IDEAS home Printed from https://ideas.repec.org/p/uwa/wpaper/13-12.html
   My bibliography  Save this paper

On the Existence of a Middle Income Trap

Author

Listed:
  • Peter E Robertson

    (Business School, University of Western Australia)

  • Longfeng Ye

    (Business School, University of Western Australia)

Abstract

The term "middle income trap" has been widely used in the literature, without having been clearly de ned or formally tested. We propose a statistical de nition of a middle income trap and derive a simple time-series test. We nd that the concept survives a rigorous scrutiny of the data, with the growth patterns of 19 countries being consistent with our de nition of a middle income trap..

Suggested Citation

  • Peter E Robertson & Longfeng Ye, 2013. "On the Existence of a Middle Income Trap," Economics Discussion / Working Papers 13-12, The University of Western Australia, Department of Economics.
    • Handle: RePEc:uwa:wpaper:13-12
    as

    Download full text from publisher

    File URL: https://www.business.uwa.edu.au/__data/assets/pdf_file/0007/2275774/13-12-On-the-Existence-of-a-Middle-Income-Trap.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Peter C. B. Phillips & Donggyu Sul, 2009. "Economic transition and growth," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(7), pages 1153-1185, November.
    2. Yusuf , Shahid & Nabeshima, Kaoru, 2009. "Can Malaysia escape the middle-income Trap ? a strategy for Penang," Policy Research Working Paper Series 4971, The World Bank.
    3. Barry Eichengreen & Donghyun Park & Kwanho Shin, 2012. "When Fast-Growing Economies Slow Down: International Evidence and Implications for China," Asian Economic Papers, MIT Press, vol. 11(1), pages 42-87, Winter/Sp.
    4. Peter C. B. Phillips & Donggyu Sul, 2007. "Transition Modeling and Econometric Convergence Tests," Econometrica, Econometric Society, vol. 75(6), pages 1771-1855, November.
    5. Aiyar, Shekhar & Duval, Romain & Puy, Damien & Wu, Yiqun & Zhang, Longmei, 2018. "Growth slowdowns and the middle-income trap," Japan and the World Economy, Elsevier, vol. 48(C), pages 22-37.
    6. Bianchi, Marco, 1997. "Testing for Convergence: Evidence from Non-parametric Multimodality Tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 12(4), pages 393-409, July-Aug..
    7. Felipe, Jesus, 2012. "Tracking the Middle-Income Trap: What is It, Who is in It, and Why? Part 2," ADB Economics Working Paper Series 307, Asian Development Bank.
    8. Charles I. Jones, 1997. "On the Evolution of the World Income Distribution," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 19-36, Summer.
    9. Di Vaio, Gianfranco & Enflo, Kerstin, 2011. "Did globalization drive convergence? Identifying cross-country growth regimes in the long run," European Economic Review, Elsevier, vol. 55(6), pages 832-844, August.
    10. Quah, Danny, 1993. "Empirical cross-section dynamics in economic growth," European Economic Review, Elsevier, vol. 37(2-3), pages 426-434, April.
    11. Quah, Danny, 1997. "Empirics for growth and distribution," LSE Research Online Documents on Economics 2138, London School of Economics and Political Science, LSE Library.
    12. Zivot, Eric & Andrews, Donald W K, 2002. "Further Evidence on the Great Crash, the Oil-Price Shock, and the Unit-Root Hypothesis," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 25-44, January.
    13. Charles I. Jones, 2002. "Sources of U.S. Economic Growth in a World of Ideas," American Economic Review, American Economic Association, vol. 92(1), pages 220-239, March.
    14. Maria Grazia Pittau & Roberto Zelli & Paul A. Johnson, 2010. "Mixture Models, Convergence Clubs, And Polarization," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(1), pages 102-122, March.
    15. Bernard, Andrew B & Durlauf, Steven N, 1995. "Convergence in International Output," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 97-108, April-Jun.
