Income traps for different income groups: An empirical investigation

This study investigates the existence of income traps for 42 countries with different income levels. These income traps were investigated by employing the Augmented Dickey-Fuller, Zivot-Andrews with one break, and Lee-Strazicich with two breaks test procedures for the 1987-2019 period. The empirical...

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Bibliographic Details
Published in:Efil Journal 2022, Vol.5 (19), p.30-51
Main Authors: Akkay,Reşat Can, Altaylıgil,Yasin Barış
Format: Article
Language:English
Subjects:
İktisat & İşletme & Finans
Online Access:Get full text
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Summary:This study investigates the existence of income traps for 42 countries with different income levels. These income traps were investigated by employing the Augmented Dickey-Fuller, Zivot-Andrews with one break, and Lee-Strazicich with two breaks test procedures for the 1987-2019 period. The empirical findings reveal the existence of income traps at lower- middle, upper-middle, and lower-high-income levels. The study points out the possibility of a new income trap for countries that have just passed the income threshold that separates upper-middle and high-income countries.
ISSN:2619-9580