Emerging markets: five decades of growth

 •  Filed under China, Own charts

China has done extremely well over the last 30 years. But was the Chinese case exceptional? Given the number of people that China's rise has impacted, it is rightly treated a huge story. The question for this post how comparable economies did in the last 4-5 decades (depending on data availability).

Using the data from the Mauro and Ho (2014) paper, it is easy to look at the long-run performance of all large economies. In this chart, I show the (annualized) growth rates of China, India, Indonesia, and Nigeria, by decade:

Data: Ho and Mauro; Chart: Jan Zilinsky

I take away a few points from the chart:

  • The magnitude and the persistence of China's growth were not just unusual - they were a league apart.
  • In each decade, China grew faster in the "current" decade than in any of the preceding decades. (Decadal averages were monotonically increasing for China).
  • The 1960s and 1970s were an extremely difficult period for China: but its economy grew faster than India's or Nigeria's even then.
  • But China did a lot worse in the 1970s than Indonesia.
  • In the second half of the twentieth century, India lost several decades to slow growth.
  • Indonesia had the least volatile growth rates in the sample (SD=1.87).
  • If we restrict the time period to the post-1980 period, growth volatility was very low China (SD=0.8), moderate in India (SD=1.5), and very high in Nigeria (SD=4.9).
  • Emerging markets typically grow faster than developed economies, but that stereotype was misleading/wrong in the case of Nigeria much of the time since the 1950s.