The Deep Determinants at More Subtle Stages of Development: The Example of the Middle-Income Trap Phenomenon

Linda Glawe and Helmut Wagner

No 11/2017, CEAMeS Discussion Paper Series from University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS)

Abstract: The so-called 'deep determinants' of economic growth and development (namely, geography, institutions, and integration) have been found to be decisive for the break out of stagnation and for explaining cross-country income differences by many empirical studies. However, so far, very little has been done to examine to which extent they are also crucial at more subtle stages of economic development. Our paper aims to close this gap by focusing on the phenomenon of the middle-income trap (MIT) which has reached increasing attention in the last 15 years. In particular, we test whether the results of the empirical studies conducted by Acemoglu et al. (2001), Rodrik et al. (2004), and Easterly and Levine (2016) also remain valid when analyzing the MIT. We are the first to analyze the relationship between the deep determinants and the MIT, especially regarding the causal effect of institutional quality on the probability of experiencing a growth slowdown at the middle-income range. Our analysis reveals that while, in general, the deep determinants also seem to play an important role for the middle-income transition (and the question of whether a country falls into an MIT), some differences compared to the results of the standard literature become apparent.

Keywords: deep determinants of growth; economic development; economic growth; middle-income trap; geography; institutions; openness (search for similar items in EconPapers)
JEL-codes: O10 O11 O43 O57 (search for similar items in EconPapers)
Date: 2017, Revised 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/215653/1/ceames-dp-11rev.pdf (application/pdf)

Related works:
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:zbw:ceames:112017

DOI: 10.18445/20190124-103959-0

Access Statistics for this paper

More papers in CEAMeS Discussion Paper Series from University of Hagen, Center for East Asia Macro-economic Studies (CEAMeS) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().