The Middle-Income Trap from a Schumpeterian Perspective

22 Pages Posted: 7 Jun 2018

See all articles by Philippe Aghion

Philippe Aghion

College de France and London School of Economics and Political Science, Fellow; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Cagatay Bircan

European Bank for Reconstruction and Development

Multiple version iconThere are 2 versions of this paper

Date Written: September 2017

Abstract

We provide an outline for viewing the middle-income trap through the lens of the Schumpeterian growth paradigm, which places the notion of creative destruction at the center of economic growth. Economic growth and development come from the interplay between changes in economic structure and supporting institutions at different stages of development, i.e., structural transformation. We present a view of the process of economic development that takes the microlevel growth of firms and their competitive interaction as its building blocks. We discuss how institutional factors affect the evolution of these building blocks in understanding growth outcomes at different stages of development.

Keywords: competition, creative destruction, middle-income trap, Schumpeterian growth

JEL Classification: O10, O11, O30, O40

Suggested Citation

Aghion, Philippe and Bircan, Cagatay, The Middle-Income Trap from a Schumpeterian Perspective (September 2017). ADBI Working Paper 521. Available at SSRN: https://ssrn.com/abstract=3187838 or http://dx.doi.org/10.2139/ssrn.3187838

Philippe Aghion (Contact Author)

College de France and London School of Economics and Political Science, Fellow ( email )

London
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Cagatay Bircan

European Bank for Reconstruction and Development ( email )

One Exchange Square
London, EC2A 2JN
United Kingdom
+442073388508 (Phone)
+442073386111 (Fax)

HOME PAGE: http://cagataybircan.com

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