Baltic States: in the Middle Income Trap

Abstract

The results of economic transformations in the Baltic States from 1991 to 2018 are evaluated. Changes in indicators of growth of welfare, human and productive capital are tracked. There was a slowdown in the convergence of welfare levels due to the unfavorable conditions of foreign markets and the lack of advanced development factors. Despite relatively rapid economic growth, there remains a significant gap between the Baltic States from the European countries with high levels of income. The chronic problem of population flight, unstable inflows of investment, and instability in foreign trade prevent countries from escaping the middle-income trap. The study is based on the World Bank statistics.

Keywords

• middle income trap
• innovative growth
• baltic states
• eu
• convergence.