Frederic Neumann: It's time to talk about the high income trap

The middle income trap is a disease that has afflicted a number of developing economies over the years. After breakneck economic expansion, growth suddenly begins to stagnate when per capita income reaches a level the World Bank defines as middle income -- on average $6,900. As old economic drivers, like the development of light manufacturing or commodity exports, become exhausted, they need to be replaced by new ones. Policy paralysis, however, often prevents the adjustments needed to propel the economy to the next level.