Why Growth in Emerging Economies Is Likely to Fall

Emerging-market growth from 2000 to 2012 was extraordinarily high. Aslund cites several factors to explain why emerging-economy growth is likely to be lower in the future. Having caught up with advanced economies in many respects, these countries face limitations on their future catch-up potential. The extraordinary credit and commodity booms are over, and many large emerging economies are financially fragile. They have governance problems and need to carry out structural reforms. The advanced economies, by contrast, have undertaken fiscal consolidation and structural reforms following the recent financial crisis and should experience higher growth rates.