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Frontiers of Economics in China

ISSN 1673-3444

ISSN 1673-3568(Online)

CN 11-5744/F

Postal Subscription Code 80-978

Front. Econ. China    2014, Vol. 9 Issue (3) : 398-437    https://doi.org/10.3868/s060-003-014-0020-4
research-article |
Will Inequality Lead China to the Middle Income Trap?
Nazrul Islam()
Department of Economic and Social Affairs, United Nations; International Center for the Study of East Asian Development (ICSEAD), Kitakyushu, Japan
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Abstract

China has departed from the East Asian development model by letting inequality rise to a high level, which is now contributing to China’s current problems of macroeconomic imbalance, declining efficiency of capital, and rising social tensions. If inequality persists, China may get caught in the “inequality-trap,” which may then lead to the middle income trap (MIT). Fortunately, China still has the levers to pull to reduce inequality and avoid the MIT. Measures along both the “wage route” and the “redistributive route” can be adopted for this purpose. In addition, China may pursue the “cooperative route” to more equitable distribution.

Keywords China      middle income trap      inequality trap      inequality      redistribution      cooperatives     
Issue Date: 23 September 2014
 Cite this article:   
Nazrul Islam. Will Inequality Lead China to the Middle Income Trap?[J]. Front. Econ. China, 2014, 9(3): 398-437.
 URL:  
http://academic.hep.com.cn/fec/EN/10.3868/s060-003-014-0020-4
http://academic.hep.com.cn/fec/EN/Y2014/V9/I3/398
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