[21-10-2015] Growth slowdown and the Middle Income Trap in Asia

by Professor James Riedel

3:00 pm, Wednesday, 21-10-2015
Hall A.103, University of Economics Ho Chi Minh City
59C Nguyen Dinh Chieu, District 3

Tóm tắt chủ đề | Abstract

In Vietnam, one often confronts the view that comparative advantage leads to a dead end, where prosperity is limited to the level of productivity of unskilled labor in labor-intensive manufacturing (Vietnam Competitiveness Report 2010).

The World Bank (2010, p.7) takes the same view: “For decades, many economies in Asia, Latin America and the Middle East have been stuck in this middle income trap, where countries are struggling to remain competitive as high volume, low-cost producers in the face of rising wage costs, but are yet unable to move up the value chain and break into fast-growing markets for knowledge and innovation-based products and services”

More sophisticated versions of the same argument (Hausmann and Rodrik, 2003) appeal to market failures similar to those invoked to justify import-substitution industrialization in the 1960s, in particular learning and coordination externalities that inhibit spontaneous industrial development and movement up the ladder of comparative advantage.

All of these arguments lead to the same conclusion: without an activist industrial policy, progress into and beyond the middle-income range will be stymied—lower middle-income countries will be stuck at the bottom rungs of the ladder of comparative advantage.

Người trình bày | Presenter

James Riedel is William L. Clayton Professor of international economics at School of Advanced International Studies, Johns Hopkins University where he has worked for since 1976. His research interests include economic development, international finance, and international trade theory and policy. In addition, Professor James Riedel has been a consultant to a number of international development organization such as World Bank, Asian Development Bank, Inter-American Development Bank, and OECD. With successful achievements in academic research, Professor Riedel has also played an important role in advisory boards of academic journals, for instance Associate Editor of Journal of Asian Economics, a member of editorial boards of World Economy, and Asia Pacific Economic Literature. Professor James Riedel has published many studies on development economics, theory and policy of international economics on academic journal such as American Economic Review, Economic Record, Journal of Development Economics, Journal of Asian Economics, World Economy, Economic Journal, Journal of Development Studies, và Asia Pacific Economic Literature.