scholarly journals What Is the “Middle Income Trap”?

2020 ◽  
pp. 1-32
Author(s):  
Shaojie Zhou ◽  
Angang Hu
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
Low Income ◽  
East Asian ◽  
Development Stage ◽  
Poverty Trap ◽  
Development Phase ◽  
Middle Income ◽  
Income Development ◽  
Middle Income Trap

Abstract In 2007, Indermit Gill and Homi Kharas (2007), two World Bank economists, published a report titled An East Asian Renaissance: Ideas for Economic Growth, which suggested that East Asia would soon develop into a middle-income region and proposed the concept of the “middle income trap”. It should be noted that the report did not provide an in-depth interpretation of the concept, nor did it offer a clear income range for the “middle income trap”. In 2011, Homi Kharas and Harinder Kohli (2011) further elaborated on the concept, specifying that when a country escapes the poverty trap in the low-income development stage and enters into the middle-income development phase, the country may face growth stagnation and inability to further move up the ladder into the high-income range.

scholarly journals How Did China Overcome the “Poverty Trap”?

2020 ◽  
pp. 33-69
Author(s):  
Shaojie Zhou ◽  
Angang Hu
Keyword(s):  
Economic Growth ◽  
Human Development ◽  
Low Income ◽  
National Development ◽  
Poverty Trap ◽  
Vicious Cycle ◽  
Middle Income ◽  
Social Unrest ◽  
Development Cycle ◽  
Middle Income Trap

Abstract Throughout the development cycle of a country, major tasks and challenges may arise during various stages of development and the possibility of a period of stagnation exists in each stage. In the low-income stage, anemic economic growth, lagging human development, political instability and social unrest often lead to a vicious cycle in national development. For instance, many countries in Africa have so far failed to fight poverty effectively and remain mired in the “poverty trap”. In the middle-income stage, many countries fall into the “middle income trap”. Even if countries succeed in overcoming the “middle income trap”, their economic growth may still be plagued by the “high income trap”, with Japan being one such example.

POPULATION AGING, MIDDLE-INCOME TRAP, AND ECONOMIC GROWTH: AN EMPIRICAL STUDY OF ASIAN ECONOMIES

2019 ◽  
pp. 1842009
Author(s):  
JIUN-NAN PAN ◽  
MING-LEI CHANG
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Low Income ◽  
Population Aging ◽  
Negative Influence ◽  
Positive Influence ◽  
Middle Income ◽  
Primary Finding ◽  
Middle Income Trap ◽  
Economic Growth Rates

Population aging and the middle-income trap are serious problems felt worldwide, especially in terms of their powerful influence on economic growth. In order to explore the relationships among population aging, middle-income trap, and economic growth, this study uses a panel data of 27 economies in Asia from 1995 to 2016. The primary finding of this study is that lower-middle-income economies are facing the problem of middle-income trap, indicating that the economic growth rates of lower-middle-income economies are slowing down. In addition, population aging has a statistically significant and negative influence on the growth rate of GDP in the high-income economies, but it has a statistically significant and positive influence on the growth rate of GDP in the low-income and lower-middle-income economies. This study suggests that increasing women’s labor participation, technology innovation, and immigration could solve the problems of population aging and the middle-income trap.

INTERNATIONAL MIGRATION, HUMAN CAPITAL COMPOSITION AND MIDDLE-INCOME TRAPS

2019 ◽  
Vol 64 (04) ◽  
pp. 883-897
Author(s):  
ZHAOBIN FAN ◽  
HUI LI
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
Low Income ◽  
Significant Loss ◽  
Unskilled Labor ◽  
Skilled Workers ◽  
Coordination Failures ◽  
Middle Income ◽  
Working Paper ◽  
Middle Income Trap

One of the most interesting and debateable topics in China’s economic growth is whether China’s economy would be hindered by a middle-income trap. This paper addresses this topic by analyzing the link between international skilled migration and the middle-income trap. Our study has extended the model proposed by [De la Croix, D. and Docquier F. (2012). Do Brain Drain and Poverty Result from Coordination Failures? Journal of Economic Growth, 17(1) 1–26.] and accounted for the importance of heterogeneity of human capital emphasized by [Jones, F. (2008). The Knowledge Trap: Human Capital and Development Reconsidered. NBER Working Paper No. 14138, Northwestern University.] Results have demonstrated that in the presence of externalities in the formation of human capital, there possibly exist four steady-state development paths in the dynamic system due to coordination failures. These four paths include: (i) the unskilled labor equilibrium which is characterized by low-income and significant loss of skilled labor, (ii) the generalist equilibrium with lower-middle income and significant loss of specialists, (iii) the specialist equilibrium with the characteristics of upper-middle income and significant loss of generalists; and (iv) the skilled equilibrium with high income and insignificant loss of skilled workers. Amongst them, the generalist equilibrium and specialist equilibrium represent two types of middle-income trap.

