With global growth slowing again, the International Monetary Fund has revisited an old question – are Asia’s middle-income economies stuck in a middle-income trap?

The arguments predate the global financial crisis, but are given fresh urgency by the crisis-induced deceleration in growth. According to the IMF, there’s bad news and good news. The bad news is that some emerging Asian economies do indeed face significant risks of a “sustained slowdown”. But the good news is that they are less vulnerable than emerging economies in other parts of the world – and that given the right policy choices, they can try to avoid stagnation. Continue reading »