Reflections on Catch-up : The Spread of Catch-up and the Middle-Income Trap

Abstract

If the twentieth century was the American century, then the twentyfirst century is for emerging market economies. The twentieth century began with the forge-ahead of the United States. According to Maddison (1991), the income gap between the US and other advanced countries continued to widen, with the average income of the latter reduced from approximately 60% to 50% of that of the former during the first half of the twentieth century. During the second half of the twentieth century, certain countries, including Western European countries, Japan, and the East Asian tigers successfully advanced. However, the catch-up remained a local phenomenon rather than a global one, applicable only to a small number of countries. The overall income gap between advanced countries and emerging market economies remained the same, and the US maintained its economic hegemony during the period (World Bank 2003; Shin 1996).