Barry Eichengreen: After several decades of rapid growth, much of emerging Asia appears to have succumbed to the malaise of slow economic growth. The aspiration of countries such as Thailand and Indonesia to achieve per capita incomes of US$ 20,000 (2010 dollars) by 2020 looks to be disappointed. This raises the question: Were those aspirations unrealistic? Or have their economies underperformed? Or both?
The papers in this symposium frame the issue using the concept of the “middle-income trap,” which I personally regard as somewhat problematic. The idea of a trap is overly deterministic. The idea that countries are apt to be trapped by slow growth once they reach middle-income status is uncomfortably reminiscent of Rostow's (1960) “stages of growth” theory, encouraging the belief that all successful countries follow a similar growth path. The idea of a middle-income trap fails to distinguish how different initial conditions and policy responses...