The Middle-Income Trap – Definitions, Theories and Countries Concerned: A Literature Survey

36 Pages Posted: 9 May 2016

See all articles by Linda Glawe

Linda Glawe

FernUniversität in Hagen

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen)

Date Written: May 9, 2016

Abstract

In recent years, a growing body of economic literature has focused on the phenomenon of the so-called middle-income trap (MIT). The term usually refers to countries that have experienced rapid growth and thus quickly reached middle-income status, but then failed to overcome that income range to further catch up to the developed countries. This paper surveys the MIT literature. It begins by laying out different approaches to defining the MIT (with a focus on the distinction between absolute and relative approaches) and by presenting as well as classifying the most important empirical studies. After a short overview of the currently identified MIT countries, the article summarizes the main explanatory approaches, taking into account both the theoretical foundations and the empirically identified triggering factors.

Keywords: middle-income trap, middle-income countries, economic growth, economic development, growth slowdowns, catching up

JEL Classification: O10, O40

Suggested Citation

Glawe, Linda and Wagner, Helmut, The Middle-Income Trap – Definitions, Theories and Countries Concerned: A Literature Survey (May 9, 2016). Available at SSRN: https://ssrn.com/abstract=2777521 or http://dx.doi.org/10.2139/ssrn.2777521

Linda Glawe (Contact Author)

FernUniversität in Hagen ( email )

Universitätsstr. 11 (TGZ)
Chair of Macroeconomics
58084 Hagen
Germany

Helmut Wagner

University of Hagen (Fernuniversitaet Hagen) ( email )

Universitätsstrasse 41
Feithstrathe 140
D-58084 Hagen
Germany
011-49-2331-987-2640 (Phone)
011-49-2331-987-391 (Fax)

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