    16. Rod Tyers & Aaron Walker, 2016. "Quantifying Australia's ‘Three-Speed’ Boom," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 49(1), pages 20-43, March.
    17. Pierse, R. G. & Snell, A. J., 1995. "Temporal aggregation and the power of tests for a unit root," Journal of Econometrics, Elsevier, vol. 65(2), pages 333-345, February.
    18. Indermit Gill & Homi Kharas, 2007. "An East Asian Renaissance : Ideas for Economic Growth," World Bank Publications - Books, The World Bank Group, number 6798.
    19. Stock, James H & Watson, Mark W, 1993. "A Simple Estimator of Cointegrating Vectors in Higher Order Integrated Systems," Econometrica, Econometric Society, vol. 61(4), pages 783-820, July.
    20. Robin L. Lumsdaine & David H. Papell, 1997. "Multiple Trend Breaks And The Unit-Root Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 79(2), pages 212-218, May.
    21. Danny Quah, 1997. "Empirics for Growth and Distribution," CEP Discussion Papers dp0324, Centre for Economic Performance, LSE.
    22. Felipe, Jesus, 2012. "Tracking the Middle-Income Trap: What is It, Who is in It, and Why? Part 1," ADB Economics Working Paper Series 306, Asian Development Bank.
    23. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    24. Quah, Danny, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," CEPR Discussion Papers 1586, C.E.P.R. Discussion Papers.
    25. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, vol. 40(6), pages 1353-1375, June.
    26. Gisele Hites, 2000. "On the Robustness of the Twin-Peaked Ergodic Distribution of Income Across Countries," Econometric Society World Congress 2000 Contributed Papers 1369, Econometric Society.
    27. Jesus Felipe & Arnelyn Abdon & Utsav Kumar, 2012. "Tracking the Middle-income Trap: What Is It, Who Is in It, and Why?," Economics Working Paper Archive wp_715, Levy Economics Institute.
    28. Landon-Lane, John S. & Robertson, Peter E., 2009. "Long-run growth in the OECD: A test of the parallel growth paths hypothesis," Explorations in Economic History, Elsevier, vol. 46(3), pages 346-355, July.
    29. Quah, Danny T, 1997. "Empirics for Growth and Distribution: Stratification, Polarization, and Convergence Clubs," Journal of Economic Growth, Springer, vol. 2(1), pages 27-59, March.
    30. H. Y. Izan & Kenneth W. Clements, 2003. "Report of the 2003 PhD Conference in Economics and Business," Economics Discussion / Working Papers 03-23, The University of Western Australia, Department of Economics.
    31. Homi Kharas & Harinder Kohli, 2011. "What Is the Middle Income Trap, Why do Countries Fall into It, and How Can It Be Avoided?," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 3(3), pages 281-289, September.
    32. Greasley, David & Oxley, Les, 1997. "Time-series based tests of the convergence hypothesis: Some positive results," Economics Letters, Elsevier, vol. 56(2), pages 143-147, October.
    33. Li, Qing & Papell, David, 1999. "Convergence of international output Time series evidence for 16 OECD countries," International Review of Economics & Finance, Elsevier, vol. 8(3), pages 267-280, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Johnson & Chris Papageorgiou, 2020. "What Remains of Cross-Country Convergence?," Journal of Economic Literature, American Economic Association, vol. 58(1), pages 129-175, March.
    2. Mehmet Hanefi Topal, 2020. "The Middle Income Trap: Theory and Empirical Evidence," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 34(1), pages 51-75.
    3. Durlauf, Steven N. & Quah, Danny T., 1999. "The new empirics of economic growth," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 4, pages 235-308, Elsevier.
    4. Yaya, OlaOluwa S & Vo, Xuan Vinh & Adekoya, Oluwasegun B., 2021. "Convergence among themselves and Middle-income trap of South-East Asian Nations: Findings from a New approach," MPRA Paper 109372, University Library of Munich, Germany.
