GROWTH SLOWDOWNS AND MIDDLE-INCOME TRAP: EVIDENCE FROM NEW UNIT ROOT FRAMEWORK

Fumitaka Furuoka, Kiew Ling Pui (), Chinyere Ezeoke (), Ray Jacob and Olaoluwa Yaya
Additional contact information
Kiew Ling Pui: Department of Economics, Faculty of Economics and Administration, University of Malaya, Malaysia
Chinyere Ezeoke: Faculty of Law, University of Malaya, Malaysia

The Singapore Economic Review (SER), 2024, vol. 69, issue 01, 461-477

Abstract: This paper suggests a new testing procedure to systematically examine the middle-income trap (MIT). To empirically demonstrate this procedure, one high income and 14 middle-income countries are examined using newly developed unit root tests — Fourier ADF with structural break (FADF-SB) and Seemingly Unrelated Regressions Fourier ADF (SUR-FADF). The FADF-SB test incorporates unknown nonlinearity and smooth break in the time-series, while the SUR-FADF test accounts for cross-sectional dependency. The empirical findings produced mixed results: 10 countries have a relatively high possibility of facing the MIT problem, while only one country has a relatively low possibility of facing the problem. For the remaining three countries, it is uncertain whether they will face the problem of MIT. These empirical findings have significant policy implications.

Keywords: Cross-sectional dependency; Fourier approximation; income convergence; middle-income trap; structural break; unit root (search for similar items in EconPapers)
JEL-codes: C19 C22 N17 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.worldscientific.com/doi/abs/10.1142/S0217590820500083
Access to full text is restricted to subscribers

Related works:
Working Paper: Growth Slowdowns and Middle-Income Trap: Evidence from New Unit Root Framework (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:serxxx:v:69:y:2024:i:01:n:s0217590820500083

Ordering information: This journal article can be ordered from

DOI: 10.1142/S0217590820500083

Access Statistics for this article

The Singapore Economic Review (SER) is currently edited by Euston Quah

More articles in The Singapore Economic Review (SER) from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().