Abstract
In this research, the growth collapse experienced by 119 economic entities in the world from 1950 to 2010 is quantitatively analyzed. And the objective existence of the middle-income trap is proved from a statistical perspective. On this basis, the existing identification methods of middle-income trap are evaluated and revised. In addition, the late-developing economic entities that have been caught in the middle-income trap in history and the duration of the trap are identified, thus providing several policy references and guidance to step-over the middle-income trap.
Highlights
Whether an economy entity is caught in the middle-income trap is usually defined according to whether the time length required for the economy entity to enter the middle-income stage into the high-income stage or the growth rate reaches a certain threshold
Felipe et al define the middle-income trap by calculating the span duration threshold of the middle-income trap
By calculating the median of the duration of stay of the economy entities that entered the lower middle-income group after 1950 to reach the upper middle-income group and the high-income group, it is concluded that: if it takes more than 28 years to enter the upper middle-income group from the lower middle-income group, it is called to be caught in "lower middle-income trap"; if it takes more than 14 years to enter the high-income group from the upper middle-income group, it is called to be caught in "upper middle-income trap"
Summary
Whether an economy entity is caught in the middle-income trap is usually defined according to whether the time length required for the economy entity to enter the middle-income stage into the high-income stage or the growth rate reaches a certain threshold. The existing quantitative identification methods have certain defects and needs to be evaluated and corrected. Comprehensively considering the advantages and disadvantages of the existing methods, and combined with the characteristics of the catch-up process of the late-developing economy entities, a set of quantitative identification methods that are objective, scientific and forward-looking are proposed, providing several policy references and guidance to overcome the middle-income trap
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