State Capacity, Economic Complexity and the Middle Income Trap

• In Event: Trade, FDI and Economic Growth

Brief Overview

The Middle Income Trap results from a "sparse product space" that does not provide pathways for economic expansion. We find that the level of state capacity during early stages of development is key to reducing sparseness of the product space.

Authors

• Jonathan Hanson, University of Michigan-Ann Arbor

• Agustin Goenaga, Lund University