The “middle-income trap” is the phenomenon of hitherto rapidly growing economies
stagnating at middle-income levels and failing to graduate into the ranks of high-income
countries. Most notably, several Latin American economies, at least until recently, would
seem to belong in this category, having failed to achieve high-income levels despite attaining
middle-income status several decades ago. By contrast, several East Asian economies have in
recent decades provided a template for “success:” continuing to grow rapidly after attaining
middle-income status, and thereby attaining per capita income levels comparable to advanced
countries.