The Middle-Income Trap: Navigating the Ambiguity of the Concept. Data and Code

This study examines the middle-income trap hypothesis, a concept widely debated in economic literature. It aims to systematize various definitions of the concept and assess how definitional differences influence conclusions about development paths and income group transitions. Econometric analysis reveals that these differences have minimal impact on transition probabilities, making discussions on the trap's formation factors largely definition-independent. Sharp economic slowdowns linked to the trap arise from factors distinct from those driving upward income transitions but may signal a long-term decline in the likelihood of such transitions. The definitional diversity complicates applying the hypothesis to specific countries.