A Theoretical and Empirical Study on Over-Leaping the Middle Income Trap

Abstract

Newly developing countries which have entered from low income into middle income level (per capita GDP $4000-5000) with a period of rapid development encounter the slowing down of economic growth and long-term stagnation and are unable to pass the threshold of per capita GDP of $10, 000 because of the failure to achieve the transformation of economic development pattern or the external impact that leads to the lack of motivation for sustainable development as well as the out bursting of accumulated social contradictions, which is the so-called Middle Income Trap. Presently at global scale, only few countries and regions such as Korea, Japan and Hong Kong of China, etc., have successfully bypassed the Middle Income Trap and entered into high-income ranks.