TWO MANIFESTATIONS OF THE MIDDLE-INCOME TRAP IN EAST-CENTRAL EUROPE

Tamás Tibor Csontos ()
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Tamás Tibor Csontos: Institute of World Economics, Centre for Economic and Regional Studies

Global Economic Observer, 2024, vol. 12, issue 2, 15-24

Abstract: The paper attempts to reinterpret the concept of the middle-income trap and develops the theory of participation and self-effort. On this basis, the paper distinguishes two different types of middle-income traps. The exclusion trap, which is the result of a one-sided focus on the self-effort, and the vulnerability trap, which is the result of a one-sided focus on participation. The model argues that catching-up can be achieved when the participation and the self-effort are in harmony. The paper also uses this approach to analyse the middle-income trap in East-Central European countries, demonstrating the empirical validity of the theory. It associates socialist planned economies with the exclusion trap, while identifying the dependent market economy model that emerged after regime change with the vulnerability trap.

Keywords: middle-income trap; East-Central Europe; dependent market economy (search for similar items in EconPapers)
JEL-codes: O14 O52 P52 (search for similar items in EconPapers)
Date: 2024-12
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Persistent link: https://EconPapers.repec.org/RePEc:ntu:ntugeo:vol12-iss2-15-24

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