possible reason why some countries get stuck in the middle-income trap: the role played by the changing structure of the economy (from low-productivity activities into high-productivity activities), the types of products exported (not all products have the same consequences for growth and development) and the diversification of the economy. We compare the exports ...

"This paper provides a working definition of what the middle-income trap is. It classifies 124 countries that have consistent data for 1950–2010. First, the paper defines four income groups of gross domestic product per capita in 1990 purchasing power parity dollars: low-income below $2,000; lower middle-income between $2,000 and $7,250; upper middle-income between $7,250 and $11,750; and high-income ...

The growth diagnostics methodology pioneered by Hausmann et al. (2005) is becoming a key piece of the toolkit for donor agencies in formulate their operational strategies. This paper aims at clarifying the primary objectives of the approach, highlighting some limitations for operational use. The key to benefiting from the full potential of this approach lies in a proper understanding of what it does; ...

We use changes in indices of revealed comparative advantage to study whether export diversification is path-dependent (i.e., history matters), and whether it is more difficult to diversify into more sophisticated products; and whether education helps reduce path-dependence, or to develop comparative advantage in sophisticated products. We find that the development of comparative advantage is a ...

We revisit the lively debate about the sources of growth in East Asia of the 1990s, generated by the wellknown papers by Alwyn Young and Paul Krugman. We show that the methodologies used to apportion growth were problematic, with the consequence that the debate was much ado about nothing.

This paper argues that the single most important factor that explains East Asia’s development success was its fast structural transformation toward industrialization, manufacturing in particular. Workers moved out of agriculture into manufacturing, and the sector diversified and upgraded its structure. Manufacturing activities are subject to increasing returns to scale, and many manufacturing goods ...