The Middle-Income Trap Turns Ten

Kharas, Homi; Gill, Indermit S.

The Middle-Income Trap Turns Ten

Autores

Kharas, Homi

Gill, Indermit S.

Editor

World Bank, Washington, DC

Descripción

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.

Palabras clave

MIC TRAPS, GROWTH RATES, MONETARY POLICY, CAPITAL MARKETS, UNEMPLOYMENT RATES, ECONOMIC GROWTH, CLOSED ECONOMIES, URBANIZATION, TRADE NEGOTIATIONS, CAPITAL ACCUMULATION, FOREIGN INVESTORS, STRUCTURAL CHANGE, MACROECONOMIC MANAGEMENT, INCOME, INTEREST, MIDDLE- INCOME COUNTRY, EXPECTATIONS, EMERGING ECONOMIES, FLEXIBLE EXCHANGE RATES, PROPERTY RIGHTS, EXCHANGE, ECONOMIC DEVELOPMENTS, GDP PER CAPITA, LIQUIDITY, DEVELOPING COUNTRIES, EXPORTS, ELASTICITY, ENTRY POINT, POLITICAL ECONOMY, WORLD DEVELOPMENT INDICATORS, INCENTIVES, VARIABLES, ENVIRONMENTAL SUSTAINABILITY, PRICE, BENCHMARKS, SUSTAINABLE DEVELOPMENT, BANKRUPTCY, PROTECTIONISM, FREE TRADE, ECONOMIC STRUCTURES, WAGE GROWTH, TRENDS, SAFETY NETS, ECONOMIC OUTLOOK, CENTRAL BANK, EXTERNAL FINANCE, DEVELOPMENT, FOREIGN MARKETS, PER CAPITA INCOMES, ADVANCED COUNTRIES, INTERNATIONAL FINANCE, PUBLIC POLICY, LABOR MARKET, TOTAL FACTOR PRODUCTIVITY, PER CAPITA INCOME, CURRENCY, DEVELOPMENT ECONOMICS, LOW-INCOME COUNTRIES, RENT, POLITICAL POWER, DEMOCRACY, EXCHANGE RATES, PRODUCTIVITY, MIDDLE-INCOME ECONOMIES, EXTERNALITIES, INDUSTRIALIZATION, GLOBALIZATION, MARKETS, WTO, INCOME LEVELS, VENTURE CAPITAL, MIDDLE-INCOME COUNTRIES, TRADE POLICY, NATURAL RESOURCES, CAPITAL INVESTMENTS, REAL ESTATE, LIBERALIZATION, ECONOMIC RESEARCH, CARBON EMISSIONS, TAXES, GROWTH THEORIES, INSTITUTIONAL INFRASTRUCTURE, UNEMPLOYMENT, DEREGULATION, EQUITY, INVESTORS, PRODUCTIVITY GROWTH, SOCIAL SAFETY NETS, HUMAN CAPITAL, TECHNOLOGICAL CHANGE, FEDERAL RESERVE, VALUE ADDED, ECONOMIC PERFORMANCE, CAPITAL, WAGES, EFFICIENT CAPITAL, INTERNATIONAL TRADE, VOLATILITY, BARRIERS, MARKET CONDITIONS, FINANCIAL CRISIS, STARTUPS, MARKET PRICES, FUTURE, VALUE, COMPETITIVENESS, FOREIGN DIRECT INVESTMENT, PATENTS, NATIONAL INCOME, KNOWLEDGE ECONOMY, DIVIDEND, ECONOMY, AGRICULTURE, INCOMES, MIDDLE- INCOME ECONOMIES, GROWTH MODELS, ECONOMIC RENTS, INSTITUTIONAL CAPACITY, BALANCE SHEET, BENCHMARK, TRADE LIBERALIZATION, MIDDLE-INCOME COUNTRY, MIDDLE- INCOME COUNTRIES, ECONOMICS, TRADE DIVERSION, GOVERNANCE, INFRASTRUCTURE INVESTMENTS, SOCIAL CAPITAL, REGIONAL INTEGRATION, ECONOMIC DEVELOPMENT, ADVANCED COUNTRY, TRADE, GDP, GOODS, THEORY, GROWTH RATE, INVESTMENT, TOTAL FACTOR PRODUCTIVITY GROWTH, SHARE, COMPARATIVE ADVANTAGE, FINANCIAL MARKETS, ECONOMIC PROGRESS, BANKING, CURRENCY RISK, DECENTRALIZATION, MONEY MARKET, INVESTMENTS, RISK MANAGEMENT, INTELLECTUAL PROPERTY, CAPITAL FLOW, GROWTH THEORY, RAPID GROWTH, EXCHANGE RATE, DEMOGRAPHIC, CUSTOMERS, ECONOMIC GEOGRAPHY, CAPITAL INVESTMENT, LABOR MARKETS, FINANCIAL SECTOR, OPEN ECONOMIES, MACROECONOMIC PERFORMANCE, CAPITAL ACCOUNT, GROWTH POTENTIAL, MIDDLE INCOME COUNTRIES, GLOBAL ECONOMIC PROSPECTS, PRICES, DEVELOPMENT POLICY, COMPETITION