Towards Sustainable Development: Revisiting the Middle-Income Trap Hypothesis for the Southern Common Market Countries

Yılancı V., Ursavaş U., Güven T.

PROBLEMY EKOROZWOJU, cilt.18, sa.2, ss.111-120, 2023 (SSCI)

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 18 Sayı: 2
  • Basım Tarihi: 2023
  • Dergi Adı: PROBLEMY EKOROZWOJU
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus, Academic Search Premier
  • Sayfa Sayıları: ss.111-120
  • Çanakkale Onsekiz Mart Üniversitesi Adresli: Evet

Özet

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 (MERCOSUR) 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.