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Middle-Income Trap in Asia

The middle-income trap refers to the phenomenon where rapidly growing economies stagnate at middle-income levels and fail to transition into a high-income economy. We analyze the factors that may lead a country to fall into the middle-income trap and examine measures that could prevent it. Cross-country studies are conducted to draw lessons and experiences.


5 January 2018 Opening-up in the upper middle-income stage: Implications from international experiences - Asia Pathways

After rapid economic growth lasting more than 30 years, the People’s Republic of China (PRC) has stepped into the upper middle-income stage.

21 June 2017 Distortions, growth catch-up, and the middle-income trap - Asia Pathways

In theory, a distortion refers to a departure from the perfect competitive equilibrium with no externalities and in which resources have been optimally allocated so that each economic agent maximizes his or her own welfare.

13 April 2017 Escaping the middle income trap: Innovate or perish - Asia Pathways

The “middle income trap” captures the situation where a middle income country can no longer compete internationally in standardized, labor-intensive commodities because wages are relatively too high, and it can also not compete in higher value added activities on a broad enough scale because productivity is relatively too low.