Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?

Bulman, David; Eden, Maya; Nguyen, Ha

Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?

2014

Bulman, David | Eden, Maya | Nguyen, Ha

Is there a "middle income trap"? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth strategies that are effective at high income levels, they may stagnate at some middle income level; this phenomenon can be thought of as a "middle income trap." This paper does not find evidence for (unusual) stagnation at any particular middle income level. However, it does find evidence that the determinants of growth at low and high income levels differ. These findings suggest a mixed conclusion: middle-income countries may need to change growth strategies to transition smoothly to high-income growth strategies, but this can be done smoothly and does not imply the existence of a middle income trap.

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AGROVOC Keywords

agriculture debt democracy developing countries economic growth economic structure exports external debt growth rate household surveys human capital income income distribution industrialization inflation macroeconomics patents primary education regression analysis

Bibliographic information

Publisher

World Bank Group, Washington, DC

Other Subjects

Demographic; Per capita income; Lagged growth; Average change; Economic review; Income levels; Policy research; Policy discussions; Middle income; Serial correlation; Rate of investment; Negative coefficient; World economy; Regression results; Per capita income levels; Undervaluation; Growth performance; Economic reforms; Per capita incomes; Factor shares; Growth acceleration; Relative income; Real exchange rates; Growth effect; Growth policies; Capital accumulation; Country growth performance; Financial development; Dependent variable; Income level; Inventory; Rapid growth; Future growth; Growth determinants; Development policy; Macroeconomic conditions; Positive correlation; Capital-labor ratio; Dividend; Income group; High income countries; Capital stocks; Growth rates; Income differences; Regime changes; Real exchange rate; Average growth; Pro-growth policies; High inflation; Inequality; Country level; High income; Macroeconomic management; Political regime; Production function; Annual change; Wage; External shocks; Middle-income countries; Middle income country; Annual growth; Total factor productivity; Gini coefficient; Annual inflation; High income country; Data set; Average annual; Output; Country characteristics; Institutional constraints; Political economy; Cross-country income; High growth; Economic activity; Poor countries; International comparisons; Gdp; Base year; Middle income countries; Civil war; Low income; Income dynamics; Capital stock; Income growth; Median average; Conditional convergence; Fertility rate; Gini coefficients; Gdp per capita; Governance indicators; World development indicators; Income groups; Income countries; Monetary economics; Positive effect; Growth literature; Inequality data; Growth regressions; Oil exporters

Language

English

Type

Working Paper; Text

In AGRIS since: 2016-03-15

Format: AGRIS AP

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Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?

2014

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