Middle-Income Growth Traps
By P. Agénor, Otaviano Canuto. 2012
203 citations recorded by the source corpus.
This paper studies the existence of middle-income growth traps in a two-period overlapping generations model of economic growth with two types of labor and endogenous occupational choices. It also distinguishes between “basic” and “advanced” infrastructure, with the latter promoting design activities, and accounts for a knowledge network externality associated with product diversification. Multiple steady-state equilibria may emerge, one of them taking the form of a low-growth trap characterized by low productivity growth and a misallocation of talent—defined as a relatively low share of high-ability workers in design activities. Improved access to advanced infrastructure may help to escape from that trap. The implications of other public policies, including the protection of property rights and labor market reforms, are also discussed.
Subfields: Economics and Econometrics, Political Science and International Relations
View Paper: https://www.semanticscholar.org/paper/3427d57039b502d55d8e2155472a6b450b1361b0
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Citations in the corpus
- Growth slowdowns and the middle-income trap (2013, methodology): “11 For some recent theoretical attempt at characterizing a middle-income trap, see Agenor and Canuto (2012).”
- The Middle-Income Trap Turns Ten (2015, unknown): “This same conclusion is reached by Agenor and Canuto (2012).”
- Avoiding Middle-Income Growth Traps (2012, unknown): “Drawing on the findings of a recently released working paper (Agénor and Canuto 2012), as well as a growing body of research on growth slowdowns, this note provides an analytical characterization of “middleincome traps” as stable, low-growth economic equilibria where talent is misallocated and…”