Convergence Success and the Middle-Income Trap

Abstract

Emerging economies have an increasing influence on the global economy and there is general optimism regarding their prospects. However, given a sustained income gap between emerging and advanced economies, there is concern that many emerging economies will never match the advanced economies in terms of their per capita income, and will be trapped in a middle-income status. Thus, the approach to sustaining economic growth is an important policy challenge. This paper investigates what those sources of sustained long-term growth are, focusing on the experiences of middle-income emerging economies over the past half century.