In recent decades, several nations, including Brazil and South Africa, have become mired in the “middle-income trap”: Wages rise, but their economies consequently stagnate because they can no longer compete with low-cost producers. Economist and Nobel laureate Edmund S. Phelps discusses how China can evade a similar fate in an academic text that assumes readers’ acquaintance with classical economic theory. getAbstract nevertheless recommends it to those who wonder how China’s economy will develop in the years to come.
In this summary, you will learn
- Why China trails the West in labor productivity,
- How it can make up the gap and
- Why “indigenous innovation” is China’s best way to break out of the “middle-income trap.”
About the Author
Edmund S. Phelps, a 2006 Nobel laureate in economics, is director of the Center on Capitalism and Society at Columbia University and dean of the New Huadu Business School.