This paper provides a working definition of what the middle-income trap is. We start by defining four income groups of GDP per capita in 1990 PPP dollars: low-income below $2,000; lower-middle-income between $2,000 and $7,250; upper-middle-income between $7,250 and $11,750; and high-income above $11,750....

We forecast average annual GDP growth for 147 countries for 2010-30. We use a cross-country regression model where the long-run fundamentals are determined by countries’ accumulated capabilities and the capacity to undergo structural transformation.

We rank 5,107 products and 124 countries according to the Hidalgo and Hausmann (2009) measures of complexity. We find that: (1) the most complex products are in machinery, chemicals, and metals, while the least complex products are raw materials and commodities, wood, textiles, and agricultural...

The key factor underlying China’s fast development during the last 50 years is its ability to master and accumulate new and more complex capabilities, reflected in the increase in diversification and sophistication of its export basket. This accumulation was policy induced and not the result...

In this paper we look at the economic development of Sub-Saharan Africa (SSA) in the context of structural transformation. We use Hidalgo et al.'s (2007) concept of product space to show the evolution of the region's productive structure, and discuss the opportunities for growth and...

An extensive literature argues that India's manufacturing sector has underperformed, and that the country has failed to industrialize; in particular, it has failed to take advantage of its labor-abundant comparative advantage. India's manufacturing sector is smaller as a share of GDP than that of...

Becoming a rich country requires the ability to produce and export commodities that embody certain characteristics. We classify 779 exported commodities according to two dimensions: (1) sophistication (measured by the income content of the products exported); and (2) connectivity to other...

We develop an Index of Opportunities for 130 countries based on their capabilities to undergo structural transformation. The Index of Opportunities has four dimensions, all of them characteristic of a country’s export basket: (1) sophistication; (2) diversification; (3) standardness; and (4)...