Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?

Is there a "middle income trap"? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth...

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Main Authors:	Bulman, David, Eden, Maya, Nguyen, Ha
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank Group, Washington, DC 2014
Subjects:	AGRICULTURE ANNUAL CHANGE ANNUAL GROWTH ANNUAL INFLATION AVERAGE ANNUAL AVERAGE CHANGE AVERAGE GROWTH BASE YEAR CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL STOCKS CAPITAL-LABOR RATIO CIVIL WAR CONDITIONAL CONVERGENCE COUNTRY CHARACTERISTICS COUNTRY GROWTH PERFORMANCE COUNTRY LEVEL CROSS-COUNTRY INCOME DATA SET DEBT DEMOCRACY DEMOGRAPHIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVIDEND ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC STRUCTURE EXPORTS EXTERNAL DEBT EXTERNAL SHOCKS FACTOR SHARES FERTILITY RATE FINANCIAL DEVELOPMENT FUTURE GROWTH GDP GDP PER CAPITA GINI COEFFICIENT GINI COEFFICIENTS GOVERNANCE INDICATORS GROWTH ACCELERATION GROWTH DETERMINANTS GROWTH EFFECT GROWTH LITERATURE GROWTH PERFORMANCE GROWTH POLICIES GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH GROWTH HIGH INCOME HIGH INCOME COUNTRIES HIGH INCOME COUNTRY HIGH INFLATION HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COUNTRIES INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROUP INCOME GROUPS INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEQUALITY INEQUALITY DATA INFLATION INSTITUTIONAL CONSTRAINTS INTERNATIONAL COMPARISONS INVENTORY LAGGED GROWTH LOW INCOME MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMICS MEDIAN AVERAGE MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS NEGATIVE COEFFICIENT OIL EXPORTERS OUTPUT PATENTS PER CAPITA INCOME PER CAPITA INCOME LEVELS PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL REGIME POOR COUNTRIES POSITIVE CORRELATION POSITIVE EFFECT PRIMARY EDUCATION PRO-GROWTH POLICIES PRODUCTION FUNCTION RAPID GROWTH RATE OF INVESTMENT REAL EXCHANGE RATE REAL EXCHANGE RATES REGIME CHANGES REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE INCOME SERIAL CORRELATION TOTAL FACTOR PRODUCTIVITY UNDERVALUATION WAGE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2014/11/20373154/transitioning-low-income-growth-high-income-growth-middle-income-trap http://hdl.handle.net/10986/20614

