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Poverty, emergence, boom and affluence: a new classification of economies

  • Donatella SacconeEmail author
  • Mario Deaglio
Original Paper

Abstract

The paper offers a new country classification system defined in relative terms and jointly based on the level and the medium–long term rate of growth of per capita income. The classification system identifies four categories of economies: poor (low income–low growth), emerging (low income–high growth), booming (high income–high growth) and affluent (high income–low growth). After classifying 122 countries in periods 1985–1999 and 2000–2014, the paper focuses on the comparison of poor and emerging economies and, in parallel, of emerging and high-income economies, and characterizes their transitions across categories. In line with the empirical literature on economic growth, the results of multinomial logit analysis suggest that higher growth rates of export and investment are the main factors distinguishing emerging from poor economies. Further, a better institutional setting, measured by various dimensions of economic freedom, plays an important role in driving the transition of low income countries from low to high growth. Moreover, along with a better technological advancement, it also represents the crucial attribute differentiating high-income from emerging economies.

Keywords

Country classification systems Per capita income Economic growth Emerging economies Comparative economics 

JEL Classification

O10 O11 O20 O47 

Notes

Acknowledgements

We thank the members of the Turin Centre on Emerging Economies (OEET) and, in particular, Professor Vittorio Valli for their stimulating discussions and suggestions.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.University of Gastronomic Sciences and Turin Centre on Emerging Economies-Collegio Carlo Alberto (OEET)TurinItaly
  2. 2.University of Turin and Turin Centre on Emerging Economies-Collegio Carlo Alberto (OEET)TurinItaly

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