The middle income trap: look closer and you’ll find it, but maybe not where you expected

ABSTRACT

The phenomenon of the middle-income trap or growth slowdowns at any range is analysed using non-parametric local regression with the relative change in per capita GNI as a function of per capita GNI relative to the high-income country average. The existence of a middle-income trap or range of relative GNI at which convergence halts is found to be determined by the degree of smoothing in the model. Support is found for the existence of ‘traps’ for lower-(middle)-income countries up to 10–13% of the high-income country average per capita GNI as well as for countries above 54%.

KEYWORDS:

• Middle-income trap
• economic growth
• economic development
• non-parametric estimation

JEL CLASSIFICATION:

• O10
• O40
• O47
• O53

Disclosure statement

No potential conflict of interest was reported by the author(s).