The Central Argument Of The Asiaphoria By Lant Pritchett And Larry Summers

1048 Words Mar 2nd, 2016 null Page
Q.1 What is the central argument of the Asiaphoria by Lant Pritchett and Larry Summers? (300 words)

The central argument of the Asiaphoria by Pritchett and Summers (2013) is that the accelerate growth rate of China and India will tend to a full regression to the mean abruptly. They conclude a pessimistic outcome on the prediction of growth in China and India in the further one or two decades. They argue that it is hard to use the past growth performance to predict the future growth and it seems unlikely for China and India to continue the abnormally rapid growth rates it currently anticipated. Furthermore, according to their model forecast, they found the most possible result of the super-rapid growth rate is to ‘regression to the mean’. It is an empirically robust feature of economic growth, while the likelihood of slow-down growth rate is also a contingency. Moreover, due to the objective laws of ‘regression to the mean’, the long-run growth predictability of the two countries is bullish and seemed as a small probability event.

Pritchett and Summers (2013) also point out that the super-rapid growth and the deficiency of long-term stable empirical relationship in developing countries enable it hard to maintain the gradual change in growth. There may suffer large acceleration or deceleration of growth in a sudden event. Moreover, from the country specific consideration aspect, they identify that though there seems little association between the average growth rate and…

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