Income Traps for Different Income Groups: An Empirical Investigation
Efil Journal of Economic Research, vol.5, no.3, pp.30-51, 2022 (Peer-Reviewed Journal)
- Publication Type: Article / Article
- Volume: 5 Issue: 3
- Publication Date: 2022
- Journal Name: Efil Journal of Economic Research
- Journal Indexes: EBSCO Education Source, EBSCO Legal Collection
- Page Numbers: pp.30-51
- Istanbul University Affiliated: Yes
Abstract
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.