    5. Le Pen, Yannick, 2011. "A pair-wise approach to output convergence between European regions," Economic Modelling, Elsevier, vol. 28(3), pages 955-964, May.
    6. Fernando Gabriel Im & David Rosenblatt, 2015. "Middle-Income Traps: A Conceptual and Empirical Survey," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 6(03), pages 1-39.
    7. Rafael Morales-Lage & Aurelia Bengochea-Morancho & Mariam Camarero & Inmaculada Martínez-Zarzoso, 2017. "Stochastic and club convergence of sectoral CO2 emissions in the European Union," Working Papers 2017/01, Economics Department, Universitat Jaume I, Castellón (Spain).
    8. Gadea Rivas, Maria Dolores & Sanz Villarroya, Isabel, 2017. "Testing the convergence hypothesis for OECD countries: A reappraisal," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 11, pages 1-22.
    9. Steven N. Durlauf & Andros Kourtellos & Chih Ming Tan, 2008. "Empirics of Growth and Development," Chapters, in: Amitava Krishna Dutt & Jaime Ros (ed.), International Handbook of Development Economics, Volumes 1 & 2, volume 0, chapter 3, Edward Elgar Publishing.
    10. K.P. Gluschenko (glu@nsu.ru ), 2010. "Income inequality in Russian regions: comparative analysis," Journal "Region: Economics and Sociology", Institute of Economics and Industrial Engineering of Siberian Branch of RAS, vol. 4.
    11. Haupt, Harry & Schnurbus, Joachim & Semmler, Willi, 2018. "Estimation of grouped, time-varying convergence in economic growth," Econometrics and Statistics, Elsevier, vol. 8(C), pages 141-158.
    12. Ordás Criado, C. & Grether, J.-M., 2011. "Convergence in per capita CO2 emissions: A robust distributional approach," Resource and Energy Economics, Elsevier, vol. 33(3), pages 637-665, September.
    13. Giovanni Caggiano & Leone Leonida, 2009. "International output convergence: evidence from an autocorrelation function approach," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 24(1), pages 139-162.
    14. Alfred Greiner & Jens J. Krueger, 2001. "Indeterminacy and the distribution of growth rates," Economics Bulletin, AccessEcon, vol. 15(6), pages 1-8.
    15. Konstantin Gluschenko, 2010. "Methodologies of Analyzing Inter-Regional Income Inequality and Their Applications to Russia," William Davidson Institute Working Papers Series wp984, William Davidson Institute at the University of Michigan.
    16. Kounetas, Konstantinos E. & Polemis, Michael L. & Tzeremes, Nickolaos G., 2021. "Measurement of eco-efficiency and convergence: Evidence from a non-parametric frontier analysis," European Journal of Operational Research, Elsevier, vol. 291(1), pages 365-378.
    17. Andreas Pyka & Jens J. Kruger & Uwe Cantner, 2003. "Twin Peaks: What the Knowledge-based Approach Can Say about the Dynamics of the World Income Distribution," Chapters, in: Pier Paolo Saviotti (ed.), Applied Evolutionary Economics, chapter 9, Edward Elgar Publishing.
    18. Nicholas Apergis & Christina Christou & Rangan Gupta & Stephen M. Miller, 2018. "Convergence in Income Inequality: Further Evidence from the Club Clustering Methodology across States in the U.S," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 24(2), pages 147-161, May.
    19. Daniel J. Henderson & Christopher F. Parmeter & R. Robert Russell, 2008. "Modes, weighted modes, and calibrated modes: evidence of clustering using modality tests," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 23(5), pages 607-638.
    20. Răileanu-Szeles, Monica & Albu, Lucian, 2015. "Nonlinearities and divergences in the process of European financial integration," Economic Modelling, Elsevier, vol. 46(C), pages 416-425.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:13-12. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sam Tang (email available below). General contact details of provider: https://edirc.repec.org/data/deuwaau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.