Difference between revisions of "Middle-income trap"

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*[https://www.nippon.com/en/in-depth/d00922/ With “Xinomics” Caught in a Trap, China Will Not Join the Ranks of Advanced Economies], September 2023, Nippon.com
 
*[https://www.nippon.com/en/in-depth/d00922/ With “Xinomics” Caught in a Trap, China Will Not Join the Ranks of Advanced Economies], September 2023, Nippon.com
  
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== Philippines and the middle-income trap ==
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== Philippines has high GNP growth and is projected to be an upper middle-income country. Philippines and the middle-income trap ==
 
[[File:Flag of the Philippines.png|thumb|right|250px|Flag of the [[Philippines]] ]]
 
[[File:Flag of the Philippines.png|thumb|right|250px|Flag of the [[Philippines]] ]]
 
''See also:'' [[Middle-income countries]]
 
''See also:'' [[Middle-income countries]]

Revision as of 16:33, April 13, 2024

Many Latin American middle-income countries haven't become high-income countries and have half the labor productivity of countries that are technological leaders.[1][2]

The middle-income trap refers to an economic theory 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).[3][4][5][6]

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 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."[7]

Slowing growth in emerging markets during the post 2007/2008 financial crisis period provided a new impetus to the “middle-income trap” debate.[8]

A 2017 Brookings Institute article notes: "A number of structural factors, such as the shift from input-led growth to productivity- and innovation-led growth, make the middle-to-high transition more challenging. The idea of a middle-income trap resonates especially in Latin America, where many countries have been trapped at middle income for a long time."[9]

Asian Development Bank: The middle-income countries transition to high-income counties around the globe: Characteristics of graduation and slowdown

The Asian Development Bank is a regional development bank established in 1966 with 31 offices in the world designed to promote social and economic development in Asia. The Bank is headquartered in Manilla, Philippines.

The abstract for the Asian Development Bank 2015 paper entitled The Middle-Income Transition around the Globe: Characteristics of Graduation and Slowdown indicates:

“ The paper investigates the situation of middle-income economies around the world. Since 1965, only 18 economies with a population of more than 3 million and not dependent on oil exports have made the transition to being high income. Many more have not been able to move beyond the middle-income stage. We conduct statistical tests of differences between two groups of economies across a range of growth and development variables. The results suggest that middle-income economies are particularly weak in the following areas: governance, infrastructure, savings and investment, inequality, and quality—but not quantity—of education. The findings are used to suggest whether the People’s Republic of China is successfully progressing through the middle-income stage or whether it may get caught in a middle-income trap.[10] ”

Criticisms of the middle-income trap theory

Material related to whether or not China escapes the middle-income trap

Flag of China

See also: China

China may escape the middle-income trap

Arguments that China will not escape the middle-income trap

Philippines has high GNP growth and is projected to be an upper middle-income country. Philippines and the middle-income trap

Flag of the Philippines

See also: Middle-income countries

At the present time, the Philippines has high GNP growth and it is projected to become an upper middle-income country by 2026.[11]

Articles on the Philippines and the middle-income trap:

Journal articles and other scholarship

External links

Videos:

References

  1. ↑ Is economic growth in middle-income countries different from low-income countries? by Barry Eichengreen, Donghyun Park, and Kwanho Shin, Brookings Institute, September 25, 2017
  2. ↑ Is Southeast Asia falling into a Latin American style “middle-income trap”?, Cambridge Working Papers in Economics, CWPE 2267. Published 9 November 2022. Website www.econ.cam.ac.uk/cwpe
  3. ↑ Middle-Income Trap
  4. ↑ China May Be Running Out of Time To Escape the Middle-Income Trap, Asia Society, 2017
  5. ↑ Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 1), Asia Development Bank, 2012
  6. ↑ Tracking the Middle-Income Trap: What is It, Who is in It, and Why? (Part 2), Asia Development Bank, 2012
  7. ↑ China May Be Running Out of Time To Escape the Middle-Income Trap, Asia Society, 2017
  8. ↑ Is economic growth in middle-income countries different from low-income countries? by Barry Eichengreen, Donghyun Park, and Kwanho Shin, Brookings Institute, September 25, 2017
  9. ↑ Is economic growth in middle-income countries different from low-income countries? by Barry Eichengreen, Donghyun Park, and Kwanho Shin, Brookings Institute, September 25, 2017
  10. ↑ The Middle-Income Transition around the Globe: Characteristics of Graduation and Slowdown by Paul Vandenberg, Lilibeth Poot, and Jeffrey Miyamoto. Asian Development Bank. ADBI Working Paper Series. No. 519. March 2015
  11. ↑ Philippines likely to be upper middle-income country by 2026, Money Control website, November 2023
  12. ↑ Re-examining the Middle-Income Trap Hypothesis (MITH): What to Reject and What to Revive?, Xuehui Han and Shang-Jin Wei, WORKING PAPER 23126 DOI 10.3386/w23126, ISSUE DATE February 2017
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