The Developmental Trading State

2017 ◽  
Author(s):  
Alex J. Bellamy
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
National Economy ◽  
East Asian ◽  
The State ◽  
State Model ◽  
Principal Function ◽  
Mass Violence ◽  
The Way

This chapter demonstrates that the downwards pressure that state consolidation placed on mass violence was amplified by the type of state that emerged. Across East Asia, governments came to define themselves as “developmental” or “trading” states whose principal purpose was to grow the national economy and thereby improve the economic wellbeing of their citizens. Governments with different ideologies came to embrace economic growth and growing the prosperity of their populations as the principal function of the state and its core source of legitimacy. Despite some significant glitches along the way the adoption of the developmental trading state model has proven successful. Not only have East Asian governments succeeded in lifting hundreds of millions of people out of poverty, the practices and policy orientations dictated by this model helped shift governments and societies away from belligerent practices towards postures that prioritized peace and stability. This reinforced the trend towards greater peacefulness.

Developing an economy based on knowledge and innovation in the context of the middle income trap

2015 ◽  
Vol 60 (10) ◽  
pp. 56-74
Author(s):  
Paweł Wieczorek
Keyword(s):  
Economic Growth ◽  
New Technologies ◽  
Current Model ◽  
Growth Theory ◽  
Labor Costs ◽  
Average Income ◽  
Middle Income ◽  
Endogenous Growth Theory ◽  
Middle Income Trap

The article is a contribution to the discussion on the necessity to change the current model of economic growth of Poland for model of economy based on knowledge and innovation. In this way, our country will be able to overcome the threats that might push the economy into the trap of the average income, expressed in long-term slowdown in GDP growth. The endogenous growth theory, formed after 1989 and characterized by duplication of Western technology, enabled relatively rapid growth by over 20 years. Currently, Poland to ensure an economic growth is facing the need for innovative technologies and innovation. Risks associated with middle income trap are very real because of the disappearance of comparative advantage, which results from relatively low labor costs. The creation in Poland conditions to accelerate economic growth requires action to increase the propensity of entrepreneurs to reach for new technologies and innovation and attractive market offer from the national centers for research and development.

scholarly journals Foreign aid on economic growth in Africa: A comparison of low and middle-income countries

2015 ◽  
Vol 18 (4) ◽  
pp. 449-462 ◽  
Author(s):  
Aye Mengistu Alemu ◽  
Jin-Sang Lee
Keyword(s):  
Economic Growth ◽  
Foreign Aid ◽  
Low Income ◽  
Empirical Studies ◽  
Critical Role ◽  
Generalized Method Of Moments ◽  
African Countries ◽  
Middle Income ◽  
Middle Income Countries ◽  
Theoretical Hypothesis

Previous empirical studies on the effects of foreign aid on economic growth have generated mixed results that make it difficult to draw policy recommendations. The main reason for such mixed results is the choice of a single aggregate list of countries, regardless of the disparities in levels of development. This study therefore fills the development gap by disaggregating the African data into a panel of 20 middle- income and 19 low- income African countries over a period of 15 years between 1995 and 2010, and employing a dynamic generalized method of moments (GMM) model to address the dynamic nature of economic growth as well as the problems of endogeneity. The results of this study support the theoretical hypothesis that a positive relationship between aid and GDP growth exists, but only for low-income African countries, not middle-income ones. On the other hand, the study reveals that middle- income African countries tend to experience a greater impact on their economic growth from foreign direct investment (FDI) and natural resources revenues, mainly oil exports. This implies that the frequent criticism that foreign aid has not contributed to economic growth is flawed, at least in the case of low-income African countries. In fact, foreign aid has played a critical role in stimulating economic growth in such countries through supplementing domestic sources of finance such as savings, thus increasing the amount of investment and capital stock in them.

scholarly journals East Asian ‘Econophoria’ in Theory and Practice

2016 ◽  
Vol 17 (1) ◽  
pp. 101-120
Author(s):  
Brendan Howe
Keyword(s):  
Economic Growth ◽  
East Asia ◽  
Wealth Distribution ◽  
East Asian ◽  
Theory And Practice ◽  
Operating Environment ◽  
Economic Growth And Development ◽  
Success Stories ◽  
Governance Challenges ◽  
Low Tension

‘Econophoria’ is the hope that the solution of all governance challenges, whether international or domestic, can be sought through economic growth and development. It is prevalent in the East Asian region, where tremendous economic development success stories have gone hand-in-hand with lengthy periods without interstate war. This paper explores the theoretical underpinnings and antecedents for econophoria, and how it has manifest in practice in East Asia. It also raises, however, a number of questions which challenge the underlying assumptions of peace though trade and economic growth paradigms in East Asia. How does the skewed wealth distribution that is associated with macro-economic growth affect the internal stability and peace of the societies in East Asia? Does this have an impact on the propensity of the governments to contain the conflicts they have with their neighbours at a level of low tension? Is the pursuit of economic growth prior to, or at the expense of, human rights and the wellbeing of the most vulnerable sustainable in the contemporary international operating environment?

Growth Strategies to Avoid the Middle-Income Trap

2020 ◽  
pp. 24-47
Author(s):  
Homi Kharas ◽  
Indermit Gill
Keyword(s):  
Low Income ◽  
Technical Change ◽  
Policy Implications ◽  
Low Income Countries ◽  
Growth Strategies ◽  
Functional Theory ◽  
Middle Income ◽  
Advanced Economies ◽  
The Subject ◽  
Middle Income Trap

Since the authors of this chapter coined the term in 2006, “the middle-income trap” has been the subject of scores of investigations. The evidence in support of its existence has been mixed, but their original proposition was that of the possibility of a trap, not its inevitability. In this chapter, they emphasize the absence of a functional theory of economic growth in middle-income economies. Solow–Swan models did well to explain growth in low-income countries, and Lucas–Romer models emphasizing endogenous technical change identified the main drivers of growth in advanced economies. Neither class of models has, however, satisfactorily explained successful transitions from one type of growth to the other. The authors suggest that Schumpeterian models proposed by Aghion, Howitt, and others that stress creative destruction and institutional change provide the analytical foundations for a better understanding of growth in middle-income economies. They present evidence that is consistent with the predictions of this approach, and discuss its policy implications.

scholarly journals Immunisation financing and programme performance in the Middle East and North Africa, 2010 to 2017

2019 ◽  
Vol 4 (2) ◽  
pp. e001248
Author(s):  
Helen Saxenian ◽  
Nahad Sadr-Azodi ◽  
Miloud Kaddar ◽  
Kamel Senouci
Keyword(s):  
Economic Growth ◽  
Middle East ◽  
North Africa ◽  
Low Income ◽  
Health Sector ◽  
Cost Effective ◽  
Middle Income ◽  
Middle Income Countries ◽  
Life Saving ◽  
Fiscal Space

Immunisation is a cornerstone to primary health care and is an exceptionally good value. The 14 low-income and middle-income countries in the Middle East and North Africa region make up 88% of the region’s population and 92% of its births. Many of these countries have maintained high immunisation coverage even during periods of low or negative economic growth. However, coverage has sharply deteriorated in countries directly impacted by conflict and political unrest. Approximately 1.3 million children were not completely vaccinated in 2017, as measured by third dose of diphtheria–pertussis–tetanus vaccine. Most of the countries have been slow to adopt the newer, more expensive life-saving vaccines mainly because of financial constraints and the socioeconomic context. Apart from the three countries that have had long-standing assistance from Gavi, the Vaccine Alliance, most countries have not benefited appreciably from donor and partner activities in supporting their health sector and in achieving their national and subnational immunisation targets. Looking forward, development partners will have an important role in helping reconstruct health systems in conflict-affected countries. They can also help with generating evidence and strategic advocacy for high-priority and cost-effective services, including immunisation. Governments and ministries of health would ensure important benefits to their populations by investing further in their immunisation programmes. Where possible, the health system can create and expand fiscal space from efficiency gains in harmonising vaccine procurement mechanisms and service integration; broader revenue generation from economic growth; and reallocation of government budgets to health, and from within health, to immunization.

Sign in / Sign up

Export Citation Format

Share Document