We review the growth experience of middle-income countries. Economic factors associated with growth appear to differ between middle income and other countries. The efficiency of the financial system is importantly related to the growth rate in low- and middle-income countries, but appears to...

This paper investigates the role of “absorptive capacity” to manage unexpected shocks to their real economy, with a focus on small, open, natural resource-dependent economies. A quarterly panel data series for 45 countries is constructed, including 23 developing Asian countries for empirical...

Developing Asia has benefited greatly from the rise of the People’s Republic of China (PRC), primarily through the trade channel. The PRC and its neighbors have collectively formed a regional production network, and the PRC is becoming an increasingly important source of final demand. Two...

A sound and efficient financial system is an indispensable ingredient of economic growth. It consists primarily of banks and capital markets, which channel savings into investments and other productive activities that contribute to economic growth and augment the economy's productive capacity....

The central objective of our paper is to empirically examine the relationship between financial development and income inequality. Theoretically, there are grounds for both a positive and negative relationship between the two variables. Our main finding is that financial development contributes...

Recent key challenges highlight the need to revisit Asia's financial development. These include the region's growth slowdown since the global crisis, compounded by a less benign external environment; internal structural challenges, such as population aging; and the maturing of much of the region...

Why do some economies grow faster than others? Do economies in the middle-income range face especially difficult challenges producing consistent growth? Using a transition matrix analysis on decade-level growth rates, we find that the data clearly reject the idea that middle-income economies...

In recent years, inequality has risen in the region alongside rapid economic growth. The widening income gap strengthens the case for a government response, and fiscal policy is one of the most suitable policy instruments to promote a more equitable society that provides opportunities for all....