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A temporary loss of pace or the "middle income trap" - a commentary on the tasks for Hungary's economic development

Bod, Péter Ákos (2015) A temporary loss of pace or the "middle income trap" - a commentary on the tasks for Hungary's economic development. Economy and Finance, 2 (1). pp. 2-17.

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Abstract

The latest Hungarian economic growth data, though favourable, do not let us forget that in the longer term growth is weak compared to the preceding period – as well as to the performance of the East-Central European region, which is more dynamic than the European average. In order to make sense of the past decade’s relative loss of pace and lay the foundations for future development policy, it is worth placing Hungary’s case in the context of the slowing tempo typical of middle-income countries. The economic development policies currently pursued by the government are aimed at increasing output in the processing industry, and by extension exports, while relevant international experience advises that it is the higher value-added activities of the global value chain, particularly business services, which should be developed further. In this way real wages and income levels could be increased, and the economy would be less exposed to the fluctuations of international cycles.

Item Type:Article
Uncontrolled Keywords:economic growth, convergence, industrial policy, middle income trap, productivity, value chain
JEL classification:E60 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
F43 - Economic Growth of Open Economies
L50 - Regulation and Industrial Policy: General
Subjects:Economic development
Economic policy
ID Code:2067
Deposited By: Ádám Hoffmann
Deposited On:23 Sep 2015 10:47
Last Modified:24 Sep 2015 08:56

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