The Middle-Income Transition around the Globe: Characteristics of Graduation and Slowdown
41 Pages Posted: 7 Apr 2015
Date Written: April 6, 2015
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.
Keywords: middle-income trap, transition, economic development, slowdown
JEL Classification: O14, O33, O40, O53
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