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The Rise of the Middle Class and Economic Growth in ASEAN

Markus Brueckner, Era Dabla-Norris, Mark Gradstein and Daniel Lederman
Authors registered in the RePEc Author Service: Markus Brueckner ()

CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: We present estimates of the relationship between the share of income accruing to the middle class and GDP per capita of ASEAN economies. The increase in GDP per capita that ASEAN economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class in these countries. The impact of a rise of the middle class on economic growth depends on ASEAN countries' initial level of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth based on values of these countries' GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to GDP per capita growth. We show that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Keywords: Income Inequality; Economic Growth; ASEAN (search for similar items in EconPapers)
JEL-codes: O1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-gro, nep-his and nep-sea
Date: 2017-01
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Journal Article: The rise of the middle class and economic growth in ASEAN (2018) Downloads
Working Paper: The rise of the middle class and economic growth in ASEAN (2017) Downloads
Working Paper: The rise of the middle class and economic growth in ASEAN (2017) Downloads
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