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.

This paper, prepared for the March 2011 meeting of the Asian Economic Panel at the Earth Institute in New York, draws on joint work with Dwight Perkins, whose input we acknowledge with thanks. We thank Hiro Ito for help with data, and the ADB for financial support. We also thank Jeffrey Sachs, Wing Thye Woo, Louis Kuijs, Myoung-Jae Lee, and Arvind Subramanian for helpful comments and Gayoung Ko and Ji-Soo Kim for their excellent research assistance.

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