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.trZonguldak 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, MERCOSURReferences
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Authors
Veli YilanciÇanakkale Onsekiz Mart University, Faculty of Political Sciences, Çanakkale, Turkey Turkey
https://orcid.org/0000-0001-5738-690X
Authors
Uğur Ursavaşugur.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 GüvenUtrecht University, Faculty of Humanities, Utrecht, Netherlands Netherlands
https://orcid.org/0000-0003-4329-0944
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