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A middle income trap in a small open economy: Modeling the Argentinean case

 

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Acceso restringido A middle income trap in a small open economy: Modeling the Argentinean case
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Author: Dabús, Carlos
Tohmé, Fernando
Caraballo, M. Ángeles
Department: Universidad de Sevilla. Departamento de Economía e Historia Económica
Date: 2016
Published in: Economic Modelling, 53, 436-444.
Document type: Article
Abstract: This paper presents a model of the conditions that may lead a small open economy towards a middle income trap. This situation has shown to be pervasive in Latin America. As Argentina is a salient instance of this phenomenon, we develop a stylized model of its economy at the first decades of the XXth century. It consists of a general equilibrium model of an open emerging economy, which is a price-taking primary goods exporter. A growth process is triggered by an increase of commodity prices, due to an upward jump of the world demand of these goods. The economy goes through several phases of growth, starting from a subsistence stage. Once decreasing returns set in, the economy reaches a steady state. Only a sustained high demand of its export products allows the economy to thrive. Otherwise, the economy gets entrapped in a middle income level
Cite: Dabús, C., Tohmé, F. y Caraballo, M.Á. (2016). A middle income trap in a small open economy: Modeling the Argentinean case. Economic Modelling, 53, 436-444.
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Format: PDF

URI: https://hdl.handle.net/11441/70249

DOI: 10.1016/j.econmod.2015.10.042

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