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The middle-income trap turns ten


  • Gill,Indermit S.
  • Kharas,Homi


Since we introduced the term ?middle-income trap? in 2006, it has become popular among policy makers and researchers. In May 2015, a search of Google Scholar returned more than 3,000 articles including the term and about 300 articles with the term in the title. This paper provides a (non-exhaustive) survey of this literature. The paper then discusses what, in retrospect, we missed when we coined the term. Today, based on developments in East Asia, Latin America, and Central Europe during the past decade, we would have paid more attention to demographic factors, entrepreneurship, and external institutional anchors. We would also make it clearer that to us, the term was as much the absence of a satisfactory theory that could inform development policy in middle-income economies as the articulation of a development phenomenon. Three-quarters of the people in the world now live in middle-income economies, but economists have yet to provide a reliable theory of growth to help policy makers navigate the transition from middle- to high-income status. Hybrids of the Solow-Swan and Lucas-Romer models are not unhelpful, but they are poor substitutes for a well-constructed growth framework.

Suggested Citation

  • Gill,Indermit S. & Kharas,Homi, 2015. "The middle-income trap turns ten," Policy Research Working Paper Series 7403, The World Bank.
  • Handle: RePEc:wbk:wbrwps:7403

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    References listed on IDEAS

    1. repec:wsi:jicepx:v:06:y:2015:i:03:n:s1793993315500131 is not listed on IDEAS
    2. Zuzana Brixiova & Thierry Kangoye, 2014. "Youth Unemployment in Africa: New Evidence and Policies from Swaziland," AIEL Series in Labour Economics,in: Dario Sciulli & Miguel Ángel Malo (ed.), Disadvantaged Workers, edition 1, chapter 9, pages 181-202 AIEL - Associazione Italiana Economisti del Lavoro.
    3. repec:eab:develo:23424 is not listed on IDEAS
    4. Anna Jankowska & Arne Nagengast & José Ramón Perea, 2012. "The Middle-Income Trap: Comparing Asian and Latin American Experiences," OECD Development Centre Policy Insights 96, OECD Publishing.
    5. Gökhan YILMAZ, 2015. "Turkish Middle Income Trap and Less Skilled Human Capital," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 30(346), pages 9-36.
    6. Fernando Gabriel Im & David Rosenblatt, 2015. "Middle-Income Traps: A Conceptual and Empirical Survey," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-39.
    7. Peter E Robertson & Longfeng Ye, 2013. "On the Existence of a Middle Income Trap," Economics Discussion / Working Papers 13-12, The University of Western Australia, Department of Economics.
    8. Petrakis, P.E. & Stamatakis, D., 2005. "Human capital, growth and convergence traps: Implications from a cross-country analysis," Proceedings of the German Development Economics Conference, Kiel 2005 26, Verein für Socialpolitik, Research Committee Development Economics.
    9. Flaaen, Aaron & Ghani, Ejaz & Mishra, Saurabh, 2013. "How to avoid middle income traps ? evidence from Malaysia," Policy Research Working Paper Series 6427, The World Bank.
    10. Lee,Keun, 2013. "Schumpeterian Analysis of Economic Catch-up," Cambridge Books, Cambridge University Press, number 9781107042681, May.
    11. Homi Kharas & Harinder Kohli, 2011. "What Is the Middle Income Trap, Why do Countries Fall into It, and How Can It Be Avoided?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 281-289, September.
    12. Linxiu Zhang & Hongmei Yi & Renfu Luo & Changfang Liu & Scott Rozelle, 2013. "The human capital roots of the middle income trap: the case of China," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 151-162, November.
    13. Harpaul Alberto Kohli & Natasha Mukherjee, 2011. "Potential Costs to Asia of the Middle Income Trap," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 291-311, September.
    14. Shekhar Aiyar & Romain A Duval & Damien Puy & Yiqun Wu & Longmei Zhang, 2013. "Growth Slowdowns and the Middle-Income Trap," IMF Working Papers 13/71, International Monetary Fund.
    15. Homi Kharas & Harinder Kohli, 2011. "What Is the Middle Income Trap, Why do Countries Fall into It, and How Can It Be Avoided?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 281-289, September.
    16. Anna Jankowska & Arne Nagengast & José Ramón Perea, 2012. "The Product Space and the Middle-Income Trap: Comparing Asian and Latin American Experiences," OECD Development Centre Working Papers 311, OECD Publishing.
    17. repec:eab:tradew:23424 is not listed on IDEAS
    18. Bulman, David & Eden, Maya & Nguyen, Ha, 2014. "Transitioning from low-income growth to high-income growth : is there a middle income trap ?," Policy Research Working Paper Series 7104, The World Bank.
    19. Tho, Tran Van, 2013. "The Middle-Income Trap: Issues for Members of the Association of Southeast Asian Nations," ADBI Working Papers 421, Asian Development Bank Institute.
    20. repec:eab:macroe:23424 is not listed on IDEAS
    21. Martin Raiser & Indermit S. Gill, 2012. "Golden Growth : Restoring the Lustre of the European Economic Model," World Bank Publications, The World Bank, number 6016, March.
    22. Nazrul Islam, 2014. "Will Inequality Lead China to the Middle Income Trap?," Frontiers of Economics in China, Higher Education Press, vol. 9(3), pages 398-437, September.
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    Cited by:

    1. Glawe, Linda & Wagner, Helmut, 2016. "China in the Middle-Income Trap?," MPRA Paper 73336, University Library of Munich, Germany.
    2. Han, Xuehui & Wei, Shang-Jin, 2017. "Re-examining the middle-income trap hypothesis (MITH): What to reject and what to revive?," Journal of International Money and Finance, Elsevier, vol. 73(PA), pages 41-61.

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    Economic Theory&Research; Emerging Markets; Labor Policies; Inequality; Climate Change Economics;

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