ADB; Eichengreen, Barry; Park, Donghyun; Shin, Kwanho2021-10-052021-10-052017-08N/AN/A2313653723136545https://www.adb.org/publications/landscape-economic-growth-middle-income-countrieshttps://hdl.handle.net/20.500.14540/5177The efficiency of the financial system is related to the growth rate in low- and middle-income countries, but appears to matter less as one moves up the income scale. A review of the growth experience of middle-income countries suggests that economic factors associated with growth appear to differ between middle income and other countries. Demographic variables also matter importantly in low-income countries. In middle-income countries, in contrast, measures of the financial system no longer appear to matter as importantly, as if inefficiencies in banking and financial systems are no longer as binding a constraint as at earlier stages of financial development; nor are demographic variables as important as before. At this point, other variables gain a growing role: these include whether the country experiences a banking or currency crisis, the extent of nonforeign direct investment capital inflows, and government debt as a share of gross domestic product.36