Towards Sustainable Development: Revisiting the Middle-Income Trap Hypothesis for the Southern Common Market Countries

Veli Yilanci


Çanakkale Onsekiz Mart University, Faculty of Political Sciences, Çanakkale, Turkey (Turkey)
https://orcid.org/0000-0001-5738-690X

Uğur Ursavaş

ugur.ursavas@beun.edu.tr
Zonguldak Bülent Ecevit University, Faculty of Economics and Administrative Sciences, Zonguldak, Turkey (Turkey)
https://orcid.org/0000-0003-1918-1457

Tamer Güven


Utrecht University, Faculty of Humanities, Utrecht, Netherlands (Netherlands)
https://orcid.org/0000-0003-4329-0944

Abstract

One of the Sustainable Development Goals (SDGs) of the United Nations is to promote, sustained, inclusive, and sustainable economic growth. However, it is observed that many countries struggle to move up from the middle-income to high-income level, which refers to the middle-income trap (MIT). In this paper, we test the MIT hypothesis using a novel unit root test of Gómez-Zaldívar et al. (2013) across the Southern Common Market (MECOSUR) countries. To do so, we follow a different path from the existing literature and use a novel unit root testing strategy. We first test the significance of the trend term and then examine the unit root properties of the series by allowing multiple structural breaks according to the existence/non-existence of the trend term. Our results provide evidence of stationarity for Brazil, Colombia, Ecuador, and Peru, indicating that these four MERCOSUR countries are in MIT.


Keywords:

middle-income trap, sustainable development, MERCOSUR

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Published
2023-07-07

Cited by

Yilanci, V., Ursavaş, U. ., & Güven, T. (2023). Towards Sustainable Development: Revisiting the Middle-Income Trap Hypothesis for the Southern Common Market Countries. Problemy Ekorozwoju, 18(2), 111–120. https://doi.org/10.35784/preko.3949

Authors

Veli Yilanci 

Çanakkale Onsekiz Mart University, Faculty of Political Sciences, Çanakkale, Turkey Turkey
https://orcid.org/0000-0001-5738-690X

Authors

Uğur Ursavaş 
ugur.ursavas@beun.edu.tr
Zonguldak Bülent Ecevit University, Faculty of Economics and Administrative Sciences, Zonguldak, Turkey Turkey
https://orcid.org/0000-0003-1918-1457

Authors

Tamer Güven 

Utrecht University, Faculty of Humanities, Utrecht, Netherlands Netherlands
https://orcid.org/0000-0003-4329-0944

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