id	okr-10986-20614
recordtype	oai_dc
spelling	okr-10986-206142021-04-23T14:03:59Z Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap? Bulman, David Eden, Maya Nguyen, Ha AGRICULTURE ANNUAL CHANGE ANNUAL GROWTH ANNUAL INFLATION AVERAGE ANNUAL AVERAGE CHANGE AVERAGE GROWTH BASE YEAR CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL STOCKS CAPITAL-LABOR RATIO CIVIL WAR CONDITIONAL CONVERGENCE COUNTRY CHARACTERISTICS COUNTRY GROWTH PERFORMANCE COUNTRY LEVEL CROSS-COUNTRY INCOME DATA SET DEBT DEMOCRACY DEMOGRAPHIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVIDEND ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC STRUCTURE EXPORTS EXTERNAL DEBT EXTERNAL SHOCKS FACTOR SHARES FERTILITY RATE FINANCIAL DEVELOPMENT FUTURE GROWTH GDP GDP PER CAPITA GINI COEFFICIENT GINI COEFFICIENTS GOVERNANCE INDICATORS GROWTH ACCELERATION GROWTH DETERMINANTS GROWTH EFFECT GROWTH LITERATURE GROWTH PERFORMANCE GROWTH POLICIES GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH GROWTH HIGH INCOME HIGH INCOME COUNTRIES HIGH INCOME COUNTRY HIGH INFLATION HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COUNTRIES INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROUP INCOME GROUPS INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEQUALITY INEQUALITY DATA INFLATION INSTITUTIONAL CONSTRAINTS INTERNATIONAL COMPARISONS INVENTORY LAGGED GROWTH LOW INCOME MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMICS MEDIAN AVERAGE MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS NEGATIVE COEFFICIENT OIL EXPORTERS OUTPUT PATENTS PER CAPITA INCOME PER CAPITA INCOME LEVELS PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL REGIME POOR COUNTRIES POSITIVE CORRELATION POSITIVE EFFECT PRIMARY EDUCATION PRO-GROWTH POLICIES PRODUCTION FUNCTION RAPID GROWTH RATE OF INVESTMENT REAL EXCHANGE RATE REAL EXCHANGE RATES REGIME CHANGES REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE INCOME SERIAL CORRELATION TOTAL FACTOR PRODUCTIVITY UNDERVALUATION WAGE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY Is there a "middle income trap"? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth strategies that are effective at high income levels, they may stagnate at some middle income level; this phenomenon can be thought of as a "middle income trap." This paper does not find evidence for (unusual) stagnation at any particular middle income level. However, it does find evidence that the determinants of growth at low and high income levels differ. These findings suggest a mixed conclusion: middle-income countries may need to change growth strategies to transition smoothly to high-income growth strategies, but this can be done smoothly and does not imply the existence of a middle income trap. 2014-12-03T15:53:39Z 2014-12-03T15:53:39Z 2014-11-01 http://documents.worldbank.org/curated/en/2014/11/20373154/transitioning-low-income-growth-high-income-growth-middle-income-trap http://hdl.handle.net/10986/20614 English en_US Policy Research Working Paper;No. 7104 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	AGRICULTURE ANNUAL CHANGE ANNUAL GROWTH ANNUAL INFLATION AVERAGE ANNUAL AVERAGE CHANGE AVERAGE GROWTH BASE YEAR CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL STOCKS CAPITAL-LABOR RATIO CIVIL WAR CONDITIONAL CONVERGENCE COUNTRY CHARACTERISTICS COUNTRY GROWTH PERFORMANCE COUNTRY LEVEL CROSS-COUNTRY INCOME DATA SET DEBT DEMOCRACY DEMOGRAPHIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVIDEND ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC STRUCTURE EXPORTS EXTERNAL DEBT EXTERNAL SHOCKS FACTOR SHARES FERTILITY RATE FINANCIAL DEVELOPMENT FUTURE GROWTH GDP GDP PER CAPITA GINI COEFFICIENT GINI COEFFICIENTS GOVERNANCE INDICATORS GROWTH ACCELERATION GROWTH DETERMINANTS GROWTH EFFECT GROWTH LITERATURE GROWTH PERFORMANCE GROWTH POLICIES GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH GROWTH HIGH INCOME HIGH INCOME COUNTRIES HIGH INCOME COUNTRY HIGH INFLATION HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COUNTRIES INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROUP INCOME GROUPS INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEQUALITY INEQUALITY DATA INFLATION INSTITUTIONAL CONSTRAINTS INTERNATIONAL COMPARISONS INVENTORY LAGGED GROWTH LOW INCOME MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMICS MEDIAN AVERAGE MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS NEGATIVE COEFFICIENT OIL EXPORTERS OUTPUT PATENTS PER CAPITA INCOME PER CAPITA INCOME LEVELS PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL REGIME POOR COUNTRIES POSITIVE CORRELATION POSITIVE EFFECT PRIMARY EDUCATION PRO-GROWTH POLICIES PRODUCTION FUNCTION RAPID GROWTH RATE OF INVESTMENT REAL EXCHANGE RATE REAL EXCHANGE RATES REGIME CHANGES REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE INCOME SERIAL CORRELATION TOTAL FACTOR PRODUCTIVITY UNDERVALUATION WAGE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY
spellingShingle	AGRICULTURE ANNUAL CHANGE ANNUAL GROWTH ANNUAL INFLATION AVERAGE ANNUAL AVERAGE CHANGE AVERAGE GROWTH BASE YEAR CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL STOCKS CAPITAL-LABOR RATIO CIVIL WAR CONDITIONAL CONVERGENCE COUNTRY CHARACTERISTICS COUNTRY GROWTH PERFORMANCE COUNTRY LEVEL CROSS-COUNTRY INCOME DATA SET DEBT DEMOCRACY DEMOGRAPHIC DEPENDENT VARIABLE DEVELOPING COUNTRIES DEVELOPMENT POLICY DIVIDEND ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC REFORMS ECONOMIC REVIEW ECONOMIC STRUCTURE EXPORTS EXTERNAL DEBT EXTERNAL SHOCKS FACTOR SHARES FERTILITY RATE FINANCIAL DEVELOPMENT FUTURE GROWTH GDP GDP PER CAPITA GINI COEFFICIENT GINI COEFFICIENTS GOVERNANCE INDICATORS GROWTH ACCELERATION GROWTH DETERMINANTS GROWTH EFFECT GROWTH LITERATURE GROWTH PERFORMANCE GROWTH POLICIES GROWTH RATE GROWTH RATES GROWTH REGRESSIONS HIGH GROWTH HIGH INCOME HIGH INCOME COUNTRIES HIGH INCOME COUNTRY HIGH INFLATION HOUSEHOLD SURVEYS HUMAN CAPITAL INCOME INCOME COUNTRIES INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DYNAMICS INCOME GROUP INCOME GROUPS INCOME GROWTH INCOME LEVEL INCOME LEVELS INDUSTRIALIZATION INEQUALITY INEQUALITY DATA INFLATION INSTITUTIONAL CONSTRAINTS INTERNATIONAL COMPARISONS INVENTORY LAGGED GROWTH LOW INCOME MACROECONOMIC CONDITIONS MACROECONOMIC MANAGEMENT MACROECONOMICS MEDIAN AVERAGE MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE INCOME COUNTRY MIDDLE-INCOME COUNTRIES MONETARY ECONOMICS NEGATIVE COEFFICIENT OIL EXPORTERS OUTPUT PATENTS PER CAPITA INCOME PER CAPITA INCOME LEVELS PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POLITICAL ECONOMY POLITICAL REGIME POOR COUNTRIES POSITIVE CORRELATION POSITIVE EFFECT PRIMARY EDUCATION PRO-GROWTH POLICIES PRODUCTION FUNCTION RAPID GROWTH RATE OF INVESTMENT REAL EXCHANGE RATE REAL EXCHANGE RATES REGIME CHANGES REGRESSION ANALYSIS REGRESSION RESULTS RELATIVE INCOME SERIAL CORRELATION TOTAL FACTOR PRODUCTIVITY UNDERVALUATION WAGE WORLD DEVELOPMENT INDICATORS WORLD ECONOMY Bulman, David Eden, Maya Nguyen, Ha Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
relation	Policy Research Working Paper;No. 7104
description	Is there a "middle income trap"? Theory suggests that the determinants of growth at low and high income levels may be different. If countries struggle to transition from growth strategies that are effective at low income levels to growth strategies that are effective at high income levels, they may stagnate at some middle income level; this phenomenon can be thought of as a "middle income trap." This paper does not find evidence for (unusual) stagnation at any particular middle income level. However, it does find evidence that the determinants of growth at low and high income levels differ. These findings suggest a mixed conclusion: middle-income countries may need to change growth strategies to transition smoothly to high-income growth strategies, but this can be done smoothly and does not imply the existence of a middle income trap.
format	Publications & Research :: Policy Research Working Paper
author	Bulman, David Eden, Maya Nguyen, Ha
author_facet	Bulman, David Eden, Maya Nguyen, Ha
author_sort	Bulman, David
title	Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
title_short	Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
title_full	Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
title_fullStr	Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
title_full_unstemmed	Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?
title_sort	transitioning from low-income growth to high-income growth : is there a middle income trap?
publisher	World Bank Group, Washington, DC
publishDate	2014
url	http://documents.worldbank.org/curated/en/2014/11/20373154/transitioning-low-income-growth-high-income-growth-middle-income-trap http://hdl.handle.net/10986/20614
_version_	1764446905837813760

Transitioning from Low-Income Growth to High-Income Growth : Is There a Middle Income Trap?

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