[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/pfq/journl/v64y2019i1p30-50.html
   My bibliography  Save this article

Middle-Income Trap or Development Trap and its Budgetary Effects

Author

Listed:
  • Csath, Magdolna
Abstract
Recently there have been debates about whether the Hungarian economy could end up in a so-called middle-income trap in the near future. Some argue this risk is on the rise. Others focus more on whether this threat is even real and how it could be avoided if indeed it is. What do we mean by middle-income trap? This isn’t clarified in either Hungarian or international literature. There are doubts about whether it is even possible to measure the success of an economy and of society with the income growth indicators researchers usually use to demonstrate the trap situation, or if we should instead take a closer look at the evolution of sustainable growth indicators. The topic is made particularly important by the fact that for budgetary balance, it is important that income sources are created in a consistent and reliable way, which, besides the yearly growth rate, also depends on balanced development. This article analyzes what the literature means by middle-income trap and argues that there is no way to reliably prove a potential halt of development based on the indicators used to measure it. Therefore, it introduces new indicators also measuring growth and examines the situation of multiple countries and their development paths based on international data, using these indicators. Finally, it concludes that the Hungarian economy’s growth rate could primarily be accelerated by modernizing the knowledge structure of the economy and by increasing the share of activities with a high added value and those that incorporate knowledge and innovation.

Suggested Citation

  • Csath, Magdolna, 2019. "Middle-Income Trap or Development Trap and its Budgetary Effects," Public Finance Quarterly, Corvinus University of Budapest, vol. 64(1), pages 30-50.
    • Handle: RePEc:pfq:journl:v:64:y:2019:i:1:p:30-50
    as

    Download full text from publisher

    File URL: https://unipub.lib.uni-corvinus.hu/8701/
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Prajapati, Vishwajeet Singh & Priya, Ashutosh & Pradhan, Vikas, 2023. "The Middle-Income Trap – A Problem Of Definition And Empirical Research," Economic and Regional Studies (Studia Ekonomiczne i Regionalne), John Paul II University of Applied Sciences in Biala Podlaska, vol. 16(3), September.
    2. Magdolna Csath, 2022. "Growth or Development Trap," Financial and Economic Review, Magyar Nemzeti Bank (Central Bank of Hungary), vol. 21(2), pages 152-174.
    3. à kos Péter & Erzsébet Németh & Bálint Tamás Vargha, 2020. "Sustainability of the Pension System, Risks and Opportunities," Public Finance Quarterly, State Audit Office of Hungary, vol. 65(6), pages 57-85.
    4. Prajapati Vishwajeet Singh & Priya Ashutosh & Pradhan Vikas, 2023. "The middle-income trap – a problem of definition and empirical research," Economic and Regional Studies / Studia Ekonomiczne i Regionalne, Sciendo, vol. 16(3), pages 459-472, September.

    More about this item

    Keywords

    economic structure; knowledge-based activities; innovation; productivity; competitiveness;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pfq:journl:v:64:y:2019:i:1:p:30-50. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Adam Hoffmann (email available below). General contact details of provider: https://edirc.repec.org/data/bkeeehu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.