The Middle-Income Trap: Myth or Reality?
4 Pages Posted: 17 Sep 2018 Last revised: 29 Mar 2019
Date Written: March 1, 2016
This note considers the most relevant literature and contends that, even if the ?middle income trap? is myth, it provides impetus for policy makers to reassess their strategies once the traditional sources of economic growth have diminished. Middle-income countries must find drivers of productivity, innovation, and competitiveness while strengthening the economic fundamentals that foster and stabilize growth. Reaching high-income levels is challenging, with a strong likelihood of growth slowdowns along the way. But stagnation is inevitable, and middle income countries must have patience to manage the transition responsibly, avoid pitfalls, and promote new opportunities.
Keywords: Economic Theory & Research, Private Sector Economics, Industrial Economics, Educational Sciences, Private Sector Development Law, International Trade and Trade Rules, Economic Growth, Marketing
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