Assessing potential growth in emerging countries after the global financial crisis

Enrica Di Stefano () and Daniela Marconi
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Enrica Di Stefano: Bank of Italy

No 256, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: We examine the growth performance of six emerging economies (Brazil, China, India, Indonesia, Russia and Turkey) in the last two decades and examine whether domestic structural constraints are affecting their present and future growth potential. In order to assess better the determinants of the recent synchronized slowdown of these economies, we concentrate on the dynamics of labor productivity (value added per worker, a synthetic measure of capital deepening, labor quality and total factor productivity) and of employment. We find that the ongoing slowdown in EMEs is largely structural, but there is still ample room for catching up in terms of output composition, reallocation of labor across sectors and within-sector productivity improvements. The scope for further reform and reform priorities differs across countries. In the longer run other structural factors will weigh on potential growth, particularly the evolution of the size and quality of the labor force.

Keywords: emerging markets; growth; potential growth; productivity (search for similar items in EconPapers)
JEL-codes: E32 O47 O57 (search for similar items in EconPapers)
Date: 2015-01
New Economics Papers: this item is included in nep-ara, nep-cis, nep-mac and nep-sea
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Citations: View citations in EconPapers (2)

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