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Middle-income traps in East Asia: An inquiry into causes for slowdown in income growth

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  • Otsuka, Keijiro
  • Higuchi, Yuki
  • Sonobe, Tetsushi

Abstract

If the middle-income traps were merely equated with prolonged growth slowdowns occurring in the middle-income stage, as it is in some empirical studies, this concept would lose the meaning of existence. This paper proposes a new definition that considers the trap the aggravation of slowdowns due to inadequate responses, such as the adoption of counterproductive policies or the failure to adopt policies conducive to growth. By using data from high-, middle- and low-income economies in East Asia, the paper asks which symptoms we should inspect in order to diagnose the middle-income trap when an economy is having a growth slowdown.

Suggested Citation

  • Otsuka, Keijiro & Higuchi, Yuki & Sonobe, Tetsushi, 2017. "Middle-income traps in East Asia: An inquiry into causes for slowdown in income growth," China Economic Review, Elsevier, vol. 46(S), pages 3-16.
    • Handle: RePEc:eee:chieco:v:46:y:2017:i:s:p:s3-s16
    DOI: 10.1016/j.chieco.2017.02.002
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    Cited by:

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    2. Daping Zhao & Sajid Anwar & W. Robert J. Alexander, 2022. "Sources of economic slowdown: A simultaneous equations approach," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 27(2), pages 2549-2565, April.
    3. Wiktor Błoch, 2021. "Determinants of the threat of the middle-income trap," Bank i Kredyt, Narodowy Bank Polski, vol. 52(4), pages 339-356.
    4. Bingqiang Li & Lei Huang, 2019. "The Effect of Incremental Innovation and Disruptive Innovation on the Sustainable Development of Manufacturing in China," SAGE Open, , vol. 9(1), pages 21582440198, February.
    5. Tingting Yu & Ah Rong & Feilong Hao, 2022. "Avoiding the middle‐income trap: The spatial–temporal effects of human capital on regional economic growth in Northeast China," Growth and Change, Wiley Blackwell, vol. 53(2), pages 536-558, June.
    6. Yaya, OlaOluwa S. & Furuoka, Fumitaka & Pui, Kiew Ling & Jacob, Ray Ikechukwu & Ezeoke, Chinyere M., 2020. "Investigating Asian regional income convergence using Fourier Unit Root test with Break," International Economics, Elsevier, vol. 161(C), pages 120-129.
    7. Kangchuan Su & Jiang Wu & Lulu Zhou & Hongji Chen & Qingyuan Yang, 2022. "The Functional Evolution and Dynamic Mechanism of Rural Homesteads under the Background of Socioeconomic Transition: An Empirical Study on Macro- and Microscales in China," Land, MDPI, vol. 11(8), pages 1-30, July.

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    More about this item

    Keywords

    Income traps; Human capital; Technology gap; Structural transformation; East Asia;
    All these keywords.

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P17 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Performance and Prospects

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