Changes

''See also:'' [[Middle-income trap]] and [[Innovation]] and [[Productivity]]

''See also:'' [[Middle-income trap]] and [[Innovation]] and [[Productivity]]

The middle-income trap refers to an economic situation where a middle-income country is failing to transform itself to a high-income economy due to its rising costs and declining competitiveness (Historically few countries successfully manage the transition from low to middle to high income).<ref>[https://elibrary.worldbank.org/doi/10.1596/9780821387856_CH04#:~:text=The%20middle%2Dincome%20trap%20refers,to%20middle%20to%20high%20income. Middle-Income Trap]</ref><ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-1 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1)], Asia Development Bank, 2012</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-2 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2)], Asia Development Bank, 2012</ref>

The [[middle-income trap]] refers to an economic situation where a middle-income country is failing to transform itself to a high-income economy due to its rising costs and declining competitiveness (Historically few countries successfully manage the transition from low to middle to high income).<ref>[https://elibrary.worldbank.org/doi/10.1596/9780821387856_CH04#:~:text=The%20middle%2Dincome%20trap%20refers,to%20middle%20to%20high%20income. Middle-Income Trap]</ref><ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-1 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1)], Asia Development Bank, 2012</ref><ref>[https://www.adb.org/publications/tracking-middle-income-trap-what-it-who-it-and-why-part-2 Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2)], Asia Development Bank, 2012</ref>

The Asia Society describes the middle-income trap thusly: "The “middle-income trap” is a theory of economic development in which wages in a country rise to the point that growth potential in export-driven low-skill manufacturing is exhausted before it attains the [[Innovation|innovative]] capability needed to boost [[productivity]] and compete with developed countries in higher value-chain industries. Thus, there are few avenues for further growth — and wages stagnate."<ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref>

The Asia Society describes the middle-income trap thusly: "The “middle-income trap” is a theory of economic development in which wages in a country rise to the point that growth potential in export-driven low-skill manufacturing is exhausted before it attains the [[Innovation|innovative]] capability needed to boost [[productivity]] and compete with developed countries in higher value-chain industries. Thus, there are few avenues for further growth — and wages stagnate."<ref>[https://asiasociety.org/new-york/china-may-be-running-out-time-escape-middle-income-trap China May Be Running Out of Time To Escape the Middle-Income Trap], Asia Society, 2017</ref>