New Delhi: The Indian economy can escape the 'middle-income trap' with substantial investments in education, healthcare, and infrastructure, French economist and inequality specialist Thomas Piketty said on Tuesday, stressing that involvement in global coalitions is essential to driving inclusive and sustainable growth.
The middle-income trap is an economic situation when a country can no longer compete internationally in labour-intensive goods because wages are relatively too high, and also cannot compete in higher value-added activities because productivity is relatively too low. The result is slow growth, stagnant or falling wages, and a growing informal economy.
