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ID: 121803

Austrian view on the middle income trap / Schneider, Henrique

Schneider, Henrique	Journal Article
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Publication

2013.

Summary/Abstract

This paper intends to give a nuanced interpretation 'the middle income trap' in the discussion on China's economic future. A developing nation gets 'trapped' when it reaches a relatively comfortable level of income but cannot take the step into the next level. In this paper, the usually made connection between income trap and the structure of economy is critically examined and the 'trap' is interpreted as a bearer of information in itself. According to the Austrian school of economics (Hayek), prices represent the sum of information that is available to the markets. Stagnating incomes will consequentially be read as information concerning the lack of growth of the productivity of the work force and the industry. The 'middle income trap' has to be addressed at microeconomic level, focusing on the increase of productivity. Usually, the trap cannot be addressed by government policies, but has to be solved by increased entrepreneurship.

Key Words

China ; Hayek ; Bohm - Bawerk ; Schumpeter ; Factor Productivity ; Middle Income Trap

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ID: 105867

Progressive taxation: applying hayek's constraint / Steele, G R

Steele, G R	Journal Article
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Publication

2011.

Summary/Abstract

That progressive taxation might offset a disproportionate burden of indirect taxes upon low income households sits at the heart of a suggestion from Friedrich Hayek. This concerns the manner in which a degree of progression might be accommodated and constrained to preclude arbitrary tax hikes upon minority income groups. While Hayek's proposal is permissive of socialist aims, it looks for efficiency in resource usage as reflected in the aspiration 'that each should feel that in the aggregate all the collective goods which are applied to him are worth at least as much as the contribution he is required to make'.

Key Words

Income Redistribution ; Hayek ; F. A. (1899-1992) ; Socialism Taxation ; F. A. (1899–1992) ; Iran - Democracy - 1941-